Japan’s automakers and energy firms may team on hydrogen stations

Toyota Motor, JX Nippon Oil & Energy and other Japanese automakers and energy companies look to form a joint venture to establish hydrogen filling stations for fuel cell vehicles nationwide.

Energy companies have tried to do this on their own but have fallen far short of a government goal.

Details of the proposed venture will be discussed by a Ministry of Economy, Trade and Industry council on fuel cells, whose members include Toyota, JX Holdings unit JX Nippon Oil, Honda Motor, Nissan Motor, liquefied petroleum gas supplier Iwatani and Tokyo Gas.

The members will seek support from manufacturers of fueling station equipment such as hydrogen compressors. Investments in the venture, which could be established in fiscal 2017, may exceed 10 billion yen ($90.6 million).

The fueling stations opened by the venture would be run by the partner energy companies. The government would provide subsidies rather than direct investment, but these subsidies would be more generous than those for individual companies’ efforts to build fuel stations.

Fuel cell vehicles have been hailed as the ultimate in environmentally sound automobiles, powered by a chemical reaction between hydrogen and oxygen that produces only water as exhaust.

Toyota released the world’s first mass-market fuel cell car in 2014. Honda rolled out a model in March. While METI aims to have 40,000 fuel cell vehicles on the road by 2020, only about 600 have been sold in Japan so far.

A lack of fueling stations has hindered their proliferation. The ministry had set a goal of opening 100 stations by fiscal 2015, but JX Nippon Oil, Iwatani and others have debuted only about 80 thus far. Most are in Tokyo, Nagoya and other major cities. Many of Japan’s 47 prefectures have none.

With startup costs running to 400 million yen and yearly operating costs of 40 million yen to 50 million yen per location, “we can’t commit to building in areas with little demand,” one station operator said.

The proposed joint venture aims to accelerate the creation of fueling station networks by sharing the financial burden among some of the country’s biggest companies. Steps such as using automakers’ regional sales plans to help determine where to locate stations and combining materials procurement could reduce costs.

The ministry aims to have 320 fueling stations established by fiscal 2025, with stations able to cover their construction and operating costs with hydrogen sales alone sometime in the 2020s.

Toyota, Nissan, Honda and others formed a joint venture in 2014 to promote charging stations for electric cars. That venture has provided financial assistance for high-powered chargers at supermarkets, chain restaurants and elsewhere. Japan now has more than 20,000 such chargers and over 80,000 electric vehicles on the road.

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