Japanese oil & gas firms Eneos and Idemitsu Kosan have signed a memorandum of understanding with utility Hokkaido Electric Power Company (Hokuden) to develop a green hydrogen project with at least 100MW of electrolysis capacity within the country by 2030.

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This plant, capable of producing 10,000 tonnes of H2 a year, is the largest yet proposed to be built in Japan, which has predominantly focused its strategy towards imports of hydrogen produced in parts of the world with extremely cheap renewable electricity.

The trio plans to site the plant in the port city of Tomakomai, on Japan’s northernmost island, Hokkaido.

Hokkaido has extremely high offshore wind potential, with a third of Japan’s 45GW target by 2040 expected to be sited in this island. Japan’s largest offshore wind farm to start operations to date, a 112MW project, is located in the Hokkaido’s Ishikari Bay, with another 3.9GW across five zones confirmed.

However, Hokkaido currently only has 600MW of interconnection capacity to Japan’s main island of Honshu, restricting the amount of electricity that can be transmitted to more populated areas.

The three companies plan to transport hydrogen produced in Tomakomai via pipeline for use at Idemitsu Kosan’s refinery in the region, where it plans to produce the country’s first synthetic fuels, as well as to other local businesses.

Hokuden cites a survey performed by government research and development agency Nedo, which estimates 70,000 tonnes of H2 would be needed among businesses in Hokkaido to completely switch from fossil fuels to hydrogen in industrial processes, power generation, heat, and mobility.

Japanese business newspaper Nikkei reported in 2021 that the utility was developing a 550 tonnes-per-year green hydrogen plant, drawing on power from a 110MW offshore wind farm, to begin operations by March this year. However, no further updates on this project have been released by Hokuden.

Japan’s government targets 20 million tonnes of hydrogen supply by 2050, with plans to spend ¥3trn ($20bn) on subsidies to cover the cost difference between clean H2 and its fossil equivalents.

However, some renewable energy analysts have criticised the focus on importing hydrogen and ammonia, particularly for power generation, as expensive and inefficient for emissions reduction compared to building out domestic renewable energy capacity.