13 minute read | July.26.2023
Asian countries have predominantly relied on coal and natural gas to meet their electricity demands, but the landscape is rapidly evolving. Many Asian countries have committed to ambitious net-zero and decarbonisation goals. Indeed, there has been significant growth over the last few years in developing “traditional” renewable energy projects such as onshore wind, offshore wind, solar, and hybrid wind-and-solar.
However, in Asia, electrification and “traditional” renewable energy projects will be insufficient to address countries’ net zero and decarbonisation goals. In light of these challenges, Asian countries are exploring new alternatives to reduce their carbon emissions and reliance on fossil fuels. Like other areas of the world, Asia is ripe for the proliferation of green (or low-carbon) hydrogen (i.e., hydrogen that is produced by the electrolysis of water, powered entirely by renewable energy) as well as green (or low-carbon) ammonia (i.e., that is produced by the electrolysis of water and nitrogen separated from the air) to play valuable roles.
Strong government policy and support, together with private sector commitment and investment, is helping the still-nascent green hydrogen sector gather momentum in the Asia Pacific region. Asia is a vast area comprising almost 50 countries, all of whom are at different stages of their hydrogen journey. In this article, we take a quick snapshot of green hydrogen initiatives in:
The Singapore government is committed to an ambitious goal of achieving net-zero by 2050. To achieve this, the government has identified low-carbon hydrogen as one of the key components of Singapore’s future power mix, with the potential to supply up to half of Singapore’s power needs by 2050. Low-carbon hydrogen and hydrogen-derived fuels are also seen as potential alternatives to fossil fuels in Singapore’s maritime and aviation sectors, both of which are pillars of Singapore’s economy.
As part of Singapore’s National Hydrogen Strategy, Singapore is focusing its efforts on (amongst other things):
The Singapore Government has committed more than S$180 million to research and development work to advance low-carbon technologies, including low-carbon hydrogen, with S$55 million already awarded in support of 12 projects. Singapore also has signed Memorandums of Understandings (MOUs) with Australia on low-emissions technologies and solutions and with Chile on low-carbon hydrogen technologies.
The private sector has responded to the Singapore Government’s support for green hydrogen. NYSE-listed Linde has announced that it will build, own and operate a 9 MW alkaline electrolyser plant on Jurong Island in Singapore, which will produce green hydrogen that Linde will supply to Evonik (a German specialty chemicals company) to manufacture methionine (an essential component in animal feed) as well as to the local merchant market.
Singapore’s Sembcorp Industries (through its subsidiary) has also entered into a strategic collaboration MOU with Japan’s Chiyoda Corporation and Mitsubishi Corporation to explore the feasibility and implementation of a commercial-scale supply chain to deliver decarbonised hydrogen into Singapore, using Chiyoda’s proven hydrogen storage and transportation technology.
Japan is, and has been, one of the frontrunners in Asia in terms of its hydrogen strategy. Japan was amongst the first to adopt a focused approach to the development of its hydrogen economy via its “Basic Hydrogen Strategy” in 2017, and opened one of the world's largest green hydrogen production facilities in Fukushima in 2020. Japan has technological strengths in several hydrogen-related areas such as hydrogen fuel cells, for which it has the world's largest number of patents, and in marine transportation.
Japan has been conducting the world-first Hydrogen Energy Supply Chain Project, which will connect the Australian state of Victoria with Japan, and continues to look to accelerate its development of hydrogen supply chains. Japan revised the Basic Hydrogen Strategy in June 2023 to announce that it intends to boost annual supply of hydrogen to 3 million tonnes by 2030, 12 million tonnes by 2040, and 20 million by 2050 with planned investment of 15 trillion Japanese Yen (more than US$100 billion) over 15 years in the public and private sectors. The Japanese government has also been supporting the pilot project for electrolysis to produce hydrogen in the aim of commercialisation of green hydrogen. In addition, demonstration tests of hydrogen power generation are being conducted to realise commercialisation by 2030.
In the private sector, Toyota launched the world's first commercial Fuel Cell Vehicle (FCV) in 2014, and Honda is also developing a new model of FCV. In addition, hydrogen stations are being developed, and hydrogen began to be used in trucks and other commercial vehicles from 2023.
