The Certification of Low-Carbon Ammonia and Hydrogen in Japan

This analysis brief describes the discussion on the certification of low-carbon ammonia and hydrogen, including green ammonia and green hydrogen, in Japan. On 26 October 2020, the Japanese Government declared the country’s objective to be carbon neutral by 2050. Since then, the discussion of decarbonisation has taken up pace. However, there has been no deepening of the discussion on the certification and use of low-carbon hydrogen and ammonia. One of the reasons is the use of ammonia as a replacement for coal. The term “hydrogen and ammonia” utilisation, rather than “hydrogen” utilisation, has come to be used in the documents of the “6th Strategic Energy Plan”. Furthermore, since coal-ammonia co-firing technology is still in development, it is now accepted that discussions on low-carbon hydrogen and ammonia will be held after the technology is available and the supply chain is established. In the future, the Japanese Government is expected to discuss the certification of low-carbon hydrogen and ammonia, but there is no fixed date for the certification to become operational.

On 26 October 2020, the Suga administration declared that Japan would achieve carbon neutrality by 2050. Prior to 2020, the Japanese Government’s target for 2050 was 80% reduction (base year not prescribed). As the global trend toward decarbonisation intensified, discussions on the phase out of “inefficient coal power plants” began in August 2020 with a Working Group (WG) in the Ministry of Economy, Trade and Industry (METI) (Working Group on Coal-Fired Power).1 The WG inter alia discussed the use of ammonia as an alternative to coal. On 27 October, on the day after the declaration of carbon neutrality, the Public-Private Council for the Introduction of Fuel Ammonia2, consisting of thermal power producers, trading companies, ma-chinery manufacturers, and others, was es-tablished in METI.

According to a final report by the Fuel Ammonia Council, Japan currently con-sumes 1 million tons of ammonia annually, 20% of which are imported mainly from In-donesia and Malaysia. It is assumed that this would increase to 3 million tons per year by 2030 and 30 million tons per year by 2050. While the current global trade volume of ammonia is estimated to be 20 million tons, the supply side will focus on the establishment of a supply chain that can handle more than 1.5 times the current trade volume in Japan alone. This includes the introduction of a capable technology. On the demand side, emphasis was placed on the establishment of technologies for co-firing coal and ammonia in boilers and for exclusively firing ammonia. As for low-carbon ammonia, the report stated as follows:

“Toward carbon neutrality in 2050, we will aim to realise dedicated ammonia-fired power generation, with a step-by-step transition being realistic. The first step is to realise the co-firing of ammonia in thermal power generation, but for the time being, the introduction and market creation of fuel ammonia should be pursued without treatment of CO2 in the manufacturing process, having due regard to the relationship with the manufacturing country (legal system of the manufacturing country, etc). Then, after achieving a certain market size, CO2 emitted during production should be treated in a rational manner through appropriate means ranging from CO2 enhanced oil recovery (EOR), carbon capture and storage (CCS), carbon recycling, afforestation and offsetting with voluntary credits. In addition, through producing non-fossil values, we will foster an environment in which ammonia-derived electricity is valued and the investment predictability of business operators is ensured.”

Further, the final report of the above-mentioned WG stated the fol-lowing about low-carbon hydrogen and low-carbon ammonia:

“For the time being, whether ammonia and hydrogen are carbon-free or not (derived from non-fossil energy or fossil fuel) will not be questioned from the viewpoint of technological development and supply chain building, but their future treatment will be examined based on the actual situation.”

In other words, the METI Working Group in charge of policies related to hydrogen and ammonia placed the highest priority on establishing utilisation technologies, including the construction of supply chains, while using cost-competitive gray ammonia, and aiming to promote the use of ammonia as a fuel internationally. Thus, the certification of low-carbon hydrogen and ammonia was positioned as a future issue.

This was also reflected in the Japan’s 6th Strategic Energy Plan, which was adopted on 21 October 2021. While the 5th Strategic Energy Plan focussed only on “hydrogen”, the new 6th Strategic Energy Plan refers to “hydrogen and ammonia”. Furthermore, the new Plan sets a quantitative target for 1% of all electricity to be generated by hydrogen and ammonia by 2030.

With these government initiatives, Japanese thermal power producers and trading companies are working to build ammonia and hydrogen supply chains overseas. JERA, the biggest thermal power company in Japan, aims to achieve 20% ammonia co-firing at a domestic coal fired power plant by 2024 (Fig1)3, and has signed agreements with Petronas of Ma-laysia and Yara International of Norway to collaborate on building ammonia supply chains. JERA’s project is supported by the 2 trillion JPY “Green Innovation Fund” created on the occasion of the Japanese Government’s carbon neutral declaration.

Fig 1 JERA’s Demonstration Project at Hekinan coal-fired power plant

J-power, the second biggest thermal power company, is working with Iwatani Corporation, Kawasaki Heavy Industries and others on a demonstration project to transport hydrogen produced from lignite coal in Victoria, Australia, as liquefied hydrogen for use in thermal power generation.This project is also financed by the Green Innovation Fund and the goal is set at 30 JPY/Nm3-H2 by 2030. The budget for this project is approximately 300 billion JPY until 2030.

