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10th IEEJ Webinar for the World

Decarbonizing Asian Economies with
Green Hydrogen
The Institute of Energy Economics, Japan (IEEJ)IEEJ © 2023

Hiroko NAKAMURA, Takahiro NAGATA, Sichao KAN, Kentaro HAYASHI, Yoshiaki SHIBATA

Outline(1) Background & Objectives(2) Scope of study & Methodology(3) Major Findings

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(4) Implications
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Background and Objectives
 Low-carbon hydrogen can be produced from a wide range of resources; and therefore, it can beproduced almost anywhere in the world.
 The development of a green hydrogen economy in the ASEAN region can contribute to accelerating
region-wide transition to clean and sustainable energy and raising its energy self-sufficiency, and inturn enhancing the region’s energy security.
 The ASEAN region bears great potential for renewable power, including solar, wind, and hydropower.
These resources can be used to produce green hydrogen, but this potential has yet to be
sufficiently explored.
 Given its proximity, the ASEAN region could promise to be a future supplier of hydrogen to Japan,
depending on its potential.

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This study explores the ASEAN region’s potential for using locally produced green hydrogento decarbonize its economy, focusing on its application in hard-to-abate sectors.
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Background & Objectives:
Primary energy mix in ASEAN member countries
 All countries except Myanmar rely heavily on fossil fuels.
 In all countries biomass accounts for a dominant share of renewable energy.

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 Solar power and wind power account for less than 1%.

FIG. PRIMARY ENERGY MIX IN ASEAN MEMBER COUNTRIES (2020)
Source: compiled by authors based on IEA (2022b)

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Background & Objectives:
Climate policies of ASEAN member countries
 Most countries have CN goals supported by NDCs, many of which have been updated
over the past two years.
 Most countries have pledged to phase out coal or not approve new coal projects.
 Decarbonization and increased renewables deployment are urgently called for.

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TABLE. CLIMATE COALS IN THE ASEAN REGION
Unconditional

Conditional2)

Baseline yearCoalphaseout policy

Relative emissions

20%

-

BAU

Yes

2050

Relative emissions

41.7%

-

BAU

Yes4)

IDN

2060

Relative emissions

29%

41%

BAU

Yes4)

LAO

2060

Relative emissions

60%-

Baseline

No

MYS

2050

Carbon intensity

45%

-

2005

Yes4)

Avoided emissions:
245 MtCO2-

Country1)

CN
goal

BRN

2030 GHG emission reduction target (NDC)
Reduction target
type

2050

KHM

MMR

2050

Other

PHL

-

Relative emissions

No

2.71%

75%

BAU

Yes4)

-

2005

Yes

SGP

2050

Carbon intensity

36%5)

THA

20502)

Relative emissions

20%

25%

BAU

No

VNM

2050

Relative emissions

9%

27%

BAU

Yes

Source: compiled by authors based on NDCs and other materials

Notes:
1)The country codes used are as follows:
Brunei Darussalam (BRN), Cambodia (KHM),
Indonesia (IDN), Lao DPR (LAO), Malaysia(MYS), Myanmar (MMR), the Philippines(PHL), Singapore (SGP), Thailand (THA), andVietnam (VNM)
2)Conditional targets are dependent on theavailability of international support for finance,technology transfer and development, and/or
capacity building.
3)Thailand aims to achieve carbon neutrality
by 2050 and net zero carbon GHG emissions
by 2065.
4)No new projects will be approved.
5)Singapore aims to peak emissions in 2030,
which will lead to 36% reductions relative to2005 in 2030.

4Outline(1) Background & Objectives(2) Scope of Study & Methodology(3) Major Findings

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(4) Implications
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Scope of Study Industries and part of the transport sector in the ASEAN region that are difficult todecarbonize by electrification (hard-to-abate).
*Power generation sector is not included.
 Focus on Green Hydrogen, produced by electrolysis using renewable power, such as solar,
wind, hydro, geothermal and biomass.

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Because…
1. Green hydrogen has low carbon footprint.
→Can avoid impact of global market and political pressure against using fossil fuels2.

