Various agreements have been signed between Japan and Gulf countries during Japan’s Prime Minister Fumio Kishida’s recent visit to the Middle East. These will pave the way for critical regional countries to become hydrogen partners.
Kishida was accompanied by representatives from 40 Japanese companies, indicating its commitment towards promoting cooperation in green and renewable energy. Currently, due to low solar energy production costs, Middle east region is seen as a lucrative location to form a green energy production hub.
It may be noted that at least seven agreements, many memorandums of understanding were signed between Japanese companies and Middle Eastern firms during the trip.
One of the key agreements was the Japan-Saudi Lighthouse Initiative for Clean Energy Cooperation. This recognises their net zero and clean energy ambitions, and both the nations would closely collaborate to advance a balanced green transformation that includes developing clean energy projects related to areas such as hydrogen, ammonia and carbon recycling.
Moreover, the initiative will support the Kingdom’s ongoing endeavours to become a hub of clean energy, mineral resources, and energy component supply chains.
The Kingdom has a goal to decarbonise and achieve net zero by the year 2060, while Japan plans to achieve the same goal of achieving net zero by 2050.
An agreement between JERA and ADNOC to study cooperation in clean hydrogen and ammonia and a pact between Sumitomo Corp and Sharjah National Oil to study the feasibility of a carbon capture and storage project in the UAE have also been signed.
Other agreements focused on joint studies for low-carbon metal production and future supply chain options.
“Although MOUs are obviously of lesser significance than supply contracts, touching base for future cooperation and sending a message of long-term interest in the imports of hydrogen and derivatives from the Gulf countries is important,” said Aliaksei Patonia, research fellow at the Oxford Institute for Energy Studies. He noted, “Japan has expertise in electrolysis for hydrogen made from renewable sources and pyrolysis for hydrogen production from methane.”
Further, Japan is betting big on hydrogen and has pledged to invest over US$100 billion in the next 15 years to boost supply – secured both at home and abroad. It is estimated that it will need 3 million metric tons a year by 2030, up from 2 million currently and predicts that to jump to 12 million metric tons by 2040. It plans to use the fuel to decarbonise industries, from auto manufacturing to power plants, that currently chiefly run on fossil fuels such as coal, oil and LNG.
As per reports, analysts say that Japan needs to strengthen its Gulf relationships if it wants to compete with China, which occupies the top place as the world’s hydrogen producer and consumer.