Tokyo Gas, Japan’s biggest gas utility, is working towards low-cost production of green hydrogen as part of efforts to manufacture synthetic methane that will help the country meet its climate goals.

The Tokyo-listed company is looking to synthesise methane from hydrogen and CO₂ using methanation technology. The hydrogen will be produced using renewables while CO₂ will be sourced from power plants and factories or via direct air capture, the company says.

The Japanese government is positioning methanation as a growth industry and one of the key ways for Japan to achieve its stated target of net-zero emissions by 2050. The technology is attractive for Japan—the world’s sixth-largest gas market by demand—because it can make use of the country’s extensive existing gas infrastructure, which includes dozens of LNG import terminals, LNG carriers and city gas facilities.

At a briefing at the end of February, Tokyo Gas elaborated on some of the challenges of developing methanation. Securing low-cost green hydrogen is the priority, and the company is working with Kyoto-based technology company Screen Holdings to develop an inexpensive cell stack designed to reduce costs.

An electrolyser accounts for roughly the same share of green hydrogen production equipment costs as renewable energy generation assets, according to Tokyo Gas. Material and manufacturing each make up half of the cost of a cell stack, while the cell stack itself accounts for 50-60pc of electrolysis equipment costs. Tokyo Gas aims to lower the stack’s material and manufacturing costs by at least half.

90pc – Targeted share of synthetic methane in Japan’s gas supply in 2050

The utility is confident it will be able to do so as its technologies for selecting materials and evaluating performance and durability—developed through work on residential fuel cells—can be used to cut back on the use of precious metals in electrodes. Screen Holdings, meanwhile, possesses the development knowhow for making parts thinner and for continuous production at high speeds.

On top of equipment costs, another issue is procuring CO₂ as a feedstock as it will be necessary to build a supply chain that includes the infrastructure for CO₂ transportation.

Methanation location

An additional consideration is finding suitable locations for methanation, which requires plentiful low-cost renewable energy for producing green hydrogen and CO₂, as well as shipping resources for transporting the methane.

Tokyo Gas says it is in the process of selecting a suitable location that will give it access to all three. Last November, the company agreed with Japanese trading firm Sumitomo and Malaysian NOC Petronas to explore the feasibility of establishing a supply chain of carbon-neutral synthetic methane from Malaysia to Japan. It has a similar arrangement with Japanese multinational Mitsubishi to look into potential synthetic methane supply chains in North America, the Middle East, Australia and Asia.

Japan’s Agency for Natural Resources and Energy said last month that it expects carbon-neutral synthetic methane to comprise 1pc of domestic gas supply by 2030, rising to 90pc by the net-zero deadline year of 2050. It estimates a complete shift to synthetic methane for all domestic city gas consumption would reduce Japan’s CO₂ emissions by around 10pc.

The plan is to start shipments of carbon-neutral synthetic methane from overseas—where hydrogen can be produced more cheaply than in Japan—in the late 2020s, before introducing it nationwide in the 2030s. Domestic commercialisation of the technology amid reduced costs is expected in the 2040s, and the target is to supply 25mn t of synthetic methane by 2050.

---

Author: Shi Weijun