The price of blue hydrogen and its derivatives risk being affected by volatile market fossil fuel prices.

3.

Renewables can be found in a wider area.
→ Therefore, any country can become a green hydrogen exporter by harnessing such resources.

4.

Green hydrogen supply chains can be diversified.
→Can contibute to enhancing regional energy security.

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Methodology:
Potential hydrogen demand (Industry sector, 2019)
1. Identify final energy demand in theindustry sector in 2019 for each ASEAN
country by industry and by energy type.
2. Identify the share of high temperature(≥400°C) heat demand against total fossil
fuel consumption for each industry (Table).
3. Estimate potential hydrogen demand by
multiplying the total fossil fuelconsumption in each industrial sector by
the abovementioned sector-specific ratio.
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*The same conversion efficiency is assumed for fossil fuel-based
burners/boilers and hydrogen burners/boilers.

TABLE. SHARE OF ≥400°C HEAT DEMAND IN FOSSIL FUELCONSUMPTION BY INDUSTRY

Iron and steel
Chemical and petrochemical
Non-ferrousmetals
Non-metallicminerals
Transport equipment
Machinery
Food and tobacco
Paper,pulp and printing
Wood and wood products
Textile and leather
Industry not elsewhere specified
Source: MRI (2018)

98%
33%
98%
92%
44%
44%
12%
58%
58%
5%
44%

Methodology:
Potential hydrogen demand (Transport sector, 2019)
1. Identify final energy demand in 2019 for each ASEAN country by mode of transport
2. Road transport:• Light-duty vehicles (fuel= gasoline & LPG)
→Replaced by battery electric vehicles (BEV)• Heavy-duty vehicles (assuming fuel = diesel) →Replaced by fuel-cell vehicles (FCEV)*The same fuel efficiency is assumed for FCEVs and diesel vehicles..

3. Air, maritime, and rail transport: assumed that all fuels are replaced with hydrogen.
*Should be noted that synthesized fuels (e-fuel) produced from hydrogen may be chosen for thesemodes of transportation.
*The same fuel efficiency is assumed for conventional fuels and hydrogen.

Potential hydrogen demand (2050) ＝ Potential hydrogen demand (2019)IEEJ © 2023

×(final energy consumption in the industry & transport sectors in ASEAN countries(2050)/ final energy consumption in the industry & transport sectors in ASEAN countries (2019) )8

Methodology:
Potential hydrogen supply (2050)
Given that increasing renewable power generation should be prioritized in the ASEAN
region, renewable power generation is assumed to be primarily used to replace fossil fuelfired thermal power generation, after which the remaining renewable power could be used
to produce hydrogen.
1. Renewable energy potential (potential installed capacity) is estimated from existingstudies (ERIA, 2021; IRENA & ACE, 2022).
2. Capacity factor of renewable power generation in each ASEAN country is derived fromIRENA Data & Statistics.
3. Renewable energy potential (potential power output) is calculated.
Potential hydrogen supply (2050) ＝ Renewable energy potential (TWh)IEEJ © 2023

ー（①Total power generation (2050) ＋②Additional power generation*）*”Additional power generation” = Potential hydrogen demand in the industry and transport sectors (2050)
Considering that all applications using fossil fuels that can electrified in 2050 will run on electric power9Outline(1) Background & Objectives(2) Scope of Study & Methodology(3) Major Findings

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(4) Implications
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Major Findings:
Potential hydrogen demand (Industry sector)
 Despite improvements in energy efficiency, energy consumption in the industry sector will increasesignificantly in 2050 driven by economic growth. →Potential hydrogen demand will increase accordingly.
 Potential hydrogen demand is largest in Indonesia (62 Mtoe).
 Potential hydrogen demand of the entire ASEAN region is 152 Mtoe, equivalent to 40% of total final energy
consumption across the industry sector.
80

OthersTextile and leather

60

Wood and wood products

Mtoe

Paper, pulp and printing
40

Food and tobacco
MachineryTransport equipment20

Non-metallic minerals
Non-ferrous metals

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2019
2050
2019
2050
2019
2050
2019
2050
2019
2050
2019
2050
2019
2050
2019
2050
2019
2050
2019
2050

