Tokyo’s climate goals rely on a fuel that is falling out of favor

The year is 2050. You wake up in your home in Tokyo and take a nice, hot shower thanks to a hydrogen-fueled boiler. Then, you receive a delivery from a drone powered by a hydrogen fuel cell, before hopping in your car running on the same kind of fuel to drive to Haneda Airport for an overseas trip on a hydrogen-powered aircraft — journeys that no longer need to come with guilt or anxiety over their planet-warming impact, since they no longer produce those nasty carbon dioxide emissions.
That, and much more besides, is the vision outlined in recent years, including at a conference on hydrogen late last month, by the Tokyo Metropolitan Government, which is targeting the “full use” of hydrogen produced using renewable energy “in all fields” by 2050 as part of its decarbonization drive.
Hydrogen is a versatile energy carrier, does not produce CO2 when burned, and in a fuel cell can generate electricity without emitting the planet-warming gas, making it an appealing way to reach net-zero greenhouse gas emissions. That has seen it emerge as a kind of “Swiss Army knife” of decarbonization, with hydrogen being put forward for use in everything from heat to power generation and transportation — as highlighted by Tokyo’s hydrogen vision.
But at the moment, the vast majority of hydrogen is produced using fossil fuels, meaning it is hardly emissions-free — current production results in about the same amount of annual greenhouse gas emissions as the high-polluting aviation and shipping sectors combined. Low-emissions hydrogen, meanwhile, accounted for less than 1% of supply in 2022, according to the International Energy Agency. That, in turn, raises questions about where this scarce resource is best directed.

At the same time, many, if not most, of its Swiss Army knife tools are looking increasingly blunt as reality sets in about hydrogen’s physical constraints and the knock-on economic ramifications, all while competing solutions prove their worth.
“Globally, we’re definitely on a downward trajectory in terms of expectations,” says Martin Tengler, head of hydrogen research at BloombergNEF.
Tokyo is targeting the use of hydrogen — particularly its “green” variant, produced using an electrolyzer powered by renewables — across a wide range of sectors, although the metropolitan government has not set or estimated what percentage of the capital’s energy mix it will comprise by 2050, when Tokyo aims to reach net-zero emissions.
Major areas include heating and power generation, as well as energy storage in order to compensate for the variability of renewables’ output. But transportation looms largest, with Tokyo heavily promoting a switch to hydrogen fuel-cell vehicles (FCVs) for passenger cars, buses and trucks. As of April, the capital had 21 hydrogen refueling stations for such vehicles, including 13 that were bus compatible.
The capital’s hydrogen vision — fronted by the blue, behatted character Suison (a play on the Japanese word for hydrogen, “suiso”), and promoted by the Tokyo Hydrogen Museum, which is outfitted with child-friendly activities, model hydrogen dispensers and a lecture theater — dovetails with Japan’s national strategy.

Tokyo is offering a range of subsidies in support of hydrogen projects — up to ¥1 billion (about $6.6 million) in the support of the construction of pipelines for a refueling station — and about ¥13 billion has been set aside for this in the current budget.
The metropolitan government has its eye on boosting supply as well, using its own land for production and procuring hydrogen made in Yamanashi Prefecture for use at the Tokyo Big Sight exhibition center.
It is also looking further afield to countries, such as Australia, with potentially surplus renewables capacity, which could be directed to the production of green hydrogen and then shipped to Japan. In early 2022, the 116-meter Suiso Frontier, a liquefied hydrogen carrier built by Kawasaki Heavy Industries, completed its first international voyage, traveling to Australia’s Victoria state and returning to Kobe.
In support of these efforts, Tokyo has increased its hydrogen promotion budget to ¥20.3 billion for the fiscal year through March, up from ¥11.4 billion the previous year.
“For the diffusion of hydrogen, there are challenges including the reduction of production costs and the necessity of creating a supply chain. It is also essential to expand demand for hydrogen in a variety of fields as well as promote technological development and mass production,” says Chikako Ikeda, director of the Industry and Energy Policy Division in the Tokyo Metropolitan Government’s Bureau of Industrial and Labor Affairs. “Therefore we aim to boost both the demand and supply of hydrogen.”

Even at the metropolitan government’s own Hydrogen Energy Action Conference on Oct. 22, International Renewable Energy Agency Director-General Francesco La Camera expressed a view on hydrogen’s use that was diametrically opposite to large parts of Tokyo’s plan.
“We understand green hydrogen is available and versatile, but not infinite. This realization has led us to a critical consensus: Green hydrogen should not be dissipated in sectors that can be directly electrified,” he said in a keynote speech.
“The future of hydrogen cars appears limited to a few applications, and the residential heating is better served by heat pumps and direct renewable energy sources,” he added.
The main issue with hydrogen in road transportation relates to efficiency, with significant amounts of energy being lost at each stage of the process of converting electricity to hydrogen and back again — in fact, about 30% is lost through electrolysis right off the bat. That makes hydrogen fundamentally more expensive than the electricity used to produce it, and compares poorly with batteries’ round-trip efficiency of over 80%. Another advantage of battery electric vehicles (BEVs) is that they are charged directly from the grid.

