- JERA and Mitsui secure more than one third of Japan hydrogen support budget through overseas ammonia imports.
- Majority of US$19.2 billion programme remains available, signalling further international awards.
- Move confirms Japan shift from domestic pilots to large scale global hydrogen supply chains.
Japan has taken a decisive step toward scaling its low carbon hydrogen economy by awarding its first international projects under the government hydrogen Contract for Difference programme, according to new analysis from Wood Mackenzie.
The Ministry of Economy, Trade and Industry has approved two large scale blue ammonia import projects led by JERA and Mitsui and Co, marking a transition away from small domestic demonstrations toward globally integrated supply chains. Together, the projects are expected to receive an estimated US$6.8 billion in CfD support over 15 years, representing around 35 percent of Japan total US$19.2 billion hydrogen price gap support programme.
The projects will import a combined 772,000 tonnes of blue ammonia per year from Louisiana in the United States from 2030 to 2031. This is equivalent to around 120,000 tonnes of hydrogen annually and will be supplied from the Blue Point facility, a 1.4 million tonne per annum project developed with CF Industries.
JERA holds a 35 percent equity stake in Blue Point and will offtake around 500,000 tonnes per year starting in February 2030, primarily for ammonia co firing at its Hekinan coal power station in Aichi. Mitsui holds 25 percent equity and will offtake 280,000 tonnes per year from January 2031, supplying Hokkaido Electric Power, UBE Mitsubishi Cement and Tosoh.
Together, the Japanese partners have secured more than half of the Blue Point facility capacity, significantly reducing commercial risk for the project and reinforcing confidence in long term international ammonia trade.
“This CfD round represents a breakthrough rather than a conclusion,” said Shintaro Onishi, Principal Analyst for Hydrogen and Ammonia Research at Wood Mackenzie. “Japan is now backing large scale international supply chains instead of limiting support to domestic demonstrations. By combining United States production incentives such as the 45Q tax credit with domestic CfD support, Japan has created a more cost effective route to secure low carbon ammonia supply.”
The awards build on Japan global leadership in ammonia co firing technology. JERA Hekinan plant has already completed the world first 20 percent ammonia combustion demonstration in a commercial coal unit, with full commercial operation targeted for 2029. The new CfD backed imports will also support ammonia co firing at Hokkaido Electric Tomato Atsuma plant, extending decarbonisation efforts beyond central Japan.
“Japan hydrogen strategy is anchored in real demand,” Onishi added. “These projects link imports directly to power generation and industrial use across utilities, cement and chemicals. That creates strong cross sector synergies and a more durable business case for large scale ammonia deployment.”
The CfD awards form part of a broader integrated hydrogen policy framework. Both Hekinan and Tomato Atsuma previously secured support under Japan Long Term Decarbonised Power Auction, which focuses on capital cost assistance. Combined with fuel price support and infrastructure development incentives, the approach reduces risk across the full hydrogen value chain from production through to end use.
With around 65 percent of the hydrogen CfD funding envelope still unallocated, Wood Mackenzie expects further international awards to follow. Two smaller domestic projects approved in September 2025 are expected to have only a limited impact on the remaining budget.
“The message to developers and investors is clear,” Onishi concluded. “Japan hydrogen CfD programme is accelerating and expanding overseas at scale. Each new project strengthens the foundations of a future global hydrogen market, but meeting the three million tonne 2030 target will require a faster pace of awards and project development.”
Author: Bryan Groenendaal
