OSAKA -- Two companies will partner with the city of Kobe to establish a hydrogen import terminal to debut in fiscal 2020, with the project aimed at expanding the use of the environmentally friendly fuel in Japan.
Energy supplier Iwatani and Kawasaki Heavy Industries, an industrial machinery maker, will build the roughly one-hectare hub on city-owned land inside the island housing Kobe Airport, with total costs estimated to exceed 10 billion yen ($83.5 million).
Liquefied hydrogen will be offloaded from specialized vessels, which transport the fuel at high pressure and low temperatures. The hydrogen will be stored at the terminal and later delivered to locations via tanker trucks. The business is to handle tens of millions of cubic meters of the fuel. Similar operations are expected to pop up in other places, with this one serving as a prototype.
Kawasaki Heavy will build the tanker ships, offloading facilities and storage tanks while Iwatani will install the equipment used to load the hydrogen into transport vehicles. Both companies are leaders in developing technology related to the sector. Some construction costs will be covered by grants from the New Energy and Industrial Technology Development Organization.
Hydrogen, which is used to generate electricity and to power fuel-cell cars, is currently obtained as a side product from steel mills and other places. But supplies are projected to fall short in the 2020s amid growing demand. Australia, which is rich in brown coal, a source for hydrogen, is the leading potential source. Electric Power Development, a utility known as J-Power, will assist in producing the hydrogen through technology used for coal-fired electricity generation.
After the March 2011 disaster at the Fukushima Daiichi nuclear plant, Japanese companies found themselves at a disadvantage in negotiating import prices for liquefied natural gas, another fuel known for its low carbon emissions. Japan's economic ministry seeks full-fledged introduction of hydrogen by 2030 as a way to diversify energy sources.