Countries across Asia plan cost-reduction strategies to advance hydrogen fuel use
As energy transition gains momentum in Asia, especially in the field of hydrogen, policy makers and industry professionals remained focused on finding low-cost production methods to reduce carbon footprints and create a transparent price discovery mechanism, leaders at the Singapore International Energy Week’s LNG and Hydrogen Gas Asia virtual conference said Oct. 28.
Countries across the Asia-Pacific, notably Australia and Japan, have set up projects and devised policies to include hydrogen as part of their energy mix with lower costs.
Australia has crafted a national strategy for hydrogen with the aim of becoming a major global player by 2030, a key element of which is to create clusters of large-scale demand and use hydrogen in transport, industry and gas distribution networks.
“The emerging hydrogen industry requires an economic license as the industry needs to scale up, a social license for trusted customer and community relationships, and a regulatory license to establish stable, meaningful and efficient regulatory settings,” Australian Hydrogen Council CEO Fiona Simon said.
Australia is aiming to become a top three global hydrogen exporter by 2030, with its low emissions technology statement including a target to produce hydrogen under A$2/kg ($1.43/mt).
Key characteristics of hydrogen include its ability to be stored for long periods, transported and exported over long distances without losing energy value, and its versatility in being convertible for different uses across energy, transport and industrial processes, Simon said.
COST REDUCTION POLICIES
In Japan, the cost of domestic renewable power generation remains high, and hydrogen imports have the potential to contribute a significant share of the country’s hydrogen supply.
With an expected hydrogen import volume of 300,000 mt/year by 2030, Japan has partnered in major projects on liquid hydrogen transport and carriers from Australia and Brunei, according to Kan Sichao, Senior Researcher at Japan’s Institute of Energy Economics.
“The key next step for Japan is to reduce the cost of carbon dioxide-free hydrogen supply. Japan needs to bring down the domestic renewable power generation cost as well as the shipping cost of hydrogen from other countries,” Kan said.
Japan’s Kawasaki in December 2019 launched the world’s first liquid hydrogen-carrying ship, and several other Japanese firm are also making sizable investments in the future hydrogen economy.
Japan’s hydrogen supply comes from carbon dioxide-free green and blue hydrogen, which can be either supplied from domestic renewable power or seaborne imports.
Some of the possible green hydrogen routes include Japan’s domestic renewable power, solar energy from Chile, hydropower from Canada and Russia, and photovoltaic solar or wind energy from Australia and the Middle East, Kan said.
Some of the possible blue hydrogen routes include coal and carbon capture and storage from Australia.
S&P Global Platts assessed the cost of producing hydrogen in Japan on Oct. 26, excluding capex, at Yen 143.29/kg ($1.37/kg) for SMR without CCS, Yen 252.84/kg ($2.42/kg) for alkaline electrolysis and Yen 283.36/kg ($2.72/kg) for PEM electrolysis.
Japan on Oct. 27 launched a fuel ammonia council to consider ways of developing its supply chain, as it sees ammonia as one of the fuels that could be burnt together with coal, with potential demand equivalent to the current global trade volume of 20 million mt/year, Platts reported earlier.
Saudi Arabia has shipped its maiden blue ammonia cargo to Japan to burn possibly together with coal and natural gas for zero-carbon power generation, paving the way for the further use of hydrogen in the energy system.
Ammonia produced from carbon dioxide-free hydrogen is also gaining momentum, in which gas is shipped to Japan for power generation, industry boilers and as fuel for ships.