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This article is the fifth in a series of six, based on a research by Dr. Venera N. Anderson, “Comparative Analysis of Green and Pink Hydrogen Production in Japan Based on a Partial Circular Economy Approach”. Here, you can read part one, two, three and four.
Japan is currently facing urgent energy and environmental challenges, demanding bold and sustainable solutions. As the world’s fifth-largest carbon emitter, the country must rapidly transition to cleaner energy sources to meet its 2050 carbon neutrality goal. Recognizing hydrogen’s potential, Japan has committed to major investments, including the $400 million Japan Hydrogen Fund and extensive government-backed incentives. However, while hydrogen is often seen as a “clean” energy source, its production and supply chains still carry emissions and environmental trade-offs. Identifying the most reasonable, practical, and economic source of clean hydrogen (green or pink) beyond 2040 is therefore critical. This research examines Japan’s energy and environmental situation, exploring how hydrogen, produced using a partial circular economy approach, could become the future cornerstone of Japan’s energy strategy.
Other criteria
Since the LCOH, developed by Lazard LCOE+ (2024), did not incorporate potential environmental or social externalities, the other criteria of the comparative analysis for green and pink H2 production based on a partial CE approach comprise 1) impact on the environment, 2) safety, and 3) workforce availability.
Impact on environment
Regarding environmental impact indicators, the study briefly assessed 1) GHG emissions of green/pink H2 hubs and lifecycle emissions from electricity generation, 2) land use for hubs and related electricity generation, 3) water consumption, and 4) recycling materials. First, regarding the GHG emissions of green/pink H2 hubs and lifecycle emissions from electricity generation, green and pink H2 production did not generate direct GHGs (Fernandez-Arias et al.; Hassan et al., 2024). However, the upstream and downstream emissions from electricity production could influence the lifecycle emissions from water electrolysis (Nnabuife et al., 2023). For example, Figure 17 showed that nuclear energy had the lowest GHG (6 tons) versus renewable sources, such as solar (8-83 tons), depending on technology and location) and wind (11 tons).
Figure 17
The Safest and Cleanest Sources of Energy
Note: What are the safest and cleanest sources of energy? From Our World in Data (Ritchie, 2020).
Second, the land use criterion was crucial in determining the extent of the land needed for the production and storage of green and pink H2 and for electricity generation for space-constrained countries like Japan. Land-use choice could also influence such variables as biodiversity loss, deforestation, soil degradation, and water resource effects (Nnabuife et al., 2023). Building greenfield hubs would negatively affect the land-use criterion in both green and pink H2 hubs. Utilizing brownfield hubs would positively affect this criterion. Regarding green H2, Japan must develop new wind and solar plants, transmission infrastructure, and battery storage (Shiraishi et al., 2023). Regarding pink H2, since nuclear energy has a low land footprint, Japan could restart its existing nuclear reactors and invest in advanced ones with smaller land footprints than wind or solar plants (Willige, 2022). In such circumstances, the land-use criterion for pink H2 would be more positive than one for green H2 production.
Third, water consumption was the third important criterion under the environmental impact. Despite the recognition of green and pink H2 as cleaner energy sources, there were valid concerns regarding their impact on water resources during their production processes. Such an issue was discussed in the “Economic Criteria” sub-section. Water usage was a vital sustainability measure for assessing the production of alternative fuels. For example, when considering a lifecycle analysis, the green H2 (solar PV) average water footprint was about 43 l/kg of H2 in contrast to the water footprint of oil extraction and refining of 133 l/kg of oil (Wood et al., 2022). Thus, foregoing using freshwater towards purified wastewater was not only a sound economic choice but also one beneficial for environmental reasons, especially in the context of a complete CE approach (outside of scope of this study).
Lastly, recycling materials was the last criterion for environmental impact. When any product reaches the end of life, with its materials and components no longer reusable, recycling is necessary in the CE context due to many benefits: substitution of primary raw materials, reducing environmental impacts by lowering energy use and CO2 emissions, reducing dependency on imported materials, avoiding incineration and landfill of metals, improving waste management, and supporting economic activities along the recycling value chain for the materials (CHP, 2024a). Recycling materials also fits well with the study’s methodology, especially with the “recycling” stage of the technical cycle of the CE system diagram of the Ellen MacArthur Foundation (2024) (Figure 1). Recycling titanium and stainless steel through material collection methods, such as within manufacturing capacity to capture waste materials and scrap, and the field population could add an additional value stream from reclamation (Ayers et al., 2021).
