TOKYO — Japan and the European Union on Monday agreed to work together on policies related to creating demand and supply for clean hydrogen as well as to cooperate in advancing technologies to develop the new fuel, a joint statement said.

Japan sees hydrogen as a new and cleaner source to gradually substitute liquefied natural gas (LNG), part of the country's path to carbon neutrality by 2050.

The EU aims to produce 10 million metric tons and import 10 million tons of renewable hydrogen by 2030 as the bloc moves to cut carbon emissions but the switch needs investments in infrastructure to create demand for the new fuel

"Hydrogen will be very soon an internationally traded commodity, and close EU-Japan cooperation will be essential for promoting renewable and low-carbon hydrogen globally, and ensuring that standards and regulations converge," Kadri Simson, European Commissioner for Energy, told reporters.

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On Monday, Simson met Ken Saito, Japan's minister of economy, trade and industry, and the two also chaired a Japan-EU hydrogen business forum attended by executives including of JERA, Tokyo Gas, Mitsui, Iwatani.

The EU aims to produce 10 million metric tons and import 10 million tons of renewable hydrogen by 2030 as the bloc moves to cut carbon emissions but the switch needs investments in infrastructure to create demand for the new fuel.

Last week Germany, approved a bill to fast-track the construction of hydrogen infrastructure, import and production facilities, also as it aims to cut emissions.

Japan plans to spend 3 trillion yen ($19 billion) over the next 15 years to subsidize production of clean hydrogen, according to Nikkei.

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Japanese trading house Itochu Corp on Monday said it is conducting a feasibility study of building hydrogen and ammonia supply chain in Kitakyushu in southern Japan, one of the future offshore wind hubs in the country.