ITOCHU Corporation is considering to transport natural gas-derived hydrogen or ammonia from East Siberia to Japan, and is also conducting a feasibility study on the use of EOR to increase oil production (Fig 2)4. Marubeni Corporation, in collabora-tion with Woodside Energy of Australia and other companies, is carrying out a study on the establishment of a supply chain for green ammonia produced by hydro-power in Tasmania and natural gas-derived ammonia (Fig 3).5

Fig 2 Flow Diagram (Schematic)of the Amonia Value Chain between Eastern Siberia and Japan

Fig 3 The clean fuel amonia supply chaim between Australia and Japan

Regarding the gas-derived ammonia project, JERA and IHI also joined the project and plan to transport the ammonia for the above mentioned coal fired power plant. The consortium that consists of Iwatani, Kawasaki Heavy Industries, Marubeni Cor-poration, Stanwell in Australia, etc, has announced a detailed feasibility study on the development of a large-scale renewable hydrogen project in Central Queensland from 2021 (Fig 4).6

Fig 4 The proposed hydrogen supply chain, from hydrogen electrolysis facility to liquefaction and shipping from the Central Queensland Renewable Hydrogen Project

Mitsubishi Corporation, in collaboration with Royal Dutch Shell, is studying the establishment of a supply chain for natural gas-derived ammonia produced in Canada and supplied as fuel ammonia for thermal power plants in Japan. Mitsubishi Corporation, in collaboration with Saudi Aramco and others, also conducted a demonstration project in 2020 to supply Japan with ammonia produced in Saudi Arabia. Green ammonia produced from renewable energy is expected to be supplied to Japan around 2025.

Mitsui & Co has agreed with Wesfarmers Chemicals, Energy & Fertilisers Limited of Australia to conduct a study on the establishment of a project to supply Japan with ammonia produced by reforming natural gas with carbon capture and storage (CCS) in Western Australia (Fig 5).7

Fig 5 Mitsui & Co vision for a low-carbon domestic and international energy future

Both Mitsubishi Corporation and Mitsui & Co have entered into an agreement with Denbury Inc in Texas on carbon capture, use and storage (CCUS) operations for fuel ammonia or carbon-negative oil production in the US Gulf of Mexico. Thus, we can see that in Japan, both governmental discussions and corporate activities are primarily focussed on efforts to establish a supply chain that uses ammonia as a fuel in thermal power generation.

On the other hand, as far as hydrogen certification is concerned, so far, the Council for a Strategy for Hydrogen and Fuel Cells (CSHFC) has played an important role. The CSHFC was established in METI in 2013, with members including gas companies, electric power companies, automobile companies, university professors, machinery and chemical manufacturers, journalists, and local government governors, and has been discussing the widespread use of fuel cell vehicles (FCVs) and fuel cell combined heat and power (CHP) systems. Discussions on the certification of low carbon hydrogen was started in a sub-WG of the CSHFC, and then the need for a certification scheme for low-carbon hydrogen was highlighted in a report published in 2017. In early 2018, four categories (1star: 1.0-3.5 kg-CO2/Nm3-H2, 2star: 0.7-1.0 kg-CO2/Nm3-H2, 3star: 0.4-0.7 kg-CO2/Nm3-H2, 4star:0.1-0.4 kg-CO2/Nm3-H2) were proposed in the CO2 Free Hydrogen WG. However, no concrete discussion has taken place since then. One reason for this is that the distribution of FCVs has not progressed as much as expected, and the volume of hydrogen distribution has not expanded. In addition, as mentioned above, hydrogen and ammonia were both identified as thermal power generation fuels to be imported from overseas in the new 6th Strategic Energy Plan adopted in 2021. For as long as the discussion on low-carbon ammonia does not progress, it remains difficult to discuss low-carbon hydrogen.

As a regional initiative on certification, Aichi Prefecture (the Prefecture where Toyota Motor Corporation’s headquarters is located) launched a certification scheme for low-carbon hydrogen production in April 2018. Specifically, when renewable electricity, biogas, or the sodium hydroxide byproduct hydrogen is used, the scheme certifies the hydrogen produc-tion project and then measures the actual CO2 emissions.

Five projects (four of which are undertaken by Toyota Motor Corporation) have already been certified and are using green hydro-gen certified by Aichi Prefecture (Fig 6).8

Fig 6 One of the low-carbon hydrogen supply schemes certified by Aichi Prefectual Government

Government level discussions on the certification of low-carbon hydrogen took place in 2017 but with little progress made in expanding hydrogen demand for FCVs, those discussions have not progressed since 2018. One local government initiative is in operation for low-carbon hydrogen certification. In addition, since the declaration of carbon neutrality in 2020, the Japanese Government and companies have begun to actively consider the use of fuel ammonia in thermal power generation, so the focus is now on technology and supply chain development for the use of both ammonia and hydrogen. In the future, the Japanese Government is expected to discuss the certification of low-carbon hydrogen and ammonia, but there is no fixed date for the certification scheme to become operational.


Dr Seiichiro Kimura

Senior Researcher at the Renewable Energy Institute


Dr Seiichiro KimuraDr Seiichiro KIMURA (Ph.D., joined the Renewable Energy Institute in 2018. He specialises in cost-benefit analysis, techno-economic analysis with market penetrating simulation in the energy system. Seiichiro started his career at Mitsubishi Heavy Industries in 2004, and was engaged in the development of hydrogen energy until 2010. After working for the International Institute for Carbon-Neutral Energy Research of Kyushu University, he became an Associate at the Matsushita Institute of Government and Management between 2014 and 2018, where he was engaged in research on interconnecting electric power systems with the aim of increasing energy self-sufficiency through its own resources and eventually becoming a nation capable of suppling energy to other countries (energy-exporting nation). Seiichiro received a B.Sc. from Tokyo University of Science, M.Sc. from Tokyo Institute of Technology, and a Ph.D. from Kyushu University.