However, two main groups of materials present challenges for recycling for green and pink H2 production: CRMs and PFAS materials. First, CRMs, or critical raw materials, are strategically and economically important for the Japanese economy but have a high risk associated with their supply (CRM, 2024). The current recycling rates remained low and needed improvement to meet future projected gigawatt annual capacities for electrolysis. For instance, for platinum group metals, recycling was required to meet the projected capacity demand for electrolyzers before 2050 (Ayers et al., 2021). Second, PFAS (per-and-polyfluoroalkyl substances) were water and soil contaminants with adverse health effects. Unfortunately, clean H2 technologies depended on those without viable alternatives and underdeveloped recyclability procedures (CHP, 2024a).
Recycling materials could also be problematic for electricity generation needed for green and pink H2 production. Recycling materials in renewable energy generation was a problem for green H2 production. For example, wind turbine blades were difficult to recycle since they were made of various materials, such as carbon fiber and glass-reinforced composites (Mishnaevsky, 2021). The recycling industry for solar energy remained in its infancy due to significant technological, economic, and regulatory challenges (Hurdle, 2023). However, recently Japan started to investigate recycling of solar panels (Zenbird, 2024). In comparison, the Japanese nuclear industry pursued a vision of the closed-fuel cycle that gains maximum benefit from imported uranium. These plans had not materialized since the Japanese nuclear reprocessing facility (Rokkasho) faced 27 construction delays. The temporary solution until the facility appears might be an interim nuclear fuel facility in Mutso (for up to 50 years) or dry cask storage at the power plant premises (Pedretti; WNA; Jiji Press, 2024).
Safety
The safety indicator and criterion were also necessary for comparative green and pink H2 production analysis based on the partial CE approach. First, although these types of clean H2 have promising future, the H2 safety concerns must not be overlooked. Although H2 is free of contaminants, it is very combustible. H2 could burn away 10 to 20% of the time compared to other fuels of the same volume. For example, a recent fire at an H2 plant in Leuna, Saxony, prompted a supply crisis (Engelking, 2024). Moreover, the almost invisible and odorless flame of H2 also posed detection and security challenges, which made it especially dangerous in confined spaces. At high concentrations gaseous H2 could also lead to suffocation (NJ, 2016). H2 could also easily diffuse through metal surfaces, especially at high pressures and temperatures, which can lead to pipeline embrittlement and cracking (Reza et al., 2022). Therefore, reliable safety standards and precautions were required in all phases of clean H2 infrastructure, which would raise the overall price of the green and pink H2 hub infrastructure (Nnabuife et al., 2023; Eh et al., 2022).
Moreover, the safety factors could be compared at the electricity generation stage. As shown in Figure 18, renewables and even nuclear have the lowest death rates, even accounting for Chernobyl and Fukushima disasters. The death rates from solar and wind were low but not zero since they accounted for deaths of people in supply chains, such as drownings in offshore wind sites, fires during the installation of turbines or panels, and helicopter collisions with wind turbines (Ritchie, 2020). Since nuclear plants power pink H2, the presence of radioactive materials and waste as well as its disposal of without proper handling would be dangerous to human health and the environment, thus, adding to the safety concerns of the pink H2 hub (IAEA, 2024; Chew et al., 2023). Fortunately, Japan showed continuous commitment to keeping its nuclear industry safe through massive safety investments, especially after the Fukushima disaster (WNA, 2024).
Workforce availability
Workforce availability is the last important indicator and criterion in the green and pink H2 production comparative analysis based on the partial CE approach. Osumi (2024) stated that “policy and planners often zero in on the supply chain bottlenecks. This time, they need to check on the people” (p. 26). IRENA (2024) agreed that a well-skilled workforce was also an essential backbone of the energy transition. Experts believed that the growth in clean H2 and derivatives industries would lead to unparalleled employment opportunities. For example, in Europe, for 1 million euros in revenues, the following direct and indirect jobs would be created: 1) manufacturing of equipment and end-use applications (13 direct and indirect jobs); 2) advanced industries (machinery and equipment, automotive) (10 direct and indirect jobs), and 3) aftermarket services and new business models (15 direct and indirect jobs) (CHP, 2024a). Expanding the clean H2 sector also created job opportunities in Japan (JETRO, 2023).
