Market Overview

In Japan, hydrogen energy has been used as a power source for systems such as home fuel cell cogeneration systems, also known as “Ene-Farm”, as well as for fuel cell vehicles (FCVs).
Since the government announced its goal of achieving “carbon neutrality" by 2050 in October 2020, hydrogen has garnered attention as a CO2-free fuel and its applications have broadened. Product developments are underway, which include fuel cell-powered machinery for business or industrial use. Technical developments for hydrogen combustion are also progressing in burners and other combustion equipment. Furthermore, the use of hydrogen energy is expanding in the steel industry and the mobility sector, including in commercial vehicles.
Based on the value of newly implemented systems in the relevant year, the market size of hydrogen-powered energy systems and equipment in Japan is expected to reach 359.9 billion yen by FY2030.

Noteworthy Topics

Hydrogen and Ammonia Power Generation

Hydrogen or ammonia power generation uses turbines that are rotated by steam or gas produced by combustion. Therefore, there are two types: steam power generation, which uses boilers, and gas turbine power generation. Power generation can also be classified by fuel combination. The two main categories are co-firing, which involves the combustion of fossil and non-fossil fuels, and the exclusive hydrogen or ammonia firing. Major electric power companies are planning and implementing demonstrations of fuel-combined and specific-fuel combustions at existing thermal power generation facilities.

Power generation using hydrogen or ammonia is expected to grow, as a major demand sector for these fuels. Ammonia power generation is likely to be implemented more quickly, starting with co-firing at launch. This is because ammonia already has a supply system established, unlike hydrogen. There are also ongoing demonstrations of ammonia co-firing power generation at a power generation facility remodeled from a coal-based thermal power plant.    

Future Outlook

In the medium to long term, demand for hydrogen energy in Japan is expected to be driven by power generation from hydrogen and ammonia. Increased demand from the power generation sector will encourage the development of related infrastructure in stages. This infrastructure includes receiving and storage facilities in the districts surrounding hydrogen and ammonia power generation facilities. Accumulating diverse industrial demands centered on these facilities will ensure stable consumption volumes and reduce hydrogen energy procurement costs.

Given the potential for procuring greater volumes of hydrogen and lower hydrogen procurement costs in the 2030s than in the 2020s, the market size for hydrogen energy-powered systems and equipment is projected to grow in the medium to long term. It is forecast to reach 986.9 billion yen by FY2040 and 1.687 trillion yen by FY2050.

Research Outline