Tokyo, Japan – September 2024
TotalEnergies has become the first and only non-Japanese investor in the ground-breaking “Japan Hydrogen Fund”. The fund was launched with more than $400 million in its initial phase to help accelerate the development and commercialization of a low-carbon hydrogen value chain within Japan and elsewhere.
Notable among them are Toyota Motor Corporation and Sumitomo Mitsui Banking Corporation, alongside MUFG Bank, which back this fund. It reflects an industry step towards minimizing climate change by bolstering hydrogen as a clean source of energy. Advantage Partners, one of Japan’s leading private equity firms, is managing the project, with support also coming from the Japan Hydrogen Association, a large grouping with over 440 members that aims to support sustainable development across all the industrial landscapes in the country.
Role in TotalEnergies and Global Ambitions
Asia President Helle Kristoffersen is a member of the Executive Committee at TotalEnergies. She says the company is thrilled by the project and highlights, “TotalEnergies is pleased to support an ambitious fund dedicated to developing the hydrogen value chain in Japan and globally, as the only non-Japanese investor at this stage. We are convinced that only a collective effort will enable low-carbon hydrogen solutions to emerge on an industrial scale.”.
This alliance marks an important step for TotalEnergies in its greater ambition to become a major player in the energy transition of the world. Hydrogen is taking on a more central role in the world’s decarbonization efforts, which include supplying clean, versatile energy across those sectors proving difficult to electrify- heavy industry and transportation.
Kristoffersen explained that, from the company’s long-term goals, the Japan Hydrogen Fund perfectly fits the evolving hydrogen ecosystem already forming in Japan. The move is also a natural extension of the company’s previous investments in the hydrogen sector. In 2021, TotalEnergies launched the Hy24 clean hydrogen infrastructure fund in collaboration with Air Liquide and VINCI, reasserting its commitment to clean energy development.
Japan’s Quest for Hydrogen: The Future Clean Source of Energy
Hydrogen has been considered as forming the basis of Japan’s future energy policy by both the Japanese government and industry leaders. The country is resource-poor, having long since lost its reliance on imported fossil fuels, but decarbonizing its economy encouraged investments in renewable energy and in hydrogen technology. With the target set for 2050 as carbon-neutrality, hydrogen is going to play an important role in this ambition.
Founded by the Japan Hydrogen Association (JH2A), which has been actively promoting hydrogen for its use in transportation, industry, and energy storage, this fund will provide support for a strong competitive industry to possibly become an example across the globe with the participation of major players from Toyota and Sumitomo Mitsui.
It is also central to the collaborative nature of this project, according to Kristoffersen. “This initiative aligns with our ambition to be a global player in the energy transition and will also allow us to leverage the dynamism of the hydrogen ecosystem in the Japanese industry,” she said.
A Global Collective Push for Low-Carbon Solutions
The potential started with the fund’s ability to attract $400 million in the first phase of the Japan Hydrogen Fund, but TotalEnergies involvement will see these ambitions not limited just to Japan. Indeed, the developed hydrogen value chain of Japan can be emulated by other countries intent on decarbonizing their industries, given growing global demand for low-carbon technologies.
The hydrogen industry is currently at its nascent stages, yet the global governments and firms are increasingly recognizing its potential. With this investment, TotalEnergies is putting itself at the forefront of a global shift toward cleaner energy systems. The fact that the company stands out as the sole non-Japanese investor also reflects confidence in the leadership that Japan exerts on the development of hydrogen technology.
Deeper ESG Commitment: TotalEnergies
This buttresses TotalEnergies’ much wider commitment to the Environmental, Social, and Governance (ESG) principles. While changing the global energy landscape in this manner, companies such as TotalEnergies are increasingly coming under pressure to try to align their business strategy with sustainability goals.
This is one of the areas TotalEnergies is exploring to reduce carbon emissions and invest in renewable energy sources. For instance, by focusing on developing hydrogen, the company, without a doubt, has made tremendous progress in virtually all these new energies, from solar and wind energy to biofuels and now hydrogen, which will enable the Company to reach net zero by 2050.
Outlook
The Japan Hydrogen Fund is an important step in developing low-carbon hydrogen solutions, backed by some of Japan’s largest corporations and international experience from TotalEnergies, positioning it for industrial-scale adoption.
Such partnerships will be indispensable in pushing innovation and addressing a number of challenges relevant to the scale-up of clean energy development. It will be absolutely critical to the country in pursuing a much more sustainable energy use future, combining the strengths of both Japanese and international stakeholders.
As the hydrogen ecosystem grows, the ramifications of this fund could extend well beyond Japan and set the standard by which low-carbon technologies could be built and scaled globally.