Japan Bets Big on Hydrogen Aviation and Aerospace with ¥1 Trillion Strategy Fund
- HYSKY Society
- Sep 30
- 3 min read
Japan has unveiled its boldest aerospace initiative in decades: the ¥1 trillion ($6.8 billion) Space Strategy Fund, a ten-year program launched in 2024 to supercharge the nation’s space and hydrogen-powered aviation sectors. The effort aims to double the size of Japan’s domestic space market to ¥8 trillion ($54 billion) by the early 2030s while spearheading breakthroughs in hydrogen propulsion, reusable rockets, eVTOLs, and advanced composites.
Hydrogen at the Heart of Japan’s Aerospace Ambitions
While global giants Airbus and Boeing hesitate on next-generation hydrogen aircraft, Japan is moving forward. The New Energy and Industrial Technology Development Organization (NEDO) is investing in hydrogen-burning turbines, fuel cells, and sustainable aviation fuel while also building out a hydrogen supply chain. JAXA, the Japan Aerospace Exploration Agency, is managing the Space Strategy Fund in coordination with METI and other ministries, with early funding flowing into regenerative fuel-cell systems, orbital transfer vehicles, and rocket components.
Toyota and Honda, Japan’s auto powerhouses, are also reshaping aerospace. Toyota is supporting U.S.-based Joby Aviation’s electric air taxi development while co-developing the hydrogen-powered Lunar Cruiser rover with JAXA. Honda recently shocked the aerospace industry with a secret reusable rocket test flight and is now developing space-based electrolysis systems to enable hydrogen power on the International Space Station and beyond.
SkyDrive, another rising Japanese player, is developing the compact SD-05 eVTOL in partnership with Suzuki, targeting dense urban mobility markets. Its design differs from U.S. rivals Archer and Joby, focusing on short hops between rooftops and rail stations.
National Security and Global Competitiveness
Space and hydrogen projects also serve Japan’s growing defense needs. With a 67% increase in the Defense Ministry budget since 2021, Japan is investing in dual-use technologies like geostationary laser communications (via Space Compass, a venture between NTT and SKY Perfect JSAT) and high-altitude platform stations (HAPS) in partnership with Airbus’ AALTO.
Industry leaders stress the strategic importance of building domestic launch and satellite capabilities.
“The importance of space assets is expanding,” said Maruoka Shingo, advisor to the Space Strategy Fund. “People’s [day-to-day] living is supported by space assets.”
Consultant Rainer Horn of Novaspace added: “The underlying objective is about building a Japanese domestic space market, creating the opportunity that certain payloads can be bought domestically and not have to be imported.”
For more information
Japan Aerospace Exploration Agency (JAXA):
(Top image: Credit — SkyDrive)
FAQ: Hydrogen Aviation and Japan’s Aerospace Strategy
1. Why is Japan investing in hydrogen aviation now?
Japan lacks domestic hydrocarbon reserves and sees hydrogen as a strategic energy source for both aviation and national energy security.
2. What role does JAXA play in hydrogen aviation?
JAXA is managing grants for regenerative fuel-cell systems and hydrogen-burning turbines through the ¥1 trillion Space Strategy Fund.
3. How are Toyota and Honda contributing to hydrogen aerospace?
Toyota is co-developing a fuel-cell lunar rover and supporting Joby Aviation’s eVTOL development. Honda has tested a reusable rocket and is working on space-based hydrogen electrolysis systems.
4. What is the Lunar Cruiser?
The Lunar Cruiser is a large, hydrogen-powered rover developed by Toyota and JAXA for human exploration on the Moon.
5. How does hydrogen compare to battery-electric systems in aviation?
Hydrogen fuel cells offer higher energy density than batteries, making them better suited for longer-range aircraft and space applications.
6. What is NEDO’s Next-Generation Aircraft program?
It focuses on developing hydrogen-burning turbines, advanced composites for blended wing bodies, and sustainable aviation fuels.
7. How is SkyDrive’s eVTOL different from Joby and Archer’s aircraft?
SkyDrive’s SD-05 carries two passengers plus a pilot, optimized for short urban hops, while U.S. rivals are building larger four-passenger shuttles.
8. How does Japan’s defense budget connect to hydrogen aviation?
Hydrogen and related aerospace projects are often dual-use, supporting both civilian applications (e.g., clean aviation) and defense systems (e.g., satellite relays).
9. What lessons did Japan learn from the failed SpaceJet program?
Rather than competing head-to-head with incumbents, Japan is focusing on niche markets and emerging sectors like hydrogen aviation and space mobility.
10. How will hydrogen aviation benefit Japan’s economy?
It creates new industries, supports high-value manufacturing jobs, and reduces reliance on imported fossil fuels, aligning with Japan’s social and energy security priorities.
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