Panasonic makes Japanese hydrogen economy closer to reach

The electronics company is planning its first green H2 plant and will sell the system globally.

Panasonic Corp. (TYO stock symbol 6752) is transforming a fuel cell factory into what could be a turning point toward Japan’s hydrogen economy plans, by likely becoming the first green H2 based plant.

The H2-based factory is located in central Japan’s Kusatu and would be fully renewable energy powered.

Japanese Prime Minister Yoshihide Suga pledged last October to create a carbon-neutral country, with a leaning toward a hydrogen economy. This has been a “tailwind” for the H2 factory project at Panasonic, said Norihiko Kawamura, the company’s hydrogen business promotion office manager. The company plans to commercialize the system by the 2023 fiscal year.

Japan has been among the leaders in using H2 as a renewable energy source that can be applied as a fossil fuel alternative. The country was already making heavy investments into the gas in the 1970s, when its reliance on petroleum was shaken due to a number of oil shocks. In the meantime, the Japanese interest in H2 slipped. Even though the investments into this fuel have been rising, the cost of its clean production remain prohibitively high. This has made it a difficult sell in order to implement the necessary technologies and infrastructure for widespread adoption.

That said, cost is no longer the only factor required for consideration in a hydrogen economy.

“What’s different today is that cost isn’t the only factor at play,” said Kawamura as quoted in a Bloomberg report. International giants such as Apple Inc., a major Panasonic customer, have made aggressive carbon pledges and targets. Apple, for instance, is seeking to achieve a carbon neutral supply chain by 2030. As a result, businesses like Panasonic must ensure their operations suit the decarbonization requirements of their customers.

According to the report, Panasonic experienced a massive spike in inquiries regarding its factory solution following Suga’s announcement.

Moreover, Panasonic was not alone. Suga’s October pledge caused a whirlwind of action among companies in Japan seeking to ensure they aligned with the hydrogen economy. They are aiming to comply with emissions limits and cash in on the technology they develop for decarbonization.