The efficient agreement on this partnership was largely due to a mood of "let's do it together as one team" that evolved naturally through discussions on the operational side, rather than top-down. The Japanese government, in its ‘Basic Hydrogen Strategy’, aims to secure a 10% share (15GW) of the global water electrolysis system market by 2030 for Japanese companies. We aim to contribute to achieving this goal by joining forces with Toyota.

In this project, we are developing a ‘water electrolysis system’ that generates hydrogen by electrolyzing water, by repurposing the mechanism of the fuel cell stack, a key technology of the fuel cell vehicle MIRAI, which produces water from hydrogen and oxygen and uses the electric energy generated in the process to drive the motor. By combining Toyota's electrolysis cell stack technology with Chiyoda’s plant expertise, we are jointly developing a large-scale water electrolysis system as a new market entrant.

Our goal is to achieve an annual production of 1 GW of water electrolysis systems by 2030. A crucial factor in promoting the widespread adoption and expansion of water electrolysis systems is reducing hydrogen production costs. The Japanese government's basic hydrogen strategy sets a target of 30 yen/Nm3 for hydrogen supply costs (CIF cost) by 2030 and 20 yen/Nm3 by 2050. If we cannot achieve low-cost hydrogen production, it will be difficult for the business to succeed and for widespread hydrogen adoption and utilization. Reducing hydrogen production costs in customer lifecycles is also important.

When we look at the cost structure of water electrolysis systems, the largest proportion is electricity required for electrolysis. To reduce hydrogen production costs, it is crucial to minimize electricity costs. We can leverage our expertise in energy management, gained from designing and constructing large-scale solar power plants, large-scale battery energy storage systems and implementing advanced power system management.

That's right. Energy management can be seen as the ‘brain’ that provides instructions and commands to ensure efficient functioning of the system. We can also apply our strengths in this area.

The realization of a hydrogen society requires establishing supply chains that include producing, transporting, storing and using hydrogen. Chiyoda has primarily focused on transportation and storage, but by expanding into hydrogen production through this project, we can also contribute to the acceleration of supply chain development and provide more comprehensive solutions.

This project involves launching a hydrogen supply chain construction business, which can be viewed as developing infrastructure from scratch. The project is a significant challenge, but it also greatly enhances the realization of a hydrogen society and is a hugely rewarding endeavor. The market for water electrolysis systems is currently led by foreign companies, particularly in Germany. However, if our system is adopted globally, it will bring us ‘one step closer’ to realizing a hydrogen society and will contribute to Japan's energy security.

While we aim to promote and expand large-scale water electrolysis systems, there are also expectations for the utilization of hydrogen in applications such as small-scale hydrogen stations. The hydrogen business currently envisions producing large quantities of hydrogen in regions where it can be produced cheaply, for transportation to demand areas. Reducing the costs associated with large-scale transportation and storage has become a major challenge requiring a re-evaluation of the locally produced concept for local consumption. The development of infrastructure that enables hydrogen to be used in locations that are closer to everyday life will contribute to the realization of a hydrogen society.

The main challenge is how to maximize the potential of the electrolysis cell stack, which is the core component of the water electrolysis system. This is the key issue that needs to be addressed. Toyota is actively working on continuous improvement and we are engaged in ‘trial and error’ to overcome this challenge and maximize the value of the system.

Although we are relative latecomers in the field of water electrolysis and are striving to create something distinctive to differentiate ourselves, it is crucial to enter the market as soon as possible. Deciding when to do this is a challenging balance. Our products are refined by having customers use our products and immediately respond with improvement proposals. It is a question of timing for future social implementation. We are aligning closely with Toyota and aim for a full-scale rollout by fiscal year 2027.

Indeed, that is a crucial point. I have experienced launching several new businesses and understand that customers can be cautious when it comes to adopting new systems. It will be challenging to convince customers to be the first to adopt a water electrolysis system. However, once we are able to sell the first unit, it should open up new possibilities and I am eager to make it happen as soon as possible.