One solution is to import hydrogen from overseas, reducing reliance on fossil fuel imports. A recently signed agreement with Australia could see a supply of green hydrogen and ammonia − generated through electrolysis powered by renewables, and blue hydrogen, produced using fossil fuels and carbon capture and storage (CCS) − imported to meet Japan’s power needs.
“Wherever you find vast amounts of hydrocarbons and vast amounts of storage, you can build around that. And fortunately, Australia is extremely blessed with both,” says Mark McCallum, Chief Executive Officer at Low Emission Technology Australia.
Switching to hydrogen will require a whole new supply chain, with specially built vessels, new types of pipelines, and specialized hydrogen and ammonia production facilities. MHI has invested in the H2U Group in Australia, a leading developer of green hydrogen and green ammonia projects, which can be exported to Japan.
But as international interest in hydrogen grows, scaling up could bring costs down and create a thriving export market for countries like Australia, making investments in a hydrogen economy − for both exporters and importers − less of a risk.
“Customers want their net-zero emissions ambitions met. But not at any price. Hydrogen has to be affordable, reliable, and clean. So, these are the three criteria we need to look towards,” says McCallum.
As green hydrogen powered by renewables scales up, the cost should fall, much as solar and wind power costs plummeted in the past decade. But in the short term, blue hydrogen may prove more cost-effective and easier to scale up to meet demand from countries like Japan.
A thriving international market for trading hydrogen could help meet the net-zero plans announced by countries and regions around the world.