0

BRN KHM IDN

LAO MYS MMR PHL

SGPChemical and petrochemical
Iron and steel

THA VNM

FIG. POTENTIAL INDUSTRY HYDROGEN DEMAND (2019 AND 2050)

Major Findings:
Potential hydrogen demand (Transport sector)

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 Hydrogen demand will increase in 2050 with increased energy consumption in the transport sector
driven by economic growth. →Potential hydrogen demand will increase accordingly.
 Given its large population, Indonesia is home to the largest potential hydrogen demand (73 Mtoe).
 Potential hydrogen demand in the transport sector across the entire ASEAN region is 166 Mtoe,
accounting for 44% of final energy consumption in the sector.
 Road transport (vehicles) accounts for approximately 80% of total potential hydrogen supply.

FIG. POTENTIAL TRANSPORT HYDROGEN DEMAND (2019 AND 2050)

Major Findings:
Potential hydrogen supply
 Two cases (RE P1 & RE P2) represent potential hydrogen supply.
 Even under the assumption that renewables will cover both total power generation in 2050 as projected in
ERIA (2021) and the additional power generation needed to accommodate increased electrification
demand driven by further electrification in 2050 and beyond (PG 2050), the renewable energy potential inmost ASEAN countries exceeds total power generation. Therefore, surplus renewable energy is available foruse in hydrogen production.
 The potential for hydrogen production is especially large in Cambodia, Indonesia, Laos PDR, Myanmar,
Thailand, and Vietnam.
7,000
6,000

TWh

5,000

Additional power needed
Power Generation

4,000

Geothermal

3,000

Hydro
Biomass

2,000

Offshore wind

1,000

Onshore wind
Solar PVIEEJ © 2023

RE P1
RE P2
PG 2050RE P1
RE P2
PG 2050RE P1
RE P2
PG 2050RE P1
RE P2
PG 2050RE P1
RE P2
PG 2050RE P1
RE P2
PG 2050RE P1
RE P2
PG 2050RE P1
RE P2
PG 2050RE P1
RE P2
PG 2050RE P1
RE P2
PG 2050

0

BRN

KHM

IDN

LAO

MYS

MMR

PHL

SGP

THA

VNM

FIG. RENEWABLE ENERGY POTENTIAL FOR HYDROGEN PRODUCTION Across the ASEAN region, total power generation is
projected to be 2,900TWh in 2050. Additional
electric power generation to accommodate
electrification demand in 2050 and beyond willamount to 2,000TWh, leading to a total electric
power demand of 4,900 TWh.
 ASEAN-wide renewable energy potential ranges
between 11,000 (RE P1) ~ 25,000 (RE P2) TWh.
 6,000 ~ 20,000 TWh of renewable energy can beused for hydrogen production.

Major Findings:
Comparison of potential green hydrogen supply & demand In all countries except Malaysia, as well as Brunei Darussalam and Singapore where both supply anddemand will be limited, potential supply exceeded demand.
 Myanmar and Thailand have an outstanding amount of potential surplus supply.
 the ASEAN region bears the potential to supply three times the potential hydrogen demand in 2050.
1,400
1,200

Green H2 production potential

Mtoe

1,000
800
H2 demand potential (Transport)
H2 demand potential (Industry)

600
400
200

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0

BRN

KHM

IDN

LAO

MYS

MMR

PHL

SGP

THA

VNM ASEAN

FIG. COMPARISON OF POTENTIAL GREEN HYDROGEN SUPPLY & DEMAND (2050)

Major Findings:
Sufficiency of potential green hydrogen supply (2050)

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 Myanmar, Lao PDR, and Cambodia will
have sufficient hydrogen supply to coverdomestic demand.
 Thailand, the Philippines, and Indonesia
may have a shortage of domestic supply
when the physical potential is not fully
harnessed.
 With 54~843Mtoe of surplus supply, evenin the most pessimistic case, there is anample potential supply of green hydrogenacross the entire ASEAN region to coverregional hydrogen demand.
Intra-regional trade of green hydrogen could
offer a solution to the region-wide
decarbonization of hard-to-abate industries
using local resources

