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Japan's new hydrogen act introduces a Contracts for Difference (CfD) scheme to support low-carbon fuels, including hydrogen and ammonia. The scheme aims to reduce carbon intensity by 70% compared to fossil fuels, with subsidies to bridge the cost gap between low-carbon and conventional fuels.

The government has allocated JPY 3 trillion over 15 years, drawing on successful models from the UK. Suppliers can apply until March 31, 2025, and must meet specific criteria for approval. The scheme is designed to stimulate industrial demand for low-carbon fuels while ensuring flexibility in production methods.