Industrial Transformation in ASEAN A Cluster-Driven Model for Regional and Global Collaboration 2026

CASE STUDY 6 Kawasaki Carbon Neutral Industrial Complex: transitioning from fossil hub to hydrogen powerhouse Context: The Kawasaki Coastal Area, once Japan’s epicentre for crude oil and LNG imports, is transforming into a global frontrunner in hydrogen commercialization. With limited renewable energy potential, the cluster has identified clean hydrogen, carbon capture, and regional optimization of energy as the most viable pathways to secure competitiveness in a low-carbon economy. A council of nearly 100 stakeholders provides a platform for collaboration. Objective: Building on this transformation, Kawasaki aims to establish itself as the world’s first commercial- scale liquefied hydrogen (LH2) hub, aligned with Japan’s 2050 net-zero ambition. Intervention: Kawasaki’s low-carbon transformation is driven by large-scale hydrogen infrastructure and innovation. –Hydrogen infrastructure development: Construction of the Kawasaki LH2 Terminal began in 2025 as the “Liquefied Hydrogen Supply Chain Commercialization Demonstration” project subsidized by Japan’s Green Innovation Fund. This terminal will be equipped with a 50,000m3 liquefied hydrogen storage tank (the world’s largest), alongside facilities for maritime cargo handling, hydrogen liquefaction and more. By 2030, the project will start operating the Kawasaki LH2 Terminal and a newly constructed liquefied hydrogen carrier with the forefront technology, alongside Japan’s completion of the technical and regulatory foundations for a commercial international hydrogen supply chain. From 2030 onwards, the aim is to import liquefied hydrogen into Japan using liquified hydrogen carriers. It is expected to handle about 30,000 tons of LH2 annually, supplying industries and mobility across Tokyo. This milestone gives Kawasaki a first mover advantage in global hydrogen markets. –Innovation: Shared cogeneration and utility optimization is projected to deliver 20% energy efficiency gains, while carbon recycling initiatives integrate captured CO2 into synthetic fuels and materials, highlighting how innovation (not just emissions control) could drive long-term competitiveness in a net-zero future. As Japan advances towards its 2050 net-zero ambition, Kawasaki is embracing a major transformation. One example is the construction of one of the world’s first commercial-scale liquefied hydrogen terminals. Through technological innovation, we are committed to renewing our city as an industrial hub that achieves both net-zero emissions and economic growth. Norihiko Fukuda, Mayor, Kawasaki CityDeploying low-carbon technologies is a key factor in the energy transition and will define competitiveness in industrial clusters. Clusters provide controlled environments to pilot, integrate and scale technologies – from renewable systems and hydrogen networks to digital technologies and automation. Shared infrastructure and advanced digital systems can transform legacy assets into engines of clean, efficient and future-ready growth.3.3 Technology The shift to an eco-friendly hydrogen economy may be gradual, but it is already under way. Those countries and businesses that invest now and stay the course will ultimately lead the energy transition. History reminds us that no major energy transition has ever occurred in just a decade or two. Kim Seo-Young, Founder and Chief Executive Officer, Hylium Industries Image credit: Kawasaki City 2025. 22 Industrial Transformation in ASEAN: A Cluster-Driven Model for Regional and Global Collaboration