Japan to allocate clean hydrogen subsidies from $20bn pot to producers by the end of 2024: report
Bill enabling Contracts for Difference-style subsidy programme will be submitted by mid-June
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A bill outlining the regulatory framework enabling the subsidy regime is due to be tabled during the current session of Japan’s Parliament, which began on Friday and will continue until 23 June.
Once the bill becomes law, the government plans to solicit business plans from potential subsidy recipients, before allocating resources by the end of the year.
Japan’s CfD-style programme envisages producers and importers of clean hydrogen and its derivatives receiving a top-up payment above a set reference price — and paying the government the difference if production and transportation costs end up lower than the reference price.
This, in turn, gives investors the financial certainty they need to bring the projects to fruition.
However, the Japanese government has given no indication as to whether the decision on fixed premiums will be made via an auction process or whether the government plans to allocate funding on the basis of business plans alone.