Cabinet Approvals on the “Bill for the Act on Promotion of Supply and Utilization of Low-Carbon Hydrogen and its Derivatives for Smooth Transition to a Decarbonized, Growth-Oriented Economic Structure” and the “Bill for the Act on Carbon Dioxide Storage Businesses”

1. Background to and purpose of the Bills

To achieve carbon neutrality by 2050, it is essential for Japan to further advance thorough energy conservation and promote the utilization of decarbonized power sources, including renewable energy and nuclear energy, and to implement green transformation (“GX”) in the hard-to-abate industries.

Aiming to promote GX in the hard-to-abate industries,  including iron and steel,  chemicals, mobility and power generation sectors, the Bills  stipulate provisions that are to be carried out in these industries: (1) promotion of the supply and utilization of low-carbon hydrogen and its derivatives, and (2) development of the business environment for carbon dioxide capture and storage (the “CCS”), a technology that is used to store carbon dioxide underground. For this purpose, the Bills stipulate necessary measures in accordance with the "Strategy for Promoting Transition to a Decarbonized, Growth-Oriented Economic Structure" on which the Cabinet Approval was made in July 2023.

2. Outline of the Bills

(1) The Bill for the Act on Promotion of Supply and Utilization of Low-Carbon Hydrogen and its Derivatives for Smooth Transition to a Decarbonized, Growth-Oriented Economic Structure (“Hydrogen Society Promotion Bill”)

Aiming to enable the Government of Japan to take the lead in promoting the supply and utilization of low-carbon hydrogen and its derivatives early, the Hydrogen Society Promotion Bill is to stipulate special measures involving the following: formulating basic policies, setting up a scheme for approving business plans, providing support measures for businesses that have received approval for their business plan ("support focusing on the price gap," "support for the development of hubs," etc.), and granting special regulatory exemptions. In addition, aiming to expand the supply of low-carbon hydrogen and its derivatives, the Hydrogen Society Promotion Bill is to include measures for stipulating criteria that businesses which supply low-carbon hydrogen and its derivatives are required to have well regards  in their operations.

(2) The Bill for the Act on Carbon Dioxide Storage Businesses (CCS Business Act)

Aiming to develop a business environment in which private companies are able to launch CCS businesses in Japan by 2030, the bill is to stipulate provisions involving the following: establishing a licensing system for storage business and trial-drilling, establishing a storage right system and a trial-drilling right system, and developing business regulations and safety regulations pertaining to storage businesses and pipeline carbon dioxide transportation businesses.

Note:

*　Hydrogen Society Promotion Bill is to cover hydrogen and hydrogen compounds as designated by METI. For the purpose of this press release only, this is described as “hydrogen and its derivatives”.
** The names of the Bills are a provisional English translation and subject to change.

Division in Charge

Information on the bills as a whole:

Policy Planning and Coordination Division, Commissioner’s Secretariat, Agency for Natural Resources and Energy

Information on the Bill for the Act on Hydrogen Society Promotion:

Hydrogen and Ammonia Division, Agency for Natural Resources and Energy

Information on the Bill for the Act on CCS Business:

Carbon Dioxide Capture and Storage Policy Office, Agency for Natural Resources and Energy