Japan’s hydrogen economy moves up the gears as refeuling stations establish a network

Japan is gearing up to launch fuel cell vehicles as the next-generation of environmentally safer cars.

Oil distributors have started to establish hydrogen station networks, while the government is set to provide financial assistance and is considering deregulation to make it easier to set up the fuel supply networks.

Fuel cell vehicles are powered by electricity generated through chemical reactions of hydrogen and oxygen. The only thing they emit from the reactions is water.

Electric vehicles need about half an hour to fully charge but can only travel about 200 km. A fuel cell vehicle, by contrast, only needs three minutes to refuel with 5 kg of hydrogen that allow it to travel more than 500 km.

It’s possible that fuel cell vehicles might replace electric vehicles, Toyota Motor Corp. Vice Chairman Takeshi Uchiyamada says. Toyota and Honda Motor Co. plan to release mass-market fuel cell vehicles in 2015, and Nissan Motor Co. will follow suit in 2017.

Competition is heating up for the development of lower-cost models. “Prices of below ¥10 million have now come into sight,” a Toyota official said.

By 2015, 13 companies including automakers and oil distributors aim to establish a total of 100 hydrogen supply bases, mainly in major cities.

JX Nippon Oil & Energy Corp., one of the 13 firms, installed its first hydrogen supply equipment at a gas station in the city of Ebina, Kanagawa Prefecture, in April. The firm aims to set up such equipment at 40 places.

Gas trader Iwatani Corp. also plans to establish hydrogen supply stations at 20 locations.

About ¥500 million to ¥600 million is necessary to establish one hydrogen station, about six times the costs of an ordinary gas station. In fiscal 2013, the Agency for Natural Resources and Energy started a subsidy program to cover half of the construction costs for each station.

The government’s Regulatory Reform Council, chaired by Motoyuki Oka, adviser at major trader Sumitomo Corp., has started discussions on deregulation measures, such as a hike in the limit on the amount of hydrogen that can be stored at supply stations.