This article is Part 2 of a deep look at Australian-Japanese energy relations. The first part, which was published in the Oct 30 issue focused on coal and LNG.
As part of its energy transition, known as the GX, Japan plans to invest ¥150 trillion worth of public-private funds over the next ten years. A significant part of this will go towards clean hydrogen and ammonia value chains and infrastructure, most of which will be built overseas.
As a mountainous country about the size of California, but with three times the population, Japan has limited space on which to develop large-scale renewable power projects. Thus, the government has married efforts in renewables with the promotion of solutions around clean-burning hydrogen. As a result, it is looking to friendly countries that have either natural gas for conversion into hydrogen or large open spaces and ample sunlight to capture solar energy as green H2.
For a country like Australia, which has both vast gas resources, and a large and sparsely populated landscape, this suggests a natural fit. But Japan’s long-standing ally and one of its top energy suppliers is facing increasing competition, not least due to recent tensions over LNG exports. Countries like Canada, Indonesia and possibly India have ample resources in both fossil and clean fuels, and are keen to tap into the lucrative opportunities that come with the energy transition of the world’s No. 3 economy.
For now, Australia has the edge. But what are the projects that hope to carry Japan- Australia ties into the net zero age?