InsufficientSufficient

ASEAN
VietnamThailandSingapore
Philippines
Myanmar
Malaysia
Lao PDR
Indonesia
Cambodia
Brunei
-200

0

200

400
Mtoe

600

800

1000

FIG. SUFFICIENCY OF POTENTIAL GREEN HYDROGEN SUPPLY (2050))

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Outline(1) Background & Objectives(2) Scope of Study & Methodology(3) Major Findings

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(4) Implications
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Implications:
Potential geopolitical changes in the ASEAN region
 Green hydrogen production may change the geopolitics of the ASEAN region
 Low-income economies, such as Myanmar, Lao PDR, and Cambodia, will have the opportunity to become
the region’s energy supplier However, most ASEAN countries have yet to develop national hydrogen strategies.

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TABLE. HYDROGEN IN ASEAN ENERGY POLICIESBruneiConcluded MOUs with Asian countries such as Japan and Singapore on cooperation onbuilding an international hydrogen supply chain. Ongoing studies and pilots led byprivate sector.

Indonesia

National Energy Plan (RUEN) includes a general action plan for hydrogen development.

Malaysia

National Energy Policy 2022-2040 includes initiatives to formulate a hydrogen roadmap,
a national strategy, and relevant regulations.
Aims to establish an internationally competitive hydrogen energy hub in Sarawak in thelong term (2031-2040).

Singapore

National Hydrogen Strategy 2022

Implications:
Policy challenges to developing the full renewable energy potential
 Power development plans and renewable power targets fall substantially short oftheir renewable energy potential (Table).
 Many policy challenges remain in developing renewable energy:••••

Lack of financial support and channels
Lack of experience and regulatory frameworks
Insufficient coordination among government agencies
Limited infrastructure (e.g. grid enhancement for massive renewable integration)

TABLE. COMPARISON OF RENEWABLE TARGETS AND POTENTIAL (GW)
Renewable targetIDN
MYS

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PHL
THA

552 GW (2060)(Proposed National Grand Energy Strategy)
18 GW (2035)(MyRER)
61 GW (2040)(NREP 2020-2040)
19 GW (2037)(AEDP 2018)

Potential supply (RE P1)
1,884 GW
225 GW
963 GW
378 GW

Source: compiled by authors based on various sources, as indicated18Implications:
Exporting green hydrogen outside the ASEAN region
The ASEAN region will have 54~843Mtoe of green hydrogen (≒20〜300 Mt-H2)
The ASEAN regionbears the potential to become a major supplier of green hydrogen forJapan. The proximity of the region to Japan will be an advantage in diversifying energy
imports and enhancing energy security.
*Japan aims to introduce 3 million tonnes of hydrogen in 2030 and 20 million tonnes in 2050.

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Green hydrogen will play an important role in decarbonizing marine fuels. While thepotential regional e-fuel supply is unlikely to cover all marine bunker fuel sales by
Singapore (around 50 million tonnes), if the surplus supply of green hydrogen (around 50～850 Mtoe) were to be converted to e-fuel, the region would be able to supply around40～600 Mtoe of e-fuelA reasonable amount of regionally produced e-fuel can be collected in Singapore fromacross the ASEAN region, potentially offering large business opportunities for the
ASEAN region.
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Implications:
Building an intra-regional green hydrogen supply chain
Areas with high hydrogen demand are not always located close to potential production
hubs; and therefore, new international supply chains and networks will need to bebuilt. By establishing an intra-regional supply chain and distribution network, all ASEAN
countries will gain access to green hydrogen.
Regional use of regionally produced green hydrogen will help enhance regional energy
security.
Regional agreement will be essential to overcome many challenges:• Selection of the hydrogen carrier in light of various factors, including cost, infrastructure availability(including repurposing), and end-use applications• Selection of green hydrogen production site / mode of distribution (international transmission lines,
pipleines, etc.)

