Japan’s hydrogen industry takes a leap forward as Toyota, Sumitomo Mitsui Financial Group, and a consortium of companies collaborate to establish a dedicated fund aimed at boosting the nation’s hydrogen infrastructure. The Japan Hydrogen Association, consisting of around 280 private sector companies, is behind this effort, aiming to have the fund operational by 2024.
A consortium of Japanese companies, including automotive giant Toyota Motor and financial services group Sumitomo Mitsui Financial Group (SMFG), is partnering with a domestic investment firm to create a fund aimed at developing Japan’s hydrogen industry. The Japan Hydrogen Association, comprising around 280 private sector company members, is striving to have the fund operational by 2024. Advantage Partners, a domestic investment firm, will be the primary operator of the fund, marking the country’s first fund dedicated to hydrogen investments.
Japan’s government estimates that achieving carbon neutrality by 2050 will necessitate more than ¥150 trillion (approximately $1 trillion) in public and private investments over the next decade. While Tokyo is expected to contribute around ¥20 trillion ($130bn), the rest will need to come from private sources.
The fund will seek investment, not only from association member companies but also from domestic and International institutional investors, starting with an initial capital pool of tens of billions of yen. It plans to invest in both domestic startups and overseas companies with advanced hydrogen technology, with investments likely to range from hundreds of millions to billions of yen per project.
The fund’s operations are expected to span over ten years, with a focus on concentrated investments during the first five to six years. Future funds are also planned, potentially expanding to hundreds of billions of yen in total scale.
Overseas, investment in the hydrogen sector is already underway. In 2021, French energy company TotalEnergies and industrial gas major Air Liquide initiated the Clean h2 Infra Fund, raising a total of €2 billion.