ENEOS, Idemitsu, Hokkaido Electric eye Japan's largest green hydrogen supply chain by 2030

Japan's ENEOS, Idemitsu Kosan and Hokkaido Electric have agreed to consider developing what will be the country's largest domestic green hydrogen supply chain in Hokkaido in the north by around 2030, the companies said Feb. 20.

Under a memorandum of understanding signed Feb. 20, ENEOS, Idemitsu Kosan and Hokkaido Electric have agreed to study developing a more than 10,000 mt/year green hydrogen supply chain based on an over 100 MW water electrolyzer in the western Tomakomai area, the companies said.

The companies are looking at producing green hydrogen from offshore wind power and supplying it to Idemitsu Kosan's 150,000 b/d Hokkaido refinery as well as to regional plants in the Tomakomai industrial complex.

"We are considering making an FID (final investment decision) in around 2025," Satoru Otatsume, ENEOS' deputy general manager of the hydrogen business department told an online press briefing. "With the 2025 FID in mind, we expect to enter the FEED (front-end engineering design) phase in around mid-2024."

The pursuit of developing green hydrogen in Hokkaido comes as the northern Japanese island has been seen as a key prospective area with rich availability of renewable energy and prospects of surplus renewables supply over local demand amid expanding projects.

The western Tomakomai area has been selected because of its estimated hydrogen demand of about 70,000 mt/year for use at plants, power generation and heating.

Idemitsu, for example, is considering using a part of the produced green hydrogen for e-fuel production "as among priorities" at its Hokkaido refinery in Tomakomai city, said Nobuyoshi Hojo, Idemitsu's deputy general manager of the Hokkaido refinery and project leader at the carbon neutral transformation strategy headquarters.

Development in phases
The companies expect their prospective project to be producing and supplying green hydrogen in the long run but its initial use of renewables could be partial, said Takayuki Tomita, Hokkaido Electric's manager of hydrogen business group in the general energy business department.

"We might not be able to reach 100% green in the initial phase, but we will be working toward that in anticipation of having abundant surplus electricity and renewable energy in the future," Tomita said, adding that its ratio of green hydrogen will increase around mid-2030 as a result of accelerating offshore wind power developments.

While noting this project to be about 20 years long, it is expected to be using grid power supply in the initial phase, including from the Tomari nuclear power plant, renewables and thermal power, as well as considering using carbon capture and carbon credits initially, Tomita said.

"We are basically considering supports from the cost for difference for the hydrogen supply," ENEOS' Otatsume said.

The Japanese cabinet approved Feb. 13 two sets of bills to help support the use of low carbon hydrogen and carbon capture and storage business developments in the country, with an eye on introducing the cost-for-difference framework for low carbon hydrogen use in the summer of 2024 upon approval in the Diet.

Japan set in June 2023 a goal of using 12 million mt/year of hydrogen by 2040 as part of amendments to the national hydrogen strategy approved, under which the country also sets new carbon intensity targets.

ENEOS Holdings has mapped out its action plan to cut its carbon intensity in its energy segment in phases from such steps as boosting its supply of CO2-free hydrogen, sustainable aviation fuel and renewable energy as well as providing CCS.

In its mid-term business plan released in November 2022, Idemitsu also said it was considering hydrogen production from renewables, carbon capture, utilization and storage and e-fuel in Hokkaido for liquid fuel demand in the cold area.