Japan's Hydrogen Society Promotion Act: Boosting Low-Carbon Hydrogen Adoption
Key Ideas
- The Hydrogen Society Promotion Act in Japan aims to promote the use of low-carbon hydrogen and its derivatives through financial support schemes like the CfD Scheme and Hub Support Scheme.
- Businesses seeking subsidies must apply to METI for approval of their plans and then to JOGMEC for the subsidies under the Act.
- The Act also offers special regulatory arrangements to approved applicants, supporting the development of infrastructure for hydrogen use.
- The enforcement of this Act is a significant step towards Japan's carbon neutrality goals and is expected to impact domestic and international market players positively.
Japan's Hydrogen Society Promotion Act, effective as of October 23, 2024, is the country's first law regulating businesses related to hydrogen. The Act's main goal is to expand the use of low-carbon hydrogen and its derivative products. Two key financial support schemes under the Act are the Support Focusing on the Price Gap (CfD Scheme) and Support for the Development of Hubs (Hub Support Scheme). The CfD Scheme provides subsidies to suppliers of low-carbon hydrogen to bridge the price gap between production costs and conventional fuels. To apply for these subsidies, businesses must first get approval from METI and then apply to JOGMEC. The Hub Support Scheme offers subsidies for developing transport and storage facilities for low-carbon hydrogen. Additionally, approved businesses receive special regulatory benefits related to safety and approvals. METI has already released forms for business plan approval, which must be submitted electronically through the government's portal. The Act marks a crucial step towards Japan's carbon neutrality targets, providing stability and predictability for hydrogen development. The Act's impact is expected to reach both domestic and international market players and investors positively.