Begin at the beginning (II/V): nexus-integrated policies for clean hydrogen production and integration into high-priority heavy industry sectors in Japan

This article is part two of a five-part series on clean hydrogen in heavy industry sectors in Japan. You can find part one here, part three here, part four here, and part five here.

Section 2. Methodology

The analysis in this research study builds upon two qualitative concepts to present a strategy for integrating clean H2 in selected heavy industry applications in Japan. First, the study uses Michael Liebreich's (2023a) model of "The Clean Hydrogen Ladder, Version 5.0" (Appendix, Figure 3) to identify the best uses for clean H2 deployment in the Japanese economy. According to Liebreich (2023), this model represents his effort to combine all the available information and factors, which can drive H2 uptake across all economic sectors worldwide. This model is designed to show the likelihood that any proposed use cases will substantially use H2 (or its derivatives) in a decade, approximately by 2035. It considers safety, convenience, co-benefits, externalities, human behavior, geopolitics, thermodynamics, chemistry, physics, economics, and other sciences. The model consists of multiple rows, such as 1) A – no real alternative (although use cases might grow); 2) B – highly likely (decent market share); 3) C – likely (some market share); 4) D - possible (small market share); 5) E – possible (niche market share); 6) F – possible in some geographies (niche market share), and 7) G – no market share, "The Row of Doom." Liebreich (2023) contends that since clean H2 supply would be limited for decades, the world should focus its money and efforts on the use cases on the top rows of the Clean H2 Ladder.

Second, the paper's methodology is informed by the author's previously developed concept of "nexus-integrated policies" for Japan (Anderson, 2023). Figure 4 (Appendix) describes the simplified outline of these policy outcomes. Bloomberg (2023) believes that Japan may not stay on course to meet its 2030 greenhouse gas emissions (GHG) reduction target or its 2050 carbon neutrality goal. As mentioned earlier, Japan faces challenges in energy security, reliability, and resilience. Simultaneously, the country must confront multiple environmental security, reliability, and resilience issues. Despite the complexity of the task, the author believes that cross-sectoral policies might improve Japanese environmental and energy situations. Using the Stockholm Environment Institute (SEI) (Hoff, 2011) nexus framework (water, food, and energy security) in concert with the author's additional proposed sectoral actions for energy and environmental reliability and resilience, as well as for environmental security, the author developed a concept of nexus-integrated policies for Japan. Since "water, food, and energy form a nexus at the heart of sustainable development" (UN Water, 2023), the nexus approach is paramount for nexus-integrated policies. These policies are built on the SEI's framework principles: 1) environment (investing in sustaining ecosystem services), 2) economy (creating more with less), and 3) society (acceleration of integration and better access of the poorest). The framework considers climate change, population growth, and urbanization as combined pressures on ecosystems and limited resources. Finance, innovation, and governance are also essential for the success of these nexus-integrated policies (Hoff, 2011).

Furthermore, the nexus-integrated policies propose additional policy recommendations, namely, 1) understanding that the most viable options to strengthen energy situation require longer timeframes and may not be same actions to solve environmental issues, 2) selecting cleaner energy options for the energy transition by assessing their lifecycle emissions and supply chains, 3) creating a truly circular economy – “system within systems nested in systems and then linked to other systems and a recurring circle of resources and products” (Sullivan, 2022) - for solving environmental and energy challenges, and 4) guaranteeing the just and orderly energy transition, while accounting for different net externalities and tradeoffs (Anderson, 2023). There are two main limitations of the nexus-integrated policies. First, these policies do not incorporate the political uncertainty connected to the policies' implementation. Second, some proposed actions can overlap and may not fit into the time categories entirely or uniquely. Regardless of the shortcomings, no studies in the public domain present nexus-integrated policies for Japan while considering various energy and environmental challenges. The next section describes the role of heavy industry in Japan's hydrogen strategy. 

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