Despite emerging growth in the H2 sector, these roles would require highly qualified individuals with technical expertise and engineering capabilities. Those core applications and those connected to related electricity generation (renewables and nuclear energy) have relatively small talent pools (CHP, 2024b). Japan experienced similar problems. First, Japan was one of the hardest markets to hire talent for cleaner energy due to the following reasons: 1) language barriers, 2) traditional Japanese values and beliefs, 3) passive job search, and 4) high lifetime employment (Storm4, 2024). Furthermore, the lack of structured university programs to prepare a permanent renewable workforce, especially offshore wind, raised concerns that Japan was ready to build and maintain large-scale renewable projects (Osumi, 2024). Similarly, Japan’s nuclear power revival could be threatened by a lack of skilled workers, for example, in Onagawa prefecture, about 36% of staff had not operated a reactor, while very few women enter the field (Bloomberg, 2024b, NEA, 2023). The next section explains the results of the analysis.
Results
This section states the findings of the multi-criteria comparative analysis of Japanese green and pink H2 production founded on a partial CE approach. The primary criteria for this analysis were grouped into four areas: 1) economic, 2) impact on the environment, 3) safety, and 4) workforce availability. The economic criteria were divided into three categories: 1) selected OPEX, including electricity/heat with associated capacity factors and water consumption; 2) CAPEX for hubs/WWTPs and electrolyzers; and 3) subsidies. Other criteria comprised 1) impact on the environment, 2) safety, and 3) workforce availability (Tables 2 and 3, Appendix).
First, to answer the research question concerning its economic consideration, the study initially attempted to provide a straightforward economic comparison (LCOH) of green and pink H2 production in Japan by reviewing current global and Japanese comparable LCOH figures. However, due to 1) the absence of official Japanese actual costs or public projections for green and pink H2 projects and 2) the difference in methodologies and projected time frames for the green and pink H2's LCOHs, the author chose other proxy criteria for the analysis. Moreover, the chosen criteria seemed reasonable for the comparative analysis based on a partial CE approach, especially since the methodologies for the global and Japanese comparable LCOHs did not account for CE elements in their calculations.
First, in the multi-criteria comparative analysis, regarding “Economic Indicators,” projecting Japan’s electricity/heat costs with associated capacity factors in the future (2040-beyond) was impossible with all the technological, domestic, and global changes that might happen between December 2024 and the future. Thus, the analysis based its simplified comparison of potential future electricity costs only on the publicly available projections from the Japanese government. In so doing, the economic criterion, “OPEX,” related to the cost of electricity/heat with associated capacity factors showed that, on average, the projected 2030 costs of electricity from solar and onshore wind combined were relatively close to 2030 projected costs of nuclear energy. Only the 2030 projected cost of electricity from offshore wind was substantially higher than the projected 2030 cost. The 2030 capacity factors for nuclear energy (70%) were much higher than those of renewable energy sources, namely, solar power for business (17.2%), onshore wind (25.4%), and offshore wind (33.23%). Moreover, nuclear energy also could generate significant amounts of heat as a by-product of the nuclear fission process. Lastly, the OPEX analysis related to electricity/heat costs with associated capacity factors revealed the three stages of the technical cycle of the Ellen MacArthur Foundation’s CE system diagram (Figure 1), which could be associated with the pink H2 hub production, namely, 1) maintain/prolong, 2) reuse (NPP and waste heat), and 3) refurbish.
Moreover, comparing other economic criteria revealed the similarity in the ingredients and stages of the technical cycle of Ellen MacArthur Foundation’s CE system diagram (Figure 1, Table 2 and 3, Appendix). For instance, the other OPEX criterion, related to wastewater usage in the green and pink H2 production, could be identified with the reuse stage of the technical cycle of the partial CE approach. The CAPEX criterion, associated with the costs for green and pink H2 hubs and related WWTPs, revealed the technical cycle’s stages of 1) share (same infrastructure), 2) reuse (brownfields), 3) remanufacturing (upgrade of the existing WWPPs to produce purified water for green and pink H2 production). The CAPEX criterion, associated with the cost of electrolyzers, could be tied to the recycling stage. Lastly, the subsidy criterion did not have a connection to the technical cycle of the CE system model by the Ellen MacArthur Foundation.