Through an INR 197,440 million (approximately USD 2.4 billion) National Green Hydrogen Mission that was approved by the Union Cabinet in January 2023, India intends to be a leading supplier of green hydrogen. A bulk of the funds (INR 17,490 crore, or approximately USD 2.1 billion) is allocated for the Strategic Interventions for Green Hydrogen Transition programme, which will provide financial incentives targeting domestic manufacturing of electrolysers and production of green hydrogen. The remainder will be allocated for pilot projects, R&D and other components. India’s goal is to develop green hydrogen production capacity of at least 5 million MT per annum with an associated renewable energy capacity addition of about 125 GW by 2030.
The Indian government is expected to issue guidelines for green hydrogen producers and tenders for electrolyser manufacturers soon. The Indian government has announced that it intends to extend incentives to green hydrogen fuel producers worth at least 10% of their costs, where such incentives would be awarded through a competitive bidding process. The Indian government is also expected to support about 3,000 MW of annual electrolyser capacity for 5 years across various tranches, with each tranche likely to be for 1,500 MW of capacity at a fixed incentive of INR 4,440 per kW.
While Indonesia has yet to publish a formal green hydrogen strategy, the government has acknowledged the potential for hydrogen and green hydrogen to aid in Indonesia’s energy transition. Indonesia has committed to a tightened emissions reduction target of 32% by 2030 (up from its previous target of 29%). This target will be supported by a plan to produce green and blue hydrogen from underutilised domestic renewable energy. The Indonesian Ministry of Energy and Mineral Resources estimated in October 2022 that only 0.3% of Indonesia’s renewable energy potential has been realised.
Various pilot projects are underway in Indonesia with a view of tapping and developing Indonesia’s green (and blue) hydrogen potential, with involvement largely from Indonesia’s state-owned companies. For instance, Indonesia’s state-owned electricity company Persero and Hydrogen de France (HDF Energy) have (in May 2023) signed a Memorandum of Understanding to develop projects that combine renewable energy generation with on-site green hydrogen generation. That would enable Indonesia to not only overcome the “unique constraints due to its archipelago context” but also make the country a green hydrogen frontrunner in Asia.
Saudi Arabian power generation company ACWA has also signed an agreement with Indonesian state-owned chemical manufacturing company Pupuk Indonesia, the largest ammonia offtaker in the region, to investigate developing a giga-scale green hydrogen project in the country. Pertamina Geothermal Energy (a subsidiary of national oil company Pertamina) is also conducting a green hydrogen pilot in the Ulubelu geothermal region of Lampung.
South Korea is a frontrunner in hydrogen policy and sees green hydrogen as a cornerstone of its 2050 net zero climate strategy. As of 2022, South Korea accounts for approximately one-third of the world’s installed capacity of utility-scale fuel cells.
Following its 2019 Hydrogen Economy Roadmap, South Korea announced a new hydrogen policy in 2022 that aims to establish a hydrogen supply chain and further nurture a world-leading green hydrogen industry. While the policy initially aims to develop both blue and green hydrogen, green hydrogen is anticipated to comprise 93% of South Korea’s hydrogen consumption by 2050. South Korea has set a goal of having green hydrogen comprise 7.1% of the country’s energy mix by 2036.
South Korea’s private sector plays a key role in the nation’s green hydrogen development. Notably, five of South Korea’s largest conglomerates (SK, Hyundai Motor, POSCO, Hanwha and Hyosung) have pledged to collectively invest approximately KRW 43 trillion (approximately US$33 billion) through to 2030, in all areas of the hydrogen supply chain, from production to distribution to storage and use (including fuel cell power plants, hydrogen vehicles, hydrogen reduction steelmaking, green hydrogen production and hydrogen liquefaction plants). The South Korean government also provides various benefits to “hydrogen-specialised” companies, such as R&D subsidies and tax exemptions.
South Korea is focusing also on establishing a global import supply chain. To this end, in 2021, South Korea and Chile signed a memorandum of understanding to expand cooperation in the low-carbon hydrogen sector. The two countries are exploring additional ways to cooperate in a transition to a hydrogen economy, and held a Chile-Korea hydrogen cooperation seminar in April 2023 with government officials from both countries, as well as representatives from public organisations and companies such as Hyundai Motor and InvestChile, in attendance. Australia has also historically been a key partner for South Korea in the import of energy, and the governments and private sector players in both countries have recognised the potential for cooperation in the hydrogen and ammonia space. In 2021, Australia and South Korea announced a Zero Emissions Technology Partnership, intended to (amongst other things) drive increased adoption of low and zero emissions technologies and advance technologies and trade systems for hydrogen supply as one of the early priorities.
