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Japan Business Report 2018

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Discovery Reports

Hydrogen vehicles benefit from joint venture

Alliance between car firms and gas and energy companies will help to alleviate shortage of refuelling infrastructure

PUBLISHED : Wednesday, 02 May, 2018, 4:04pm
UPDATED : Wednesday, 02 May, 2018, 4:04pm

Japan’s car manufacturers have announced plans to work with energy companies to expand the national network of hydrogen refuelling stations, a move designed to put them in the driving seat for the development of future generations of vehicles.

Global competition is still growing and Toyota, Nissan and Honda need to keep on their toes if their products are to retain their global edge. The three firms formed a joint venture in March named Japan H2 Mobility with a consortium of gas and energy companies, including Air Liquide of France, to build 80 new hydrogen stations over the next four years, complementing the 101 fuelling facilities in place.

The shortage of refuelling infrastructure has been identified as the prime reason environment-friendly hydrogen vehicles do not enjoy greater popularity on Japan’s roads, and the government has thrown its support behind the initiative to assist the domestic fuel industry to stay ahead of its competition as well as to improve Japan’s energy security.

Tokyo is acutely aware that virtually all its fuel supplies traditionally come from the Middle East and need to complete a long journey by sea – and choppy geopolitical waters – before arriving in Japan.

“We see hydrogen as a promising alternative fuel because it can be produced using primary energy sources – or even sewage sludge – and can be generated from water by using solar or wind power,” says Akiko Kita, a spokeswoman for Toyota Motor Corp.

“Once compressed, it has a higher energy density than batteries presently being used in vehicles and is easier to both store and transport. In addition to its potential as a fuel for homes and automotive use, hydrogen can be used in applications such as large-scale power generation.

“Fuel cell vehicles have a number of other pluses, including contributing to the diversification of automobile fuels, they emit no CO2 or environmentally harmful substances during operation and offer the convenience of conventional gasoline-powered cars because they can be charged in around three minutes,” she adds.

While Toyota has been working on fuel-cell vehicles since 1992 and began leasing the FCHV fuel cell SUV in 2002, the problem, she admitted, has been that drivers have been reluctant to buy a vehicle powered by a fuel that is not widely available at refuelling stations. There has been a reluctance to invest heavily in the infrastructure because hydrogen has not yet taken off as a fuel.

“Public-private partnerships are indispensable to hydrogen becoming more widely accepted as a fuel for vehicles,” Kita says. “We have to try to reduce the cost of the vehicle itself and it is important to enable customers to stably purchase hydrogen at a reasonable price.”

Toyota has also been involved in the Hydrogen Council, the first global initiative to promote the role of hydrogen technologies as the world makes the transition away from environmentally damaging fossil fuels, she added.

There are around 2,300 fuel cell vehicles on Japan’s roads, while the government is hoping to use the 2020 Tokyo Olympics as a showcase for cutting-edge domestic industries, including hydrogen powered cars. It is possible that as many as 25,000 fuel cell vehicles will be deployed by 2020, although that figure is significantly behind the 160,000 electric vehiclesin use.

While EVs have the lead right now, the industry is confident there is room for both, with hydrogen vehicles perhaps preferred for longer journeys and bigger loads, while EVs designed for shorter, urban journeys.

The network of refuelling stations is the first step on that journey, believes Kita. “Hydrogen stations will not be profitable in the short term, but we need a long-term view until hydrogen is widely used as a fuel for automobiles,” she says. “It took three generations for the Prius to become popular. We think the usage of hydrogen will grow gradually.”