On Wednesday, shares in Iwatani, Japan's top hydrogen producer, hit a record high on Wednesday after the government pledged to provide trillions of yen to help the sector increase supply to help achieve carbon neutrality.
As a non-polluting alternative to fossil fuels, hydrogen is being proposed as an alternative to fossil fuels, and major industries such as energy, motors, steel, and chemicals are exploring how to convert to hydrogen to reduce carbon emissions.
Japan plans to invest 15 trillion yen $107 billion over 15 years to supply the country with hydrogen, which will be up to 12 million tonnes a year by 2040 and 20 million tonnes by 2050 from 2 million tonnes now.
On Wednesday, Iwatani's shares reached an all-time high of 7,800 yen per share, or 7.1 per cent rise, also a historic high, Refinitiv Eikon data showed, compared to Japan's Nikkei share average index, which was 1.82 per cent down.
We'd expect Iwatani to benefit from Japan's revised hydrogen roadmap, using subsidies to lower the price of hydrogen to match costs of fossil fuels, Jefferies analysts said on Wednesday.
They raised Iwatani's target price by 19 per cent from 8,000 yen a year ago and reaffirmed their buy rating.
The government's supply chain plan, unveiled by the government, should begin yielding commercial production by around 2030, Jefferies said, and increased supplies should lower the hydrogen price from 100 yen per cubic meter now to 30 yen in 2030 and 20 yen in 2050.
The government is considering subsidizing the difference so that the selling price can be kept to the same level as existing fuels like liquefied natural gas and coal.
Iwatani did not immediately respond to a Reuters request for a comment.