Japanese oil company Eneos and trading group Sumitomo Corp. have announced plans to produce green hydrogen in Malaysia and export much of it to Japan. This initiative aims to further diversify the fuel supply for decarbonization.
The two Japanese firms have signed an agreement with SEDC Energy, a subsidiary of the Sarawak Economic Development Corp. set up by the Sarawak state. They will also consider establishing a special-purpose company with the Malaysian partner.
Power from hydroelectric plants will be used to electrolyze water to produce the green hydrogen without emitting carbon dioxide. The objective is to achieve an annual production of 90,000 tons by 2030.
SEDC Energy will take the lead on power procurement and hydrogen production, with Eneos to offer technical support for the production. Eneos will also provide proprietary technology for transporting the hydrogen by sea at room temperature. Sumitomo will evaluate project feasibility and financing.
Hydrogen, which does not emit CO2 when burned, is crucial for decarbonizing industries like power generation, transportation and manufacturing. However, its production in Japan is costly due to high costs of renewable energy.
The Japanese government has set a target of increasing the supply of hydrogen in Japan to 3 million tons per year by 2030. Eneos and Sumitomo are working to produce and transport green hydrogen from various locations globally.