18 Apr 2022

Japan’s ‘Hydrogen Economy’ Runs the Risk of Being Powered by Coal

18 Apr 2022  by   
The government-led drive to boost hydrogen energy and lower emissions may end up giving coal-fired power plants a new lease on life

Fossil fuels account for more than 80% of Japan’s existing energy supply, of which 32% comes from coal-fired power plants. | KYODO

It’s no secret that Japan is betting on hydrogen as a clean and green energy source.

Japan was the first country in the world to launch a national hydrogen strategy, with then-Prime Minister Shinzo Abe unveiling the policy in 2017.

Since then, more than 30 countries and regions — including South Korea, Australia, the United Kingdom and the European Union — have followed suit, demonstrating an acceleration of government interest in the role of hydrogen as part of a nation’s long-term energy goals.

“Hydrogen is key for sustainable development,” says Eiji Ohira, director general of the fuel cell and hydrogen technology office at the New Energy and Industrial Technology Development Organization (NEDO). “It can be produced from a variety of sources, does not emit greenhouse gasses when used and can help to power various different sectors.”

Japan ultimately aims to become the world’s first “hydrogen economy,” with the chemical element increasingly portrayed as a vital cog in the country’s efforts to reach its long-term goal of zero carbon emissions by 2050.

But that target remains a long way off. Fossil fuels account for more than 80% of Japan’s existing energy supply, of which 32% comes from coal power plants. This places Japan as the sixth largest consumer of coal in the world, an energy source that alone produces one-fifth of global greenhouse gas emissions each year.

Furthermore, the Japanese government’s target to reduce the share of coal to 19% of the nation’s energy mix by 2030 is widely considered insufficient to meet its decarbonization targets and, ultimately, the Paris Agreement goal of limiting global warming to below 2 degrees Celsius.

“Coal is still the largest source of Japan’s CO2 emissions,” says Evan Gach, program coordinator at Kiko Network, a nonprofit environmental organization working to prevent global warming. “Most people see coal as a thing of the past and are surprised to know that, not only is it still being used, but that there are plans to begin operating new coal-fired power units across the country.”

Japan is the sixth largest consumer of coal in the world. | BLOOMBERG

‘Clean coal’ debate

Critics of the government’s energy policy have questioned the competing nature of Japan’s domestic climate commitments with its investment in new coal-fired power plants at home and abroad.

Energy officials typically point to recent technological advances that allow coal to be used to make hydrogen while capturing and storing the harmful emissions generated in the process, as well as the potential to use hydrogen or ammonia in power plants that can burn different types of fuel at the same time.

But Yasuko Suzuki, program coordinator at Kiko Network, says that such arguments don’t paint the full picture of what’s happening here.

“A lot of government subsidies are being funneled in the direction of ‘clean coal,’ including financial support for the production of hydrogen and the development of related equipment,” Suzuki says. “However, fossil fuels will continue to be burned even if new technology is being used in the process and carbon will continue to be released into the air. There is no such thing as clean coal.”

Climate campaigners argue that Japan’s hydrogen economy must move away from being dependent on fossil fuels or else it will end up giving coal a new lease on life.

The Matsushima Thermal Power Plant in the city of Saikai, Nagasaki Prefecture, is a case in point. Built more than 40 years ago, it is one of the oldest coal-fired power plants in the country. It was slated for mothballing by 2030, although official dates have never been announced.

However, the operator of the facility has rolled out plans to retrofit the plant so that it can run on a mixture of coal and hydrogen until the technology to burn carbon-free hydrogen is implemented.

“Retrofitting the oldest plants in Japan will simply extend the life of coal plants without meaningfully lowering emissions,” Gach says. “By doing so, Japan’s hydrogen strategy is essentially just keeping coal power alive and, if pursued at the cost of shifting to renewable energy, Japan will be locked into the long-term use of fossil fuels and CO2 emissions.”

The Fukushima Hydrogen Energy Research Field in Namie town, Fukushima. | COURTESY OF NEDO

Yuko Nishida, senior manager at the Renewable Energy Institute, an independent think tank that has been working to promote climate neutrality and renewable energy in Japan, claims the current focus on hydrogen is a serious issue.

Although Nishida sees benefits in using hydrogen in limited roles in specific sectors, she says that an overreliance on the element — whose energy efficiency is low and costs are high — amounts to betting on a losing horse, particularly if the production, transportation and storage of hydrogen are factored in.

“Hydrogen will play an important part in our energy mix in the future, but only if we have a proper plan for where it comes from and how we utilize it,” Nishida says. “We must differentiate between different types of hydrogen.”

The hydrogen palette

Hydrogen is the most abundant element in the universe. On Earth, it is found in water, plants, animals and even humans. In order to be used as a fuel, however, it needs to be separated from other molecules — a process that requires energy.

This means that, although hydrogen emits no harmful gasses when burned, its environmental credentials also depend on the method used to produce it in the first place.

Currently, global hydrogen production relies almost entirely on natural gas or coal, generating more carbon dioxide emissions than the whole of the United Kingdom and France combined. This type of hydrogen is commonly called gray hydrogen.

In contrast, hydrogen obtained from water using renewable energy is called green hydrogen, which currently makes up less than 0.1% of global hydrogen production due to the high cost of renewable energy and electrolysis technology — the process of splitting water into hydrogen and oxygen — which is still in the early stages of development.

To overcome problems plaguing both gray and green hydrogen — the former’s emissions and the latter’s comparatively high costs — Japan’s hydrogen strategy focuses on blue hydrogen, which is produced using fossil fuels but relies on experimental technologies to capture and store the carbon emissions that are generated during production.

