Study on Demand and Supply Potential of Hydrogen Energy in ASEAN and East Asia – Phase 4

Edited by Shigeru KimuraAlloysius Joko PurwantoCitra Endah Nur SetyawatiSetsuo Miyakoshi Study on Demand and Supply Potential of Hydrogen Energy in ASEAN and East Asia–Phase 4 Economic Research Institute for ASEAN and East Asia (ERIA)Sentral Senayan II 6thFloorJalan Asia Afrika No. 8, Gelora Bung KarnoSenayan, Jakarta Pusat 10270Indonesia © Economic Research Institute for ASEAN and East Asia, 2024ERIA Research Project Report FY2024 No. 09Published in July 2024 All rights reserved. No part of this publication may be reproduced, stored in a retrievalsystem, or transmitted in any form by any means electronic or mechanical without priorwritten notice to and permission from ERIA. The findings, interpretations, conclusions, and views expressed in their respectivechapters are entirely those of the author/s and do not reflect the views and policies of theEconomic Research Institute for ASEAN and East Asia, its Governing Board, AcademicAdvisory Council, or the institutions and governments they represent. Any error in contentor citation in the respective chapters is the sole responsibility of the author/s. Materialin this publication may be freely quoted or reprinted with properacknowledgement. Preface Although it combusts like fossil fuels, hydrogen does not emit carbon dioxide. Hydrogenis expected to replace fossil fuels across the industry, transport, residential, commercial,and power sectors. Whilst fossil fuels – coal, oil, and gas – are prevalent, theirconsumption is projected to decrease because of anticipated high large demand forhydrogen until about 2050. Hydrogen is generated through reforming and gasificationtechnologies and electricity, as well as through electricity using electrolysis equipment.Like electricity, hydrogen is classified as secondary energy and not indigenous energysuch as coal, oil, and gas. Some countries have the advantage of domestic hydrogenproduction, whilst others must import it to meet substantial demand. Phase 4 of the study (i) conducted economic and social analyses of the hydrogen supplynetwork aimed at connecting hydrogen-producing and hydrogen-consuming countries inthe East Asia Summit (EAS) region; (ii) assessed the current and future efficiency ofhydrogen production; (iii) analysed the cost of hydrogen transport using liquid hydrogen;(iv) explored optimal solutions for hydrogen transport from production to consumptioncountries in the EAS region; and (v) conducted a dynamic study simulating hydrogentransport between hydrogen supply and demand countries, drawing on the results ofphases 1 and/or 2. Hydrogen is more expensive than existing low-carbon fuels and technologies such asnatural gas and solar photovoltaic systems. However, innovative technology developmentand the scaling up of the hydrogen market size are anticipated, potentially makinghydrogen more affordable by 2040–2050. This report describes the results of the fiveresearch points, aspiring to contribute to widespread adoption of hydrogen in the EASregion. Shigeru Kimura Special Advisor to the President on Energy AffairsEconomic Research Institute for ASEAN and East Asia Acknowledgements This report was developed by a working group consisting of teams from the EconomicResearch Institute for ASEAN and East Asia (ERIA); the Institute of Energy Economics,Japan (IEEJ); and Kawasaki Heavy Industry Corporation; Dr Yanfei Li, ERIA ResearchFellow; and Mr Setsuo Miyakoshi, linear programming and dynamic simulation expert.The IEEJ team oversaw the organisation of the First East Asian Summit (EAS) HydrogenWorkshop, held in Kobe City, Japan. Dr Li assessed the economic and social impact of thehydrogen supply network in the EAS region. Kawasaki studied hydrogen productionefficiency and the transport cost of liquid hydrogen, whilst Mr Miyakoshi conducted anoptimal hydrogen transport and computer simulation to reproduce hydrogen transport inthe EAS region. Special thanks go to the Hydrogen and Fuel-Cell Strategic Office, Agency of NaturalResources and Energy, Ministry of Economic, Trade and Industry, Japan, for its strongsupport for this study. Shigeru Kimura Special Adviser to the President of Energy AffairsEconomic Research Institute for ASEAN and East Asia List ofProject Members Economic Research Institute for ASEAN and East Asia Shigeru Kimura, Special Adviser to the President on Energy AffairsAlloysius Joko Purwanto, Energy Economist, Energy UnitCitra Endah Nur Setyawati, Associate Researcher, Energy UnitYanfei Li, Research Fellow, ERIASetsuo Miyakoshi, Expert on Linear Programming and Dynamic Simulation Study Institute of Energy Economics, Japan Kiminori Maekawa, Manager of International Cooperation GroupTomoko Maruyama, International Cooperation GroupEmiko Usui, International Cooperation Group Kawasaki Heavy Industries Corporation Section 1, Business Development Department, Project Group, Hydrogen Strategy DivisionTetsuya YoshimaHideo ShigekiyoShintaro OnishiAkifumi Kokabu Table of Contents Prefacei