1『Summary of Activities for Hydrogen
Utilization in Chubu in 2030』

February 19th, 2021

Hydrogen Utilization Study Group in Chubu■ Eleven private companies which are promoting hydrogen utilization (listed below) haveestablished the Hydrogen Utilization Study Group in Chubu in March 2020 to expand
hydrogen demand and to build a supply chain for stable hydrogen utilization in the Chubu
region.
■ This Group takes its first effort in Japan to conduct cross-sectional studies in various
industries such as energy (oil, gas and electricity), petrochemicals, automobiles, steel
manufacturing and finance.
<Participating Companies＞ Alphabetically, ♦Secretariat companies
Air Liquide Japan G.K. /Chubu Electric Power Co., Inc. /ENEOS Holdings, Inc. /Idemitsu Kosan Co., Ltd /Iwatani Corporation / Mitsubishi Chemical Corporation/
Nippon Steel Corporation /Sumitomo Corporation♦/Sumitomo Mitsui Banking Corporation♦/
Toho Gas Co., Ltd. /Toyota Motor Corporation♦

Hydrogen Utilization Study Group in Chubu

【Summary】

2＜Background of Study＞
On December 26, 2017, Ministry of Economy, Trade and Industry (hereinafter “METI”) published theBasic Hydrogen Strategy which included the following targets.
▽Realization of low-cost hydrogen usage under the Basic Strategy in order to move towards ahydrogen-based society:■ As a basic approach, procurement of hydrogen at large scale, either by i) use of combinationof inexpensive, unused energy of overseas markets with CCS, or ii) use of inexpensive,
renewable energy to be used by electrolysis■ Realization of annual procurement of 300 Kt/y of hydrogen, by developing commercial-scale
supply chains by around 2030. Aim to realize hydrogen cost of 30 JPY/Nm3.
■ In the later phase, further endeavor to lower the hydrogen cost to 20 JPY/Nm3 to allowhydrogen to gain the same competitiveness as traditional energy sources after environmental
cost adjustments are incorporated.
<Study Results by the Hydrogen Utilization Study Group in Chubu >In response to the Basic Hydrogen Strategy, we, Hydrogen Utilization Study Group in Chubu haveconducted cross-sectionally studies focusing in areas of ① the potential demand of hydrogen in
Chubu, and ② conditions needed to realize a hydrogen supply chain that will realize construction ofimport terminal, which will supply hydrogen to end users in the Chubu region, assuming large-scalehydrogen import from overseas will be realized. This study is the first effort in Japan ahead of “GreenGrowth Strategy towards 2050 Carbon Neutrality” announced by METI in Dec 2020.
Results of the study are as following;①The potential demand of hydrogen in Chubu region in 2030 will reach 110,000 t/y(approx. one-third of national targets set by the Basic Hydrogen Strategy)
subject to hydrogen price being able to reach switchable costs in each sector,
which is expected to further improve with technological innovation after 2030.
In case of social implementation from 2025, there’s a possibility of hydrogen
demand emergence around 40,000 t/y.
②Nevertheless, in the case the hydrogen demand reaches 110,000 t/y level, even if thecost of hydrogen reaches 30 JPY/Nm3 as Japanese government’s target, it is predictedthat the total negative spread amount between hydrogen price and switchable costs willreach approx. 20 billion JPY annually, and initial CAPEX which will be needed
to realize receiving import hydrogen, transportation and facilities at the end-users’side to reach around 100 billion JPY.
Therefore, in order to realize the social implementation in Chubu, development of mid-long term policy
to compensate the high CAPEX/OPEX and commitment of offtake agreements by major end-users andrealization of a stable hydrogen supply are needed. At the same time, it is also essential to scale-up
each facilities from technological viewpoint, to review regulations related to hydrogen supply chain, andto propose necessary regulatory reviews.
While the “Green Growth Strategy towards 2050 Carbon Neutrality” announced by METI in
December 2020 had even ambitious targets than that of the Basic Hydrogen Strategy,
Hydrogen Utilization Study Group in Chubu would like to coordinate with the government
together with Japan Hydrogen Association and other consortiums in order to realize the largescale hydrogen utilization in Chubu, as a pioneering model in Japan. Moreover, based on theresults, we would like to conduct further study and to continue our activities in order torealize social implementation in 2025 and commercialization in 2030.

