Japanese-Norwegian partnership in developing a carbon neutral hydrogen value chain

Norway can provide clean hydrogen, from renewable energy or from natural gas with CCS, to the Japanese energy market in transition.
Japan and Norway are both globally prominent energy nations and are investing considerably in R&D as well as in commercialization of technology. While Norway is gifted with rich natural resources and is a net exporter of primary energy, Japan is a globally considerable importer of fossil fuels, increasingly after the 2011 Fukushima nuclear accident.

The complementarity is source of a productive partnership in promoting cost efficient, reliable, safe and scalable energy value chains. Japan has since the early 1980s invested in developing fuel cell technologies and is a driver for efficient components and systems. Norwegian R&D institutions and companies have worked closely with Japanese partners on hydrogen related technologies for some time already.

Increasing attention towards hydrogen
Hydrogen as an energy carrier is gaining increasing attention, not least in Japan, where it will make their total energy system more flexible and contribute to fulfil Japan’s commitment to reduce greenhouse gas emissions and, not least, create new business. Japan’s hydrogen strategy sets goals for implementation of an infrastructure where fuel cell vehicles, stationary fuel cells and larger scale power production will grow coordinated. A national effort is made to encourage the various commercial players through incentives to contribute to realizing such a market scale up.

What Japan is lacking most is the ability to bring carbon free hydrogen or hydrogen rich energy carriers to the market cost efficiently. Hydrogen produced from Norwegian renewable power through electrolysis or from natural gas with CCS is gaining attention in the Japanese market, and certainly as an alternative to brown coal-based hydrogen production with CCS in Australia, already under development. Norway’s potential to scale production makes us an attractive long-term partner. We possess both R&D and industrial capacities throughout the value chain.

The Japan-Norway dialogue
Establishing a large-scale partnership with Japan requires a long-term horizon. The Research Council of Norway and Innovation Norway, together with the Norwegian Embassy in Tokyo, have over time coordinated a Norwegian team approach to promote partnership with the major stakeholders driving the developments in Japan. Efforts have been made to connect to larger Japanese development programs, including both liquified hydrogen and ammonia as alternative energy carriers. Japan has recently established the “Green Ammonia Consortium”, consisting of more than 30 Japanese companies and research institutions. From April 1st 2019, the consortium will open up for membership invitations also to foreign partners.

In October 2018, Japan’s government invited the main international partners to the 1st Hydrogen Energy Ministerial Meeting in Tokyo. State Secretary Ingvil Smines Tybring-Gjedde from the Ministry of Petroleum and Energy represented Norway in the ministerial discussions and promoted Norway in bilateral meetings as a complementary partner to Japan, emphasizing our large energy resources and ambitions in developing “clean” energy value chains. The State Secretary was accompanied by Equinor and NEL, invited as keynote speakers in the industry sessions. The “Tokyo Statement” clearly emphasizes the need for international partnership in order to harmonize regulations, codes and standards. It also encourages collaboration in establishing global cost-efficient hydrogen value chains.

Team Norway in Tokyo will continue to increase the momentum for Japan-Norway partnership. In connection with the annual Fuel Cell EXPO in Tokyo we will be hosting another Japan-Norway hydrogen seminar at the Norwegian Embassy on February 26, 2019.

Japan’s energy market in transition – ready to scale?
Japan is struggling to define the golden path for its energy policies, balancing energy security, de-carbonization and economic effectiveness. With 9 power utilities traditionally protecting their regional monopolies, Japan is now, towards 2020, undergoing a longed-for comprehensive power market deregulation process, starting with the unbundling of the retail side.

Similarly, the gas distribution market is undergoing a deregulation process. These measures, implemented as a consequence of the Fukushima nuclear plant accident in 2011, will open up for new dynamics in the energy market, for more renewable power production, such as offshore wind. Equinor opened an office in Japan in September 2018, primarily to focus on offshore wind projects. Even though the Fukushima accident increased the general interest and awareness for the position of renewables, the market is still overshadowed and influenced by lack of political willingness to face the true cost of nuclear power. Costs of renewables and domestic infrastructure for hydrogen have shown a tremendous drop in global markets, while in Japan, holding stringent and unnecessary regulations, costs are still kept high.

Norway’s more than 30 years of experience from a deregulated power market, its potential as a large-scale producer of clean hydrogen and a wide range of technology and system promoters are attractive for the Japanese market. Opportunities for Norwegian companies are many, if the market hurdles and opportunities are properly understood. IN Tokyo has over time invested in positioning Norway in this market, undergoing a very important, but complex market transition.

For more information, please contact:
Hiroko Tominaga
Senior Market Adviser
Innovation Norway, Tokyo
T: +81 334409934

Svein Grandum
Special Adviser
Innovation Norway, Tokyo
T: +81 334409932
M: +81 8025693178

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