Blue hydrogen is considered particularly attractive because it enables energy companies to continue to use cheap fossil fuels and existing coal-fired power plants that would otherwise face closure as part of efforts to lower emissions.

Protesters oppose the construction of new coal units at Yokosuka Power Plant in March. | COURTESY OF JAPAN BEYOND COAL

Business as usual

“The government is just far too optimistic about technologies that capture and store carbon emissions,” says Toshikazu Ishihara, senior researcher at the Renewable Energy Institute. “Not only are these technologies largely unproven but, particularly in Japan, we simply don’t have enough suitable places to store the large amounts of carbon that would need to be captured.”

Carbon capture and storage works by trapping the carbon emissions generated during the burning of fossil fuels and storing them in a safe place where they will not leak back into the atmosphere. The emissions are usually kept deep underground in geological formations such as old gas or oil reserves.

However, Japan has very few practical locations for this kind of storage and any areas that could potentially be used are either situated far from industrial centers — making transportation expensive and inefficient — or at risk due to the country’s high exposure to seismic activity, which could potentially lead to stored carbon leaking back into the atmosphere.

“Blue hydrogen with carbon capture and storage is not sustainable. It simply sweeps the problem under the carpet, leaving it for the next generations to deal with,” Nishida says. “In Japan — where we don’t have suitable locations to store large amounts of CO2 — the current focus on blue hydrogen is more about business continuity and keeping the existing energy system in place than carbon neutrality.”

A large part of Japan’s hydrogen strategy currently revolves around developing a hydrogen supply chain — working on projects in countries that are resource-rich and have more suitable locations for hydrogen generation — and then importing hydrogen to be used as a fuel.

“Japan wants to pioneer this technological push,” Nishida says. “China won the race to develop solar technology and electrolyzers for green hydrogen, so the Japanese government is now looking at new hydrogen technologies as the next big opportunity.”

However, recent projects to implement carbon capture and storage have so far failed to deliver on their promises, with low rates of carbon capture and high operating costs.

In one such endeavor involving Kawasaki Heavy Industries Ltd., Iwatani Corp. and Australian company AGL Energy Ltd., blue hydrogen is produced from coal in the state of Victoria before being liquified and transported to Japan. However, harmful gasses generated in the production process are released into the atmosphere, and future carbon capture strategies remain vague and unproven.

Coal is estimated to produce one-fifth of global greenhouse gas emissions each year. | BLOOMBERG

What’s more, experts argue that Japan’s focus on blue hydrogen runs the risk of leaving the country reliant on fuel imports from abroad, exacerbating underlying energy security issues — a topic that is more relevant than ever in the wake of Russia’s invasion of Ukraine and the ramifications this has had on energy security in Europe and beyond.

“Historically, Japan has been highly dependent on fossil fuel imports,” Nishida says. “This is a security issue for the country and plans to import hydrogen will only continue this trend.”

Yet problems related to energy security are not specifically tied to blue hydrogen.

“Whether it is blue or green hydrogen, Japan will likely continue to depend on foreign energy imports,” says Jane Nakano, a senior fellow at the Center for Strategic and International Studies who recently published a paper on Japan’s industrial hydrogen strategy. “At the current price levels, hydrogen use does not present an economic advantage over other forms of energy in Japan.”

Nishida believes the country could benefit from greater investment in renewables across the board.

“What Japan really needs is to prioritize developing renewables, and green hydrogen can be a part of that process,” Nishida says.

The green movement

In the town of Namie, Fukushima Prefecture, NEDO is working to develop power-to-gas technology at the Fukushima Hydrogen Energy Research Field in an effort to improve electrolysis technology and find ways of establishing low-cost, clean hydrogen production.

The facility is home to the largest hydrogen production unit in the world, providing valuable insight on the future role of green hydrogen.

“Hydrogen is extremely valuable in terms of energy storage because it stores electricity in the same way that a battery does,” Ohira says. “This is particularly important in the context of increasing renewables because it can help reduce imbalances between supply and demand that naturally occur with wind and solar.”

Furthermore, hydrogen could become extremely useful in a complex energy system that makes space for localized energy production.

“Imagine a hydrogen refueling station that produces its own hydrogen onsite using small-scale electrolysis with local renewable energy,” Ohira says. “This would eliminate the costs of transporting fuel to places that are far from large production sites.”

Imported coal is stockpiled after being offloaded at a port in the city of Iwaki, Fukushima Prefecture. | BLOOMBERG

However, green hydrogen currently suffers from the same issues plaguing renewable energy in Japan: high costs and insufficient supply.

“The main barrier to green hydrogen is the price of electricity, especially in terms of renewable electricity,” says Ohira, who adds that water electrolysis technology is still in its infancy and that there is a need to improve efficiency and durability in order to reduce costs further.

This has led some to argue that Japan should use blue hydrogen as a stepping stone to achieve longer term plans to scale up hydrogen production.

“If we produce hydrogen with fossil fuels, then we can achieve economies of scale and lower production costs,” says Ohira, who believes that Japan’s future energy system will require a mixture of energy sources, including both blue and green hydrogen. “With green hydrogen, this is a lot more challenging. We can expand production but the cost of water electrolysis units is essentially linear due to the nature of the system.”

However, not everyone agrees with this strategy.

“It is paramount that hydrogen is produced in an environmentally sustainable and climate benign manner to maximize emissions reduction benefits across a wide range of sectors,” Nakano says.

Furthermore, Nishida says that it’s important to act in ways that ensure that Japan’s long-term energy goals are achieved.

“Gray and blue hydrogen keep the fossil fuel generation system afloat and the technologies used do not relate to green hydrogen production,” Nishida says. “We cannot afford to waste time. The real priority should be to invest in renewables and, once these are developed, then we can talk about scaling up hydrogen.”


More News