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• Infrastructure (shipping and receiving ports, storage facilities, etc) that can accomodate the preferredhydrogen carrier.
• Regional certification scheme for hydrogen that is consistent across borders.

20Implications:
Further promoting renewable energy deployment
Renewable power should primarily be fully harnessed to decarbonize sectors whose
carbon footprint can be lowered by using it directly.
For green hydrogen to be a realistic and optimal solution for decarbonizing the economy,
the renewable power used in its production should be available in surplus to thatneeded for more efficient uses.
Investment should first be targeted at renewable power projects.
It is essential that polices are secured for the massive deployment of renewable energy
in each country.
• Abolishing fossil fuel subsidies

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• Grid enhancements to integrate more variable renewable energy.

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Implications:Japan’s role in promoting green hydrogen development in the ASEAN region
 Proximity of the ASEAN serves Japan’s energy security.
 Increased investment and government support in the earlier phases (renewable power generation &hydrogen production, including electrolyzer technology development, etc.) of the supply chain••

Accelerated decarbonization of the electric power sector in the ASEAN region
Increased access for Japanese actors to renewables for green hydrogen production

 Players may be able to enjoy first-mover advantage in establishing the business environment for greenhydrogen.
 2023 marks the “50th Year of ASEAN-Japan Friendship and Cooperation.” Under the cooperation
frameworks launched for supporting ASEAN countries’ energy transition, Japan can also support thedesigning of aggressive but feasible decarbonization policies with consideration of region-specificcircumstances and needs:

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•
•

•
•
•

Technological and financial support
Sharing experiences with infrastructure, transport and storage technologies, rules and regulations, safety
standards, etc.
In-depth studies to reveal local challenges and solutions
Support in formulating master plans based on such studies
Stakeholder dialogue22

Major references
Ratio of high temperature （≧400℃）heat demand against total fossil fuel consumption：
MRI (2018) Heisei 29 nen Shin-enerugi nado no sokushin no tame no kisho chosa (netsu no jukyu oyobi netsu-kyokyu kiki
no tokusei nado ni kansuru chosa) chosa hokokusho (Study report: FY2017 Basic study for the accelerated deployment of
new energy (study on heat supply and demand and the characteristics of heat supply equipment)). Mitsubishi ResearchInstitute & Ministry of Economy, Trade and Industry.
https://warp.da.ndl.go.jp/info:ndljp/pid/11590486/www.meti.go.jp/meti_lib/report/H29FY/000018.pdf
Final energy consumption (2019) in the industry and transport sectors in ASEAN member countries:
IEA (2022) World Energy Statistics 2022. International Energy Agency
Final energy consumption (2050) in the industry and transport sectors in ASEAN member countries:
ERIA (2021). Outlook and Energy Saving Potential in East Asia 2020. Economic Research Institute for ASEAN and East
Asiahttps://www.eria.org/uploads/media/Books/2021-Energy-Outlook-and-Saving-Potential-East-Asia-2020/EnergyOutlook-and-Saving-Potential-East-Asia-2020-1504.pdf

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Renewable power potential in ASEAN member countries (potential capacity):
RE P1: ERIA (2022). Decarbonisation of ASEAN Energy Systems: Optimum Technology Selection Model Analysis up to 2060.
ERIA Research Project Retrieved on December 19, 2022 from https://www.eria.org/uploads/media/Research-ProjectReport/RPR-2022-05/Decarbonisation-of-ASEAN-Energy
RE P2: IRENA & ACE (2022). Renewable energy outlook for ASEAN: Towards a regional energy transition (2nd ed.).
International Renewable Energy Agency & ASEAN Centre for Energy. https://www.irena.org//media/Files/IRENA/Agency/Publication/2022/Sep/IRENA_Renewable_energy_outlook_ASEAN_2022.pdf?rev=ef7557c64c3
b4750be08f9590601634c
Capacity factor for power generation facilities in ASEAN member countries:
IRENA Data & Statistics

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Thank you very much for your attention.

Contact : report@tky.ieej.or.jp

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