Adani, Kowa Form JV To Sell Green Hydrogen In Japan, Taiwan, & Hawaii; With The Green Hydrogen Market Projected To Reach USD 8,412 Million By 2030, This Is A Big Win For Adani

Adani Global Pte Ltd, headquartered in Singapore and a wholly owned subsidiary of Adani Enterprises Ltd, has joined forces with Kowa Holdings Asia Pte Ltd, also based in Singapore, to establish a 50-50 joint venture aimed at marketing and selling green ammonia, green hydrogen, and related products in the markets of Japan, Taiwan, and Hawaii.

This strategic partnership represents a significant milestone for Adani, given the flourishing Green Hydrogen Market, which is anticipated to reach a substantial value of USD 8,412 Million by 2030, and Adani Group is on track to begin green hydrogen production by the fiscal year 2027.

In an official regulatory filing, the company stated that this collaborative venture with Kowa for the marketing of green hydrogen is a logical extension of Adani Group’s longstanding history of trade and marketing cooperation with Kowa. 

Just last week, the two entities solidified their partnership through a joint venture focused on the sales and marketing of green ammonia, green hydrogen, and their derivatives.

Adani Big Plans

Adani New Industries Limited (ANIL), the green hydrogen arm of Adani Group, is actively working on comprehensive solutions to produce globally competitive green hydrogen and its sustainable byproducts on a large scale. 

The initial phase of ANIL’s inaugural project, boasting an annual production capacity of 1 million metric tonnes of green hydrogen, is progressing in stages in Gujarat, with production slated to commence by fiscal year 2027.

The company has ambitious expansion plans, and ANIL intends to potentially scale up its green hydrogen production capacity to a remarkable 3 million metric tonnes per annum within the next decade, backed by an investment of approximately $50 billion.

ANIL’s overarching strategy centers on developing an integrated hydrogen ecosystem with three core business segments: manufacturing of supply chain components (including solar polysilicon, ingot, wafer, cell, module, wind turbine generators, electrolyzers, and related items), green hydrogen generation, and the production of downstream derivative products (such as green ammonia, green methanol, sustainable aviation fuel, and more).

Leveraging the collective expertise of Adani Group in renewable equipment manufacturing, large-scale generation projects, grid infrastructure development, and a proven track record in project execution, the company enjoys a significant competitive edge while actively shaping the green hydrogen ecosystem within India and is well-positioned to achieve its goals and offer green molecules and sustainable fuels at globally competitive prices.

Furthermore, the strategic location of Mundra ports, with its proximity to global supply chains, opens up exciting export opportunities for green hydrogen and its derivatives. This advantage is further amplified by the availability of a dedicated jetty for the shipment of cryogenic products, highlighting the company’s commitment to global sustainability efforts.

Green Hydrogen Market Size and Growth Projections

In 2022, the Green Hydrogen Market reached a value of USD 650 million and is poised for substantial growth, with a projected market size of USD 8,412 million by 2030, along with an impressive expansion anticipated to occur at a noteworthy Compound Annual Growth Rate (CAGR) of 59.8% from 2023 to 2030.

Overview of the Global Green Hydrogen Market

The surging demand for clean energy solutions is a driving force behind the escalating prominence of the Green Hydrogen Market. 

As nations worldwide intensify their efforts to curtail greenhouse gas emissions and transition to a low-carbon economy, the appeal of clean energy sources, particularly hydrogen, continues to surge. 

The global market envisions the emergence of a robust Green Hydrogen and its derivatives, such as Green Ammonia, sector totaling approximately 100 million metric tonnes (MMT) by 2030. 

In light of limitations concerning land and renewable resources needed for domestic Green Hydrogen production, many countries are expected to rely on imports. 

Moreover, governments worldwide are offering vital support and subsidies to foster the development and adoption of hydrogen as a clean energy source, thereby propelling market growth.

Japan’s Strategic Embrace of Hydrogen

Japan has embarked on an ambitious hydrogen strategy, becoming a pioneer in recognizing the potential of hydrogen technology for achieving a net-zero future. 

