ADBI Working Paper Series HOW CAN JAPAN HELP CREATE A SUSTAINABLE HYDROGEN SOCIETY IN ASIA? Nandakumar Janardhanan, Mustafa Moinuddin, Eric Zusman, Hajime Takizawa, and Kentaro Tamura No. 1401 July 2023 Asian Development Bank Institute Nandakumar Janardhanan is a Research Manager, Climate and Energy, and South Asia Regional Coordinator, Institute for Global Environmental Strategies (IGES), Japan. Mustafa Moinuddin is Research Manager and Deputy Director, Integrated Sustainability Centre, IGES, Japan. Eric Zusman, is Research Director, Integrated Sustainability Centre, IGES, and Senior Researcher, National Institute for Environmental Studies, Japan. Hajime Takizawa is a Policy Researcher, Climate and Energy, IGES, Japan. Kentaro Tamura is Director, Climate and Energy Area, IGES, Japan. The views expressed in this paper are the views of the author and do not necessarily reflect the views or policies of ADBI, ADB, its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms. Discussion papers are subject to formal revision and correction before they are finalized and considered published. The Working Paper series is a continuation of the formerly named Discussion Paper series; the numbering of the papers continued without interruption or change. ADBI’s working papers reflect initial ideas on a topic and are posted online for discussion. Some working papers may develop into other forms of publication. The Asian Development Bank refers to “China” as the People’s Republic of China. Suggested citation: Janardhanan, N., M. Moinuddin, E. Zusman, H. Takizawa, and K. Tamura. 2023. How Can Japan Help Create a Sustainable Hydrogen Society in Asia? ADBI Working Paper 1401. Tokyo: Asian Development Bank Institute. Available: https://doi.org/10.56506/TLQC2977 Please contact the authors for information about this paper. Email: janardhanan@iges.or.jp Note: This is part of ongoing research at IGES. The paper reflects some of the discussions in earlier research by the authors, focusing on examining the “feasibility of making the hydrogen society a reality in Asia.” The authors are thankful to IGES for the strategic research fund (SRF) provided for conducting hydrogen research. The authors also acknowledge the contribution of Zhen Jin (Research Manager, IGES), who provided insights into hydrogen development in Asia. Asian Development Bank Institute Kasumigaseki Building, 8th Floor 3-2-5 Kasumigaseki, Chiyoda-ku Tokyo 100-6008, Japan Tel: Fax: URL: E-mail: +81-3-3593-5500 +81-3-3593-5571 www.adbi.org info@adbi.org © 2023 Asian Development Bank Institute ADBI Working Paper 1401 N. Janardhanan et al. Abstract Japan has adopted several policies that signal its intent to rely on hydrogen to achieve netzero climate goals. However, many of those same policies are unclear about its support for a transition to green hydrogen. Relying on gray and blue hydrogen without a transition to green hydrogen will harm the climate. It will also result in several other lost international cooperation and local socioeconomic benefits. This paper argues that greater clarity about the transition to green hydrogen will help strengthen the alignment with Japan’s international climate strategy and local revitalization policies. It then proposes a set of recommendations that can clarify its support for transitioning to green hydrogen in national policies as well as international climate and local revitalization strategies. Keywords: hydrogen, co-innovation, net zero, green hydrogen, Japan, Asia JEL Classification: Q42, Q48, Q49 ADBI Working Paper 1401 N. Janardhanan et al. Contents 1. INTRODUCTION ....................................................................................................... 1 2. HYDROGEN’S POTENTIAL IN, AND BARRIERS TO, TRANSITIONING TO A NET-ZERO ECONOMY ................................................................................... 2 Hydrogen’s Potential to Transition to Net Zero........................................................... 2 Barriers to the Development of Hydrogen .................................................................. 3 3. JAPAN’S HYDROGEN POLICIES AND STRATEGIES ............................................. 4 4. THE BENEFITS OF TRANSITIONING TO GREEN HYDROGEN....................