On 13 February 2024, the Japanese government approved a new legislation bill to provide subsidies to suppliers of hydrogen and ammonia. The new law is expected to be enacted in the current Diet session and to come into force by the end of thia year. This is a positive sign for the long talked about subsidies to be introduced by the Japanese government.
Specifically, the Japanese government intends to fund the price difference between hydrogen and natural gas, and in turn encouraging production of green hydrogen and development of technologies and other means to reduce environmental emissions (such as carbon dioxide (CO2) capture and underground storage).
The Cabinet also approved a new legislative bill which will establish new rights associated with the storage of CO2 emitted from factories and other sources, such as "exploratory drilling rights" and "storage rights". This new law is expected to provide more stable legal grounds for developing CCS businesses.
With the Japanese government having set a target of reducing greenhouse gas emissions to virtually zero by 2050, it is encouraging to see that this new legislation is now being considered. With the new laws seeking to accelerate the introduction of new legislation related to hydrogen supply and CO2 storage, we will see further increased stimulation of private sector participation and investment.
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