In 2017, Japan took the lead by introducing its Basic Hydrogen Strategy, acknowledging the pivotal role hydrogen can play in its transition to a net-zero economy and this strategy has since inspired several other nations, particularly in the Asia-Pacific region, to formulate their national policies and strategies for hydrogen adoption.

Hydrogen comes in various forms, including grey hydrogen derived from natural gas and commonly employed in chemical production, blue hydrogen, which is a greener alternative produced using carbon capture and storage technologies, and the ultimate goal, green hydrogen. 

Green hydrogen is generated through the electrolysis process, powered exclusively by renewable energy sources, resulting in zero emissions when utilized.

Japan’s pursuit of green hydrogen is motivated by geographical constraints limiting the expansion of renewable energy sources such as solar and wind. The country is exploring diverse applications for green hydrogen, including residential heating, industrial processes, and vehicular fuels.

The International Energy Agency (IEA) has outlined a roadmap targeting the production of 306 million tonnes (MT) of green hydrogen annually by 2050, necessitating a substantial increase in infrastructure investment from $1 billion to $40 billion by 2030. Interestingly, China has taken the lead in green hydrogen production, producing approximately 33 MT per annum compared to Japan’s 2 MT.

Despite Japan’s substantial investments in hydrogen technologies, there are concerns that its heavy reliance on hydrogen may not yield the expected returns, as electric vehicles (EVs) have outperformed fuel cell vehicles (FCVs) on the global stage. 

Nevertheless, Japan continues to focus on FCVs and aims to establish itself as a global leader in this domain, capitalizing on the scalability and resource-efficiency advantages they offer.

Japan’s hydrogen strategy also targets power generation, aiming to account for 1% of the country’s electricity supply using hydrogen by 2030. Hydrogen has also been identified as a crucial sector in Japan’s broader “Green Growth Strategy Through Achieving Carbon Neutrality in 2050,” which seeks to enhance the country’s international competitiveness in hydrogen power generation and fuel cell technology.

Numerous Japanese companies are actively engaging in hydrogen-related endeavors, with developments in hydrogen production, storage, and transportation being noteworthy. Kawasaki Heavy Industries, for instance, is committed to transporting substantial quantities of hydrogen while reducing CO2 emissions through hydrogen energy adoption.

Challenges and Revisions in Japan’s Hydrogen Strategy

Despite these efforts, Japan’s 2017 hydrogen strategy has faced criticism, with some experts deeming it misguided. Concerns include an excessive focus on FCVs, refueling stations, and residential power systems at the expense of integrating green hydrogen into challenging-to-decarbonize industrial sectors like steel production.

Additionally, Japan’s progress in electrolyzer development lags behind that of European and Chinese counterparts, who have already begun commercializing electrolyzers as a business. Moreover, Japan’s strategy opens the door to grey and blue hydrogen, diverting attention from the prioritization of green hydrogen.

In response to these challenges, Japan is set to revise its hydrogen strategy, aiming to clarify the role of hydrogen in decarbonization efforts and establish precise standards for low-carbon and green hydrogen adoption. 

The government intends to double hydrogen production to 12 MT annually by 2040, expand electrolyzer manufacturing capabilities, and attract significant investments, estimated at around US$112.8 billion, from both public and private sources over the next 15 years.

Japan is also contemplating new legislation to bolster industries involved in hydrogen and ammonia production while discouraging environmentally hazardous methods. The forthcoming hydrogen strategy revisions aim for a more nuanced approach, concentrating on economically viable and emissions-reducing applications in challenging sectors like steel, chemicals, and cement.

Japan recognizes the importance of exploring alternative avenues beyond hydrogen, including further advancements in energy efficiency and renewable energy deployment, which could significantly contribute to carbon neutrality by 2050.

The Last Bit, the Green Hydrogen Market, stands as a beacon of hope for a sustainable and environmentally conscious future. 

With its remarkable growth trajectory, projected to reach USD 8,412 million by 2030, Adani’s JV is a significant step for the company in this direction.