Hydrogen Utilization Study Group in Chubu

3

１. Overview of Study① Estimation of the potential demand of hydrogen in Chubu in 2025 (socialimplementation phase) and 2030 (commercialization phase), and examinationof the possibilities of realizing a hydrogen supply chain from import terminal to end
user points in Chubu region, under the assumption that large-scale hydrogen
import from overseas will be realized.
② Clarification of challenges needed to be solved including cost- related topics

Scope of activities
Large-scale hydrogen
import from overseas【Import】
ImportTerminal【Delivery】
Land transportation

CO2 free hydrogen

Stakeholders

Hydrogen Utilization Study Groupin Chubu

Source: Kawasaki Heavy Industries Ltd

National roadmap(2030)
300 Kt/y(1) 30 JPY/Nm3

Experts/players
in H2 field【End-users】

Government/Municipalities

Power/Gas
Petro-refining/chemical

Otherconsortiums

Steel Manufacturing

Factory
Port/Airport
Hydrogen Station(1) “Green Growth Strategy towards 2050 Carbon Neutrality” announced by METI in Dec 2020 sets the targetof clean hydrogen utilization of above 420 Kt/y after 2030.

Hydrogen demand projection in Chubu
Volumes（H2-t/y）Carbon-neutralin 2050
Scope of activities
300 Kt/yin Japan

Demandpotentiality
in Chubu

2025

Demandpotentiality
in Chubu

Maximum
DemandPotentiality

Potential end-users in Chubu
PowerPetro-refining/chemical

Co-firing with hydrogen atgas-fired power plants

Replacement with Steammethane reforming

Factory

Port/Airport

FC generator/Heatutilization/ Mobility-use

Mobility-use/
Co-generation etc

Hydrogen Station
Chubu accounts for 20% of FCV
target volumes in 2030 based on
METI roadmap

2030

After 2030
(2040～2050)

Following sectors are taken out of our scope as technologicaldevelopments in these fields are expected to take place after
2030.

Steel Manufacturing

Gas

Hydrogen reduction
steelmaking

Hydrogen usage
for Methanation

Hydrogen Utilization Study Group in Chubu

42. Study Results① Estimation of potential hydrogen demand in Chubu■The potential demand of hydrogen in Chubu region
40,000 t/y in 2025, 110,000 t/y in 2030
*subject to hydrogen price being able to reach switchable costs in each sector<Demands by region>■ Demand is expected to be concentrated by approx. 80% in Chita/Yokkaichi areas,
whereas factories/Hydrogen Stations are sparsely located in other remote areas.
<Demands by sector>■ Power and Petro-refining/chemical sectors accounts for 80% of total demand.
■ Remaining 20% demand in Factories/Hydrogen Stations for mobility-use/fuel cell
generator, requiring high purity hydrogen (above 99.97%).

Source: Google Map【Criteria for import terminal area selection】【Concept of supply-chain】■ Chita is the most probable candidate area toestablish an import terminal, with its large hydrogendemand.
■ Utilization of existing CH4 or new H2 pipelines
installation in Chita industrial zone.
■ Delivery of hydrogen from Chita to Yokkaichi and toother areas of remote end-users, to be made bytank-lorries from economical perspective.

■ Draft which would allow large vessels tonavigate/unload■ Necessary land area and surrounding
facilities for import terminal⇒Need to select area in line with portplanning

H2-t/yHydrogen Utilization Study Group in Chubu

5② Challenges to be solved including costs-related issues<Negative spread>■ in the case hydrogen CIF Japan price becomes 30 JPY/Nm3 in 2030,
the total negative spread between the hydrogen price and switchable
costs is expected to reach approx. 20 billion JPY annually.
＜Initial CAPEX＞■Initial CAPEX is expected to reach approx. 100 billion JPY including
receiving terminal, transportation infrastructure and facilities at end-users.
*As for the negative spread amount and initial CAPEX, there was no significant
difference between LH2 and MCH based on our study implemented so far. We haveexcluded ammonia from our study scope, as ammonia usage is mostly limited to cofiring at coal-fired power plant.

Necessary actions for social implementation<Commercial aspects>(1) Development of mid/long-term strategic policy and financial support tocompensate CAPEX/OPEX(2) Commitment of offtake agreement with major end-users(3) Commitment of stable hydrogen supply source(4) Selection of optimum import terminal area
<Technological aspects>
R&D of scaling up facilities and cost reduction<Policies>
Review of regulations related to hydrogen supply chain and propose necessary
regulatory reviews
Hydrogen Utilization Study Group in Chubu
Large-scale hydrogen
import from overseas

Import anddelivery operation

Major end-users（Power/Petro-refining/chemical）

Others (Factory/Hydrogen Station）(1) Mid/long-term strategic policy incl. financial support
Initial CAPEX approx. 100 billion JPY

Negative spread: approx. 20 billion JPY/y(3) Supply source(2) Demand expansion
Commit offtake agreement

Commit stable hydrogen supply source(4) Import Terminal
Select optimum import terminal area

Hydrogen Utilization Study Group in Chubu