Japan’s hydrogen gamble: What the world can learn from this high-stakes energy bet

Japan is pursuing a comprehensive 'hydrogen society' by integrating hydrogen into power generation, transportation, and industry, supported by a JPY15 trillion public-private investment plan. However, the strategy faces significant hurdles, including high production and abatement costs, a lack of mature trading infrastructure, and a continued structural vulnerability due to a heavy reliance on imports from countries like Australia and the United States. While Japan leads in technological patents and is piloting the world's first hydrogen trading platform via the Tokyo Commodity Exchange, the document suggests that the strategy lacks systems-level execution and should prioritize hard-to-abate sectors over passenger vehicles to avoid diluting resources.

• Japan's hydrogen strategy has evolved from its 2017 Basic Hydrogen Strategy to a more pragmatic 'Safety + 3E' framework by 2023, which emphasizes safety, energy security, economic efficiency, and environmental sustainability, backed by a JPY15 trillion ($100 billion) public-private investment plan.
• The strategy is driven by extreme energy insecurity, as Japan imported approximately 87% of its energy in 2023, but the shift to hydrogen imports may create new dependencies on exporters rather than solving structural vulnerabilities.
• Economic barriers are significant; even if hydrogen production costs fall to $2/kg, carbon abatement costs in most sectors would remain between $500 and 1,250/tCO2, with storage and transportation adding further expenses.
• There is a critical gap between Japan's import ambitions and the readiness of global supply chains; for instance, Australia's normalized capacity for renewable hydrogen was only 0.004% of its projected output as of October 2024.
• To address the lack of transparent pricing and benchmarks, the Tokyo Commodity Exchange and the Tokyo Metropolitan Government launched a trial in December 2024 to develop the world's first hydrogen trading platform.

APA

Matsuno, T. (2025). Japan’s hydrogen gamble: What the world can learn from this high-stakes energy bet. World Economic Forum. https://www.weforum.org/stories/energy-transition/japan-hydrogen-energy/

Chicago

Matsuno, Tomoki. Japan’s hydrogen gamble: What the world can learn from this high-stakes energy bet. World Economic Forum, 2025. https://www.weforum.org/stories/energy-transition/japan-hydrogen-energy/.

Wikipedia

{{cite report |last1=Matsuno |first1=Tomoki |title=Japan’s hydrogen gamble: What the world can learn from this high-stakes energy bet |publisher=World Economic Forum |date=29 April 2025 |url=https://www.weforum.org/stories/energy-transition/japan-hydrogen-energy/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{matsuno2025japans, author = {Matsuno, Tomoki}, title = {{Japan’s hydrogen gamble: What the world can learn from this high-stakes energy bet}}, institution = {World Economic Forum}, year = {2025}, month = apr, url = {https://www.weforum.org/stories/energy-transition/japan-hydrogen-energy/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }