Japanese hydrogen CfDs to cover until wind scales up

Japan’s government plans to introduce subsidies for low-carbon hydrogen to bridge cost gaps with fossil alternatives, starting next year. The subsidies, functioning like Contracts for Difference (CfD), will offer top-up payments above a reference price. To qualify, suppliers must be capable of providing at least 10,000 tons of hydrogen per year from 2030. The subsidy program is designed to cover the cost gap for 15 years, with projects expected to remain operational for an additional ten years beyond subsidy cessation. Hydrogen suppliers, both domestic and international, can apply for subsidies starting in 2024. The initial focus is on supporting hydrogen and derivatives in power generation, potentially creating a supply chain and reducing costs for challenging sectors. This will cover until…