At the same time, the use of batteries — the main competitor of hydrogen fuel cells — in a wide range of areas helps to make them cheaper and better, while there are fewer opportunities to scale-up fuel cell use.
As such, BloombergNEF’s Tengler only sees a possible role for hydrogen in long-distance trucking with heavy loads, while other experts are doubtful it has a future in road transportation at all, pointing to the much higher purchasing and operational costs of hydrogen trucks and the tight margins in the logistics industry.
“Both the capital expense for buying a hydrogen-powered car or bus and the operating expense of using it are higher, and just the laws of physics and economics are going to dictate that is going to stay that way, and most likely get better for batteries and worse for hydrogen over time in relative terms,” Tengler says.
The market has already spoken globally, and arguably has done so even in Japan, where the adoption of BEVs has been much slower. As of the end of March, there were only 1,633 hydrogen fuel-cell vehicles in the capital, Automobile Inspection & Registration Information Association data shows, versus 22,428 EVs. And in 2023, nationwide sales of standard-size passenger BEVs rose 39% to 43,991, according to the Japan Automobile Dealers Association, far exceeding the total for FCVs at 422.
This issue of inefficiency combines with hydrogen’s low energy density per unit volume to complicate, if not outright undermine, other plans for it. In the case of aviation and shipping, more space needed to store hydrogen means less space for passengers and cargo.

This is also an issue when transporting hydrogen by ship, even after it is liquefied — a process that brings its own energy costs. That not only entails significantly larger ships, but because liquefied hydrogen is boiling — despite being kept at minus 253 degrees Celsius, 20 C above absolute zero — it would need to be vented, reliquefied or burned in the engines. That not only results in a further loss of energy, but if it is being released, it is also contributing to climate change because hydrogen is an indirect greenhouse gas — a study last year found that its warming effect is almost 12 times that of CO2.
“Making and shipping liquefied hydrogen wastes energy in such immense quantities that it doesn’t make any sense at all, and here’s the thing: Any country that is dependent on that energy will have a severe economic disadvantage — it cannot possibly afford the energy costs in the long term,” says David Cebon, professor of mechanical engineering at the University of Cambridge and a member of the Hydrogen Science Coalition. “The subsidies required to make that energy affordable to Japanese consumers and to industrial users will cause massive economic drag.”
Still, if Tokyo can get or produce the hydrogen, both Tengler and Cebon see a potential role for it in long-term energy storage, although Cebon advocates that Japan build out undersea electricity cables, like the one planned between Australia and Singapore.
The world is wildly off track from the Paris Agreement goal of limiting warming to 2 C at most — the United Nations Environment Programme says that optimistically we are on course for 2.6 C even if national climate commitments are actually reached. This means that time is of the essence and effective decarbonization methods need to be prioritized.
Japan’s own policies will lead to emissions reductions of 31% to 37% compared with 2013 levels by 2030, against a 46% target, according to Climate Action Tracker.

At the same time as it is promoting hydrogen, the Tokyo Metropolitan Government is also taking steps to boost renewables — part of its goal to have those energy sources provide about 50% of the capital’s power by 2030 — for example through a mandate that new homes and buildings must have rooftop solar panels from April next year. New apartment buildings will have to have EV chargers installed from that point as well, with the government increasing subsidies for them and targeting 60,000 chargers in the capital. This promises to add a significant amount of capacity: The capital had 2,916 charging stations as of the end of September.
However, at a base level of up to ¥425,000, the subsidy for EV purchases lags far behind the up to ¥1.1 million available for FCVs, without accounting for other FCV subsidies.
Rather than build out hydrogen refueling stations that will see very little use, Tengler suggests, “start building out very serious charging infrastructure everywhere for battery electric, because that’s the bottom bottleneck for battery electric.”
“By now, and certainly in a couple years time, battery electric is going to become cheaper than gasoline cars, but people might not want to buy them. Why? Because you don’t have anywhere to charge it.”

While the outlook is dim for many hydrogen uses, there is an ongoing need for it due to its chemical properties, for example in the production of fertilizers, and there the use of low-emission varieties is vital. Annual production of low-emission hydrogen could reach 38 million tons in 2030, according to the IEA, although 69 million tons is needed under its net-zero roadmap.
“There’s absolutely no doubt we need to make green hydrogen for fertilizer, and we need to be doing that now, and governments need to be focusing on that, because that’s one of the key things we have to reduce emissions on,” says Cebon.
Still, weak demand stemming from the poor economics of hydrogen, BloombergNEF says, could see supply come in much lower — optimistically 16 million tons per year by 2030, against announced capacity of 70 million tons.
All of which means that the overall hydrogen picture looks quite different to the one that Tokyo is painting.
Japan’s national hydrogen strategy, which predates the country’s 2050 net-zero goal and has been concerned as much with energy security and economic efficiency as it has decarbonization, targets the realization of a “hydrogen-based society.” But Tengler argues that is the wrong way round.
“A hydrogen society is not necessarily a net-zero society, and it’s most certainly not the most efficient net-zero society,” he says. “If it is a net-zero society, electrification in the vast majority of industries is going to be cheaper than hydrogen.
“If hydrogen is the answer in a particular sector, then great, go and develop it there. But don’t start with the premise that you want a hydrogen society.”