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Auto giants, energy firms team up for expansion of hydrogen fuelling stations

A hydrogen fuelling station is seen on the premises of the Koriyama Municipal Government in Fukushima Prefecture on Nov. 30, 2017. (Mainichi)

A group of Japanese automakers and energy companies have founded a new firm to accelerate the process of setting up hydrogen fuelling stations for hydrogen fuel cell vehicles (FCVs), as such eco-friendly cars are struggling to gain popularity amid strict regulations and high retail prices.

    Eleven domestic companies, including auto giants Toyota Motor Corp., Honda Motor Co. and Nissan Motor Corp. as well as JXTG Nippon Oil & Energy Corp. and the Development Bank of Japan Inc. announced on March 5 that they had provided capital to launch the new firm, Japan H2 Mobility, LLC, on Feb. 20. The newly established company aims to build additional 80 hydrogen stations in Japan by fiscal 2021.

    Toyota project manager Hideki Sugawara, the president of the new company, told reporters at a news conference in Tokyo that the joint venture is "the world's first project in which infrastructure operators, automakers and financial investors have joined hands," indicating the firm's determination to achieve the Japanese government's goal to set up 160 hydrogen fuelling stations by fiscal 2020, 320 locations by fiscal 2025 and 900 fuelling stations by fiscal 2030.

    The number of hydrogen stations in the country as of the end of January this year, including the ones that were still in the planning stage, totaled 101. It was initially planned that 100 such fuelling stations would be set up by 2015, but because each location would cost 400 million to 500 million yen to build -- five times the construction cost of a regular gas station -- the plan was delayed for three years. It has additionally been pointed out that regulations for operating hydrogen stations, such as the requirement to post workers with relevant qualifications at such facilities, and the implementation of safety standards that are stricter than those in the United States or European countries, are hindering expansion of hydrogen stations in Japan.

    In the meantime, FCVs are struggling to gain momentum. In 2014, Toyota released the hydrogen FCV "Mirai" as the world's first commercial fuel cell car. Not only the Mirai's eco-friendly features, such as discharging only water as its exhaust, but also its efficiency -- running roughly 650 kilometers on a full tank and taking only about three minutes to refill -- gave high hopes that the model would become the ultimate green vehicle, but as its retail price is set around 7.2 million yen, sales of the FCV have stagnated.

    Worldwide retail sales of the Mirai totaled about 5,600 units as of the end of January this year. Honda's FCV "Clarity," which was released in 2016 for lease, is also showing poor commercial performance as the number of shipments remained at 511 units as of late January.

    Amid increasingly stricter environmental regulations in each country, the frontrunners in the global green vehicle market are electric cars, which are supposedly easier to develop than FCVs. Currently, Toyota and Honda are the only automakers that are enthusiastic about FCV development, with only a few followers. The Bank of Tokyo-Mitsubishi UFJ predicted last month that in 2035, electric vehicles will account for up to 25 percent of global car sales, but the same prediction said FCVs will make up 1 percent or less.

    Toyota Executive Vice President Shigeki Terashi said during the news conference that electric cars and FCVs "are not opposing sides of a spectrum," underscoring the company's plan to develop both types of green vehicles. Toyota hopes to launch an FCV whose price is about the same with a hybrid car by the end of 2029. Hydrogen fuelling stations are indispensable for growth of the FCV market, and the question of how many more stations it can help set up, amid cost cutting efforts and deregulation, will have a bearing on the value of the new joint firm.

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