The comparison of "Other Criteria" provided additional areas for comparison for green and pink H2 production in Japan based on a partial CE approach. It is important to note that the technical cycle of the Ellen MacArthur Foundation's CE system diagram (Figure 1) could only be possibly applied to the "Water consumption" and the "Recycling Materials" ingredients of the "Impact on Environment" criterion, as "reuse" and "reuse/recycle," respectively.
Furthermore, regarding the "Impact on the Environment" indicator, under the “GHG Emissions” criterion, neither green H2 nor pink H2 had direct emissions during production. However, on a lifecycle basis, renewable energy had more direct emissions from electricity production than nuclear energy. Regarding the "Land Use" criterion related to the construction of hubs and electricity-generating infrastructure, the restart of existing NPPs and construction of smaller nuclear reactors could have a smaller land footprint than renewable energy with the necessity of growing additional infrastructure. Related to "Water Consumption," both types of clean H2 production positively impacted the environment through wastewater reuse. Regarding "Recycling Materials," both renewable energy and nuclear energy had challenges in recycling and reuse.
Moreover, regarding "Safety," both green and pink H2 production had similar safety issues related to H2. Renewables and nuclear energy production were also relatively safe. The main challenge related to nuclear energy was handling its radioactive materials and waste. Lastly, Japan's green and pink H2 production had similar challenges regarding the “Workforce Availability” criterion for the clean H2, renewables, and nuclear energy sectors. In summary, the key findings of the multi-criteria comparative analysis demonstrated the following:
- There were no reliable official estimates from the public and private sectors about costs for green and pink H2 production in Japan, especially associated with the partial CE approach. Due to the differences in methodologies and time frames, applying comparable global figures to estimate the Japanese future green and pink H2 production costs (2040-beyond) was difficult.
- The economic criterion, "OPEX," related to the cost of electricity/heat with associated capacity factors, showed the main area for meaningful comparison between Japanese green and pink H2 production based on the partial CE approach, related to the technical cycle of the Ellen MacArthur Foundation's CE system model. The analysis also reaffirmed the importance of the CAPEX of electricity cost, which could significantly affect the LCOH of Japan’s green and pink H2 productions. Based on the comparison related to the "OPEX" economic criterion, pink H2 was a more reasonable, practical, and economic Japan’s future (2040-beyond) energy source.
- Other areas for comparison in the “Other Criteria” between the two types of clean H2 production were related to the indicators 1) "Impact on the Environment" indicator ("GHG Emissions," and "Land Use" criterions) and 2) "Safety." The comparison based on "GHG Emissions" and "Land Use" criteria showed that pink H2 was a better energy source than green H2, based on the analysis’ parameters. However, the result was the opposite based on the comparison of "Safety," primarily regarding the potential issues related to nuclear energy’s handling of radioactive materials and waste. On balance, throughout the comparison in the entire spectrum of the “Other Criteria,” pink H2 still emerged as a more reasonable and practical future (2040-beyond) energy source for Japan.
- Other criteria in the comparative analysis had similar ingredients, which would apply to both green and pink H2 productions in Japan based on the partial CE approach, in effect, canceling such considerations out for the sake of the comparative analysis.
Japan is a unique island nation with a remarkable track record of confronting and transcending adversity. Today, the country faces significant energy and environmental challenges, yet it also possesses the innovation, resilience, and ambition to rise to the occasion. By building a circular economy around hydrogen, Japan can ensure a sustainable and resilient energy future. Pink hydrogen, produced based on a partial circular economy approach, offers the most reasonable, practical, and economic clean hydrogen solution for Japan beyond 2040. While the clean hydrogen sector is still navigating its path, the future lies in focusing capital, talent, and time on practical, sustainable solutions that match Japan’s unique energy and environmental context. Japan’s hydrogen economy will thrive if it emphasizes precision over hype.
For further details, you can find the list of references and appendix here.
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