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Key Highlights

• Hydrogen is expected to see a global increase in demand as an essential energy source for decarbonization. However, the market is still in its infancy, with Japan expected to establish a presence by leveraging its technological capabilities. In a report published in 2023* we conducted a forecast of Japan's hydrogen supply and demand together with a cost analysis. The document we have released this time, which can be viewed as a follow-on report, considers the process for implementing hydrogen use in society based on the supply and demand forecasts of major countries and industries. It sets out the fields where Japan has a technological advantage, analyzes what business opportunities exist for the country, and examines the measures needed to capture these opportunities.
• In this document, we focus on power generation, automobiles, SAF (Sustainable Aviation Fuel), steel, and shipping as key industries that will generate new demand for hydrogen. This demand, taking account of new demand in major countries and industries in addition to existing demand, is expected to be 111-118 million tons/year by 2030 and 301-430 million tons/year by 2050. The process of implementing hydrogen use is predicted to vary by region.
• Global clean hydrogen projects announced to date make for a total production capacity of about 80 million tons/year by 2030 and 90 million tons/year by 2050. Matching the capacity of supply in 2030 will require utilization of clean hydrogen not only in the areas of new demand but also those of existing demand.
• Japan possesses numerous technological advantages across the entire hydrogen supply chain, from the upstream to the downstream stages. To succeed in both technology and business areas, it is hoped that the country will adapt to the characteristics of each region when promoting the implementation of hydrogen use in society, and disseminate the technologies it excels in. From the perspective of industry promotion, it is important for Japanese companies to expand their hydrogen handling volume and strengthen their influence in the global market. However, challenges exist for commercializing hydrogen-related technologies and expanding hydrogen handling volume. To overcome these challenges, business segmentation and the creation of hydrogen business portfolio players may be necessary.
• Additionally, to increase Japan’s influence as a source of hydrogen demand, a domestic market must be created at an early stage. This step requires measures such as accelerating supply chain construction through land acquisition by the government, supporting second-mover and later businesses, and refining services to improve the convenience of hydrogen utilization by businesses. It is also necessary to maximize domestic hydrogen production as a means of ensuring energy security.
• By having the government and related businesses work together to capture global hydrogen demand and promote hydrogen-related technologies, Japan can capture business opportunities in the hydrogen area.

 

Note:

For details, please refer to the Mizuho Bank report "How Japan Can Win the Global Competition for Hydrogen: Mizuho's vision for a hydrogen supply and demand structure" in the "Mizuho Industry Focus Vol. 237" (February 14, 2023).