Japan passes act promising 15-year low-carbon hydrogen subsidy

Source: Charlie Currie | · H2VIEW · | May 17, 2024

Japan has today (May 17) passed the Hydrogen Society Promotion Act that will provide a 15-year subsidy for Japanese-produced and imported low-carbon hydrogen.

Passed through Japan’s House of Councillors with no definition of the subsidy prices, it appears importers will be able to stack the subsidy with those of the country where the hydrogen is produced.

It comes as the nation looks to boost its hydrogen supply to around 12 million tonnes in 2040, just days after Australia, a potential key hydrogen exporter, unveiled a $4.4bn package for an AUD $2/kg renewable hydrogen tax credit.

The act will also support the development of hydrogen infrastructure to support the decarbonisation of Japan’s economy. Carbon capture and storage (CCS) will also be supported by the new law.

Last December (2023), Japan’s Ministry of Economy, Trade and Industry (METI) set out plans to introduce the subsidy scheme to reduce the cost gap between low-carbon and fossil-based hydrogen.

According to the original plans, the government defined low-carbon hydrogen as having a carbon intensity of 3.4kg CO2/kg of hydrogen or lower.