On the Ground in Japan: FCV Uptake and Hydrogen Fueling Stations

Module four of the ten-module research and development agenda of Japan’s Cross-Ministerial Strategic Innovation Promotion Program — Energy Carriers is entitled “Basic Technology for Hydrogen Station Utilizing Ammonia.”  The rationale for including this technology is that “high purity H2 supply system with low cost hydrogen transportation is a key issue to spread fuel cell vehicles (FCVs).”

Click to enlarge. Module 4 of the SIP Energy Carriers R&D agenda. Excerpted from the SIP Energy Carriers brochure, April 2016.

A story published last week in the Tokyo Shimbun says that to date FCVs have not spread very far.  Among the identified constraints is the cost of hydrogen fueling stations (HFS).  The Tokyo Shimbun story states that “according to industry officials, each station that supplies hydrogen to fuel cell vehicles runs about ¥400 million ($3.6 million) in construction costs. In order to achieve profitability, about 1,000 fuel cell vehicles are required as customers per location.  Construction is not proceeding.”

So far, the players focused on FCVs do not seem to be looking to ammonia as an expedient that will help reduce the cost of HFS and thereby encourage their construction and the uptake of FCVs.  This appears to be a missed opportunity whose benefits may become too compelling to ignore.

The Tokyo Shimbun story contains recently released figures showing that a total of 1,370 Toyota Mirai and 110 Honda Clarity FCVs had been registered in Japan by the end of the 2016.  The Mirai was first offered commercially in 2014; the Clarity in 2016.  The central government is targeting 40,000 FCVs on Japan’s roads in 2020, 200,000 in 2025, and 800,000 in 2030.  To that end, the government has earmarked ¥45 billion ($405 million) for FCV-related subsidies through 2020.  The interim target for the number of HFS by 2020 is 160.  Assuming a 1:1 public-sector match of private-sector investment, roughly $150 million will be consumed in building the approximately 80 HFS needed to reach the target.  That will leave $255 million for FCV incentives or, at the current rate of $17,960 each, enough for 14,200 cars – far short of the 2020 target.

As described in a previous post (“On the Ground in Japan: LH2 and MCH Hydrogen Fueling Stations”), the SIP Energy Carriers program is focused on three different methods for managing hydrogen as a transportation fuel: liquefaction of pure hydrogen, chemical combination of hydrogen with toluene to produce methyl cyclohexane (MCH), and chemical combination with nitrogen to produce ammonia.  The liquefaction and MCH constituencies have each articulated an approach for addressing the HFS challenge.  JX Nippon Oil & Energy, a leader of the MCH thrust, is looking to streamline the HFS construction process.  A recent Bloomberg Markets story quoted Katsuyuki Sasaki, head of the hydrogen business promotion department at JX Nippon Oil & Energy as follows: “We are aware that we need to reduce costs in order not to rely on subsidies.  We are working on packaging and standardizing stations.”  Given JX’s stated interest in MCH, the envisioned “packaging and standardizing” will presumably involve MCH technology.  Since MCH is functionally indistinguishable from gasoline, it could be imagined that an MCH-based HFS could be closely modeled (or even adapted from) conventional petroleum fueling stations.

By contrast, Iwatani, a proponent of liquefaction technology, is looking to regulatory relief.  According to a recent Automotive News story, “Fueling stations such as Iwatani’s are hemmed in by what supporters say are outdated safety laws geared toward the industrial use of hydrogen at big refineries, where explosions are a concern. The rules require large setbacks from neighboring properties, which jack up the real estate costs for a filling station. Expensive safety walls are also required. Customers aren’t allowed to fill their own cars either.”

Iwatani is featured in another news item from last week.  This one is from Kankyo Online and announces the formation of an HFS consortium whose members include Toyota, the Japan Development Bank, and seven other companies in addition to Iwatani.  It intends to implement “new measures concerning maintenance and operation support for hydrogen stations, reduce deployment cost including regulatory review, and increase efficiency of operation.”

Module four of the SIP Energy Carriers program has borne fruit at Hiroshima and Gifu Universities.  Researchers at both institutions have developed technologies that can convert ammonia to hydrogen at the point of dispensing at levels of purity that meet international standards for FCVs.  Informal investigation outside of Japan has produced indications that the cost of an ammonia-based fueling station could be an order of magnitude less than that required for liquid hydrogen.  Norm Olson, President of the NH3 Fuel Association, has spoken in the past with U.S. companies such as Emerson Electric in St. Louis and Squibb Taylor in Dallas that supply equipment, including flow meters, valves, hoses, and fittings, for both propane and ammonia dispensing stations.  He said that the companies indicated that the cost of this equipment “is nearly the same for the two commodities.  This is because propane and ammonia tanks up to about 16,000 gallons are nearly identical in terms of pressure rating and materials of construction.”

According to a white paper published by the Energy Information Administration in the U.S., the cost of a medium-sized propane station that could dispense 1,800 gallons (6,800 liters) per day – excluding real estate – is in the range of $125,000-$140,000 (¥13.9 million – ¥15.5 million).

The Hiroshima University team that developed the ammonia cracking system is part of a research consortium whose members include Toyota, Showa Denko, and Taiyo Nippon Sanso.  Given that Toyota is a member of both the Hiroshima University consortium and the newly announced Iwatani-Japan Development Bank consortium, that company may be the conduit that brings the idea of ammonia as a hydrogen carrier into the HFS discussion.

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