On the Ground in Japan: Mid-Term Prospects for the Hydrogen Society

Recent “On the Ground in Japan” posts have considered the prospects for Japan’s “Hydrogen Society.”  Two weeks ago, a post entitled “FCV Uptake and Hydrogen Fueling Stations,” pointed to a lack of marketplace momentum for the products that are supposed to drive the hydrogen society forward in the near term.  The uptake of fuel-cell vehicles (FCVs) is off to a very slow start and the construction of hydrogen fueling stations is “not proceeding.”

The same day the post appeared, the Japanese market research firm Fuji Keizai announced the release of a report that projects robust growth for the country’s hydrogen economy.  In its coverage of the announcement, the on-line news service Smart Japan, stated that the market for selected hydrogen-related goods will start to hit its stride with the arrival of the Tokyo Olympics in 2020.  At that time, Fuji Keizai projects the market will have a value of approximately ¥70 billion ($640 million).  By 2030, the report says, the market will have a value of ¥590 billion ($5.4 billion). This is good (although not awe-inspiring) news for hydrogen proponents but its import for ammonia energy is unclear.

Click to enlarge. Fuji Keizai’s projection of the market for selected hydrogen-related goods.

Fuji Keizai generated its projections by surveying companies with a role in the domestic market for hydrogen energy and related equipment and infrastructure.  As summarized in a graph accompanying the report, the market has so far consisted almost entirely of hydrogen fueling station construction, and, consistent with the perspective of the Ammonia Energy post, has actually declined since the 2015 benchmark year.

However, the report shows the rekindling of growth in 2018 and 2019 with an increase in “other hydrogen uses” (presumably products such as residential fuel cells).  Consumption of hydrogen fuel becomes a meaningful factor for the first time in 2020, while investment in “other uses” continues to grow.  The positive trend in these areas accelerates throughout the decade.  In 2025, hydrogen transportation (presumably FCVs) becomes an important contributor.  By 2030, spending on “other uses” is the largest segment of the market.

The Fuji Keizai report paints a picture of an early-stage movement that is currently struggling to find its footing – but that is expected to gradually build momentum and become a legitimate economic sector over the next 10-15 years.  This should be encouraging to proponents of the “hydrogen society” in Japan and around the world.  At the same time, though, proponents of ammonia energy still have work to do to ensure that ammonia will have a seat at the table.

On June 5, Mayumi Matsumoto, an environmental energy science professor from Tokyo University who appears regularly in Japanese press and broadcast media, published an article entitled “Mayumi Matsumoto’s Environment / Energy Diary: Huge progress toward realizing hydrogen mass storage and transportation.”  The article was based on Matsumoto’s interview with officials from Chiyoda Corporation, the multinational chemical engineering firm that is arguably the leading proponent of the methyl cyclohexane (MCH) method of hydrogen transport.  In this method, hydrogen is chemically combined with toluene to make MCH, which can then be transported with existing distribution assets to its point of use and chemically uncombined from the toluene as pure hydrogen.  The toluene can be reused for this purpose multiple times.

Matsumoto structures her article with this framework: “There are four types of hydrogen storage / transportation methods that are practical or close to that: (1) pipeline, (2) compressed hydrogen, (3) liquefied hydrogen (4) OCH method.”  (“OCH” stands for organic chemical hydride.  MCH is the specific form of OCH that Chiyoda is developing.)  This creates a launching pad for the Chiyoda officials to explain why MCH is superior to Matsumoto’s other three options.  At no point in the interview do they acknowledge the “return trip” problem (i.e., the need to send the base toluene, presenting 94% of the weight of the MCH molecule, back to its point of origin).  And the option of storing and transporting hydrogen in the form of ammonia?  It goes unmentioned, as if there were no such thing.

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