Japan’s Hydrogen Society Promotion Act

Setting up a framework for awarding GX subsidies

Two new Bills make up a “hydrogen promotion” package that has now been submitted to the Japanese parliament. Via its GX bonds scheme (a contracts-for-difference program unveiled last year) the government will award subsidies for domestically and foreign-produced hydrogen and derivatives, with the first recipients to be announced at the end of this year.

The first piece of legislation, the “Hydrogen Society Promotion Bill”, sets up a framework for assessing applicants and awarding subsidies. Successful plans will demonstrate that the produced hydrogen meets certification thresholds, include a signed commitment between suppliers and end-users in Japan, and also detail any extra capital expenditure needed (such as infrastructure). METI will provide support in the form of expedited permitting (the Bill mentions Japan’s High Pressure Gas Safety Act, Port Act and road occupancy laws).

Establishing a domestic CCS industry

In addition, this package includes the “CCS Business Bill”, which aims to create a “business environment” for CCS hydrogen projects to begin operating in Japan by 2030. METI will take responsibility for a permitting and designation system. In the case of subsea storage, operators will be required to continuously monitor the storage reservoir for CO₂ leakage, and appropriate project resources “must be set aside” for this (this requirement continues after CO₂ injection has ceased). Management of storage reservoirs will initially be under the oversight of METI, but transferred to JOGMEC when “stable” storage is achieved. CCS project operators will be subject to no-fault liability.

The Bills are expected to pass the Japanese parliament by mid-year.