28 January 2020

Australia, Japan hydrogen cooperation agreement offers glimpse of industry potential

This article was written by Louis Chiam, Lachlan Fahey and Anthony Di Gregorio.

The prospects of a global liquified hydrogen market took a step forward this month, with Australia and Japan signing a joint statement on cooperation, as part of a bilateral ministerial dialogue in Melbourne, Australia.

The Joint Statement on Cooperation on Hydrogen and Fuel Cells outlines a shared commitment to deploying hydrogen as a utility-scale source of energy. Critically for industry and prospective investors, it also identifies key areas for development.

What does it cover?

While not legally binding, the joint statement is significant for a number of reasons:

  • As a cooperative project between a large potential supplier of clean liquid hydrogen (Australia) and a major potential market (Japan), it helps to address the ‘chicken and egg’ conundrum of which should come first – the supply or the market.  The answer is both need to be developed, in tandem.
  • It reiterates publicly the commitment by each country to develop its domestic hydrogen industry; with Japan focusing on its ‘Hydrogen Society’ and Australia on its National Hydrogen Strategy, released in November 2019 (available here).
  • The statement explicitly calls out fuel cells as an area of cooperation, highlighting the fact that Japan sees hydrogen as having a role both in stationary energy (eg electricity generation) and the transport sector (as an alternative to electric vehicles).

The shared commitments on market development will be particularly welcome by industry participants.

  • A uniform approach to market regulations is key to developing a truly global market.  Fragmentation on key regulatory issues such as specification, measurement, handling and safety will add significant cost and complexity to the fledgling industry.
  • At the same time, developing a global provenance standard, for example clean hydrogen certificates to identify hydrogen produced from renewable energy or linked to carbon capture and storage, will give buyers greater certainty on source and encourage the development of ‘clean hydrogen’ supplies.

Key takeaways?

  • The sheer diversity of the cooperation areas highlights the scale of the tasks to achieve a global liquid hydrogen market.
  • This agreement provides important impetus for shifting hydrogen from the idea phase to the design phase.

What happens next?

This development should be a reminder that the time to debate and influence policy is now, as the key policy and regulatory bodies openly seek input and have the greatest degree of flexibility.  It is important that the correct design decisions are made early and industry is uniquely placed to provide major inputs to this.

Please contact KWM if you would like more information, or we can provide you with any assistance in this regard.

The text of the joint statement is available here.

The Australian ministerial media release is available here.

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