China is the largest hydrogen producer in the world. In 2021, the nation produced about 33 million tons of hydrogen, up 32% year on year. Most of this hydrogen is currently (and will, in the short and medium term, be) made from fossil fuels, partially from industrial byproducts, but the proportion of hydrogen produced by renewable energy is intended to ramp up year by year. By 2050, it is expected that about 70% of China’s hydrogen will be made from renewable energy.
This target is supported by China’s Hydrogen Industry Medium- and Long-Term Development Plan (2021–2035), which targets green hydrogen production to reach 100,000-200,000 tonnes per year by 2025 and to have about 50,000 hydrogen-fuelled vehicles by 2025. Besides transport, the plan envisages the use of clean hydrogen in other sectors such as energy storage, electricity generation and industry.
Local governments within China are also pushing hydrogen policies across China. Even China’s coal-heavy Inner Mongolia region has laid out plans to develop seven wind and solar power projects that could produce almost 67,000 tonnes per year of hydrogen, as part of a push to raise output to 500,000 tonnes per year by 2025. An example of this growth of green hydrogen in Inner Mongolia is the Inner Mongolia Erdos Wind-Solar Green Hydrogen Project, which was launched in February 2023 by China’s oil and gas company, Sinopec. This is Sinopec’s first green hydrogen demonstration project in the Inner Mongolia Autonomous Region. It is expected to produce 30,000 tonnes of green hydrogen annually. It will be used to reduce the carbon intensity of an adjacent coal processing project and to reduce carbon emissions by an estimated 1.43 million tonnes annually, contributing 600 million yuan (approximately $87 million) in GDP.
Australia plans to transition to 82% renewable electricity and to reduce national emissions by 43% by 2030. To this end, Australia is continuing its drive to become a global exporter of green hydrogen and has announced that it will be looking to revise its 2019 National Hydrogen Strategy in light of international developments, including the IRA in the U.S..
In May 2023, the Australian government announced that it will invest A$2 billion to accelerate large-scale green hydrogen development. This funding will provide revenue support for investment in renewable hydrogen production through competitive production contracts, and will cover the commercial gap between the cost of hydrogen production from renewables and its current market price. This is a continuation of the Australian Renewable Energy Agency’s (ARENA) support of hydrogen projects. Over the past years, ARENA has provided A$236 million to 43 renewable hydrogen projects, from early stage research to deployment projects including hydrogen refuelling and hydrogen trucks, hydrogen for producing green ammonia, hydrogen for use in alumina refining, gas blending and remote power.
Australia’s private sector is also active in the hydrogen space, with a reported A$127 billion pipeline of announced hydrogen investment. One example is ENGIE, which in September 2022 took final investment decision in the development of one of the world’s first industrial-scale renewable hydrogen projects, to be located in the Pilbara region of Western Australia. This project is scheduled for completion in 2024 and is developed with the support of a A$47.5 million grant from ARENA’s Renewable Hydrogen Deployment Fund and a A$2 million grant by the Western Australian Government’s Renewable Hydrogen Fund. When completed, the project will include a 10 MW electrolyser powered by 18 MW of solar PV and supported by an 8 MW battery energy storage system, and will be expected to produce up to 640 tonnes of renewable hydrogen per year as a zero carbon feedstock for Yara Australia’s ammonia production facility in Karratha.
Another example is BP, which in June 2022 acquired a 40.5% stake in the Asian Renewable Energy Hub, a vast project planned for Australia set to span an area of 6,500 km2, and has the potential to be one of the largest renewables and green hydrogen hubs in the world. The project is envisaged to develop up to 26GW of combined solar and wind generating capacity (translating to 1.6 million tonnes of green hydrogen or 9 million tonnes of green ammonia per year). The project is intended to provide power to local customers, and the hydrogen and ammonia would be used in Australia and exported internationally.
With the implementation of the Inflation Reduction Act in the United States, the hydrogen market there has grown exponentially. Green ammonia has seen a similar expansion, aided by support from the U.S.’ Advanced Research Projects Agency–Energy.
In Europe, several initiatives have catalysed the development of a green hydrogen and ammonia sector, such as:
The Middle East is also poised to become a dominant force in the sector. For instance, Saudi Arabia’s Neom Green Hydrogen Company recently reached financial close for its US$8.4bn hydrogen plant. When completed, this project will likely be one of the world’s largest commercial-scale green hydrogen production facilities, using 4GW of solar and wind energy to produce up to 600 tonnes of green hydrogen in the form of liquid ammonia per day by 2026.
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