Japanese government allocates $21bn to clean hydrogen subsidies
The money will be spent over a 15-year period under the previously announced CfD-style scheme
The Japanese government has announced plans to spend ¥3trn ($20.86bn) on subsidies for delivered clean hydrogen (and its derivatives) over a 15-year period.
Stay ahead on hydrogen with our free newsletter
This allows producers to sell clean hydrogen at the same price as fossil alternatives, regardless of market fluctuations, increasing the likelihood that offtakers will commit to buying volumes and thereby providing financial certainty for investors.
The reference price would be based on the highest of three options: the price of raw materials and fuels that will be displaced by low-carbon hydrogen arriving in Japan (ie, liquefied natural gas or coal), this price plus a measure of “environmental value”, or the actual sales price of grey hydrogen or its derivatives in existing markets.
As these reference prices rise with the introduction of carbon pricing and other regulatory measures, the amount of subsidy paid out would slowly decrease.
The decisions were made at the ruling Liberal Democratic Party’s GX executive committee meeting on Friday, which was chaired by Prime Minister Fumio Kishida.
(Copyright)