Govt eyes new legislation to promote wider use of hydrogen, ammonia fuels

Yomiuri Shimbun file photo
A hydrogen station in Amagasaki, Hyogo Prefecture

The government plans to establish new legislation to support industries involved in the production and supply of hydrogen and ammonia to help promote the wider use of these substances as next-generation fuels, according to sources.

The government aims to submit a bill to the Diet in the next fiscal year to encourage the creation of a system to produce and supply hydrogen and ammonia, demand for which is expected to grow amid the global trend toward decarbonization as neither emit carbon dioxide when burned.

Under the envisaged new legislation, the government will provide financial support to businesses involved in the production and supply of hydrogen or ammonia, as well as to promote the development of relevant infrastructure.

The law will include a regulation to exclude businesses that handle hydrogen or ammonia produced by environmentally hazardous methods from the scope of assistance eligibility.

According to government officials, the creation of a comprehensive legal system that integrates support and regulations for businesses in the field is unprecedented worldwide.

In December, the Economy, Trade and Industry Ministry compiled a policy proposal to establish a supply system by around 2030 to expand the use of hydrogen and ammonia. The main pillars of the policy are the introduction of a system under which the government will, in principle, subsidize the difference in price between the two substances and fossil fuels for 15 years, and the establishment over the next 10 years of about eight bases that will comprise storage tanks, pipelines and other infrastructure.

The government plans to decide on the future energy policy plan at a soon-to-be-held session of the GX Implementation Council, which is chaired by Prime Minister Fumio Kishida. More than ¥7 trillion is expected to be needed over the next 10 years from both the public and private sectors to build a hydrogen and ammonia supply network.

The government aims to use the new legal system as leverage to support the implementation of this policy.

The government also aims to encourage companies to invest in projects in the field in the hope of achieving its goal of net zero greenhouse gas emissions by 2050.