The global hydrogen energy industry has entered a critical stage of route differentiation and iterative upgrading. Boasting outstanding low-carbon attributes, hydrogen energy has become one of the core tracks of global energy transition and is widely favored by national policies and industrial capital worldwide. As a pioneer in hydrogen energy layout, Japan has clarified its long-term industrial goals, planning to increase its domestic hydrogen supply tenfold from the current level to 20 million tons by 2050, drawing a clear growth blueprint for the hydrogen industry.
Hydrogen fuel cells have long been the mainstream technical route for hydrogen utilization. However, hampered by prominent drawbacks including high costs, stringent hydrogen purity standards, and limited operation and maintenance systems, their large-scale commercial implementation has fallen short of market expectations. Against this backdrop, hydrogen internal combustion engines (HICEs) have risen rapidly with differentiated advantages of low cost, high adaptability and easy industrialization, making up for the shortcomings of hydrogen energy application and becoming a core supplementary solution for the commercialization of global hydrogen energy.
The core industrial value of HICEs lies in leveraging the mature internal combustion engine industrial system to create brand-new hydrogen application scenarios and incremental market demand. Large-scale mass production can continuously reduce the overall costs of hydrogen production, storage, transportation and utilization, effectively solving the core pain points of high costs and difficult commercialization that restrict the hydrogen industry’s large-scale development. At present, leading Japanese enterprises represented by Kawasaki Heavy Industries and Toyota have taken the lead in intensive layout, covering hydrogen power generation, passenger vehicles, commercial vehicles, special equipment and other diversified scenarios. They are accelerating the industrialization of HICEs from laboratory trials and reshaping the competitive landscape of the global hydrogen industry.
Giants’ Heavy Investment Expands Industrialization Boundaries via Multi-scenario Application
As a core driver of the current industrialization of HICEs, Kawasaki Heavy Industries has completed full-chain technological layout targeting small-scale hydrogen power generation, launching the new O'Cuvoid hydrogen power generation unit. Featuring lightweight design, universal compatibility and low cost, the product accurately meets the needs of market popularization.
Compact in structure, the power generation unit covers an area of only 1 square meter with a targeted single-unit output power of 35 kilowatts. Its core HICE is iterated from Kawasaki’s mature motorcycle power technology, equipped with the same supercharger as high-performance motorcycles. It realizes efficient compression and full combustion of hydrogen, effectively overcoming the industry’s technical challenges of hydrogen’s low ignition point and difficult combustion control.
The equipment features extremely high scenario flexibility. It can operate independently for small and medium-power scenarios such as mobility tools and field operations, and can also be connected in multiple units to adapt to large heavy-duty equipment including four-wheel vehicles and trains, covering civil, industrial and special operation fields. Yoshimoto Matsuda, Executive Managing Director of Kawasaki Heavy Industries, stated that the company aims to build the power generation unit into a universal clean energy power device comparable to lithium batteries, and targets a business scale of 100 billion yen within a decade to expand the mass market through large-scale production.
Beyond power generation, Kawasaki continues to expand hydrogen application boundaries. It plans to equip the same HICE on the Corleo four-legged manned bionic robot. Scheduled for commercial launch in 2035, the bionic horse-like device supports manned travel in complex terrains such as mountains and farmlands, further exploring the application potential of HICEs in special equipment.
As a global benchmark in the hydrogen energy industry, Toyota has also continuously increased investment in the HICE track, forming a dual-layout pattern of "fuel cells + hydrogen internal combustion engines". As early as 2014, Toyota launched the world’s first mass-produced fuel cell passenger car Mirai, establishing its leading position in global hydrogen technology. Nevertheless, the enterprise has not limited itself to a single technical route, but continued to iterate low-cost and easily applicable HICE technologies.
To verify the power performance and commercial potential of HICEs, Toyota fielded a GR Corolla race car equipped with a hydrogen internal combustion engine in Japan’s Super Taikyu Endurance Race Series in June this year, with overall power performance matching traditional fuel-powered race cars. Akio Toyoda, President of Toyota Motor Corporation, personally participated in the race, demonstrating the enterprise’s long-term optimism about the HICE route. In terms of technological iteration, Toyota launched liquid hydrogen technology trials in 2023 and further installed superconducting motors on hydrogen storage tanks this year, continuously optimizing the power stability and cruising range of HICEs to make up for technical deficiencies.
The industrial pilot layout of global HICEs is accelerating comprehensively, with leading enterprises worldwide stepping up layout optimization. Mitsubishi Fuso Truck and Bus Corporation has developed dedicated HICEs for heavy-duty trucks, reusing 80% of the parts of existing diesel trucks to minimize R&D and production costs. India has elevated hydrogen energy to a national strategic industry, and Tata Motors has synchronously developed HICE technologies for hydrogen heavy trucks, accelerating the formation of the global HICE industrial matrix.
Outstanding Technical Advantages and Dual-drive Pattern Improve Hydrogen Industrial Ecosystem
Compared with the high-end and niche hydrogen fuel cell route, HICEs show prominent advantages in industrialization, achieving breakthroughs in cost, adaptability, operation and maintenance, and hydrogen usage threshold, and greatly lowering the barriers for large-scale hydrogen energy adoption.
In terms of cost, HICEs are mainly manufactured from conventional industrial materials such as steel and aluminum, requiring no precious metal catalysts like platinum which are indispensable for fuel cells, granting them significant raw material cost advantages. Existing industrial prototype data shows that in general power and power generation scenarios, the overall hardware cost of HICE systems is only about one-tenth of that of fuel cell systems, offering enormous cost reduction potential.
In terms of operation and maintenance, HICEs can fully reuse the existing maintenance system for fuel vehicles and power equipment, eliminating the need to build exclusive operation and maintenance infrastructure and service ecosystems, and substantially reducing subsequent operational costs and industrialization barriers.
The advantage in hydrogen usage threshold is particularly critical. Traditional vehicle fuel cells require extremely high hydrogen purity (a universal industry standard of over 99%), and the high cost of preparation, purification and transportation of high-purity hydrogen severely restricts popularization. In contrast, HICEs have higher tolerance for hydrogen purity, compatible with low-cost industrial by-product hydrogen and mixed combustion of natural gas and hydrogen, greatly reducing hydrogen usage costs and raw material barriers.
In terms of power performance, HICEs work through mechanical combustion, delivering faster power output response and stronger instantaneous explosive power than fuel cells relying on electrochemical reactions, making them more suitable for high-intensity power scenarios such as heavy-duty transportation, racing events and field special operations.
The huge market potential is verified by industry data. Future Market Insights, a U.S. market research institution, predicts that the global HICE market size will exceed 20 billion U.S. dollars by 2036, potentially surpassing the scale of the global fuel cell market in the same period and demonstrating broad growth prospects.
It is worth clarifying that HICEs and hydrogen fuel cells are not in a substitutive or competitive relationship, but form a complementary and dual-drive core combination for the hydrogen industry, with each having unique strengths and targeted application scenarios. Under steady-state operating conditions, fuel cells achieve a peak energy conversion efficiency of about 60%, far exceeding the 40% peak efficiency of HICEs. Featuring zero pollutant emissions throughout operation, they excel in environmental performance and energy efficiency, making them ideal for refined, low-load scenarios such as civilian passenger vehicles and distributed energy storage.
HICEs generate a small amount of nitrogen oxides during combustion, resulting in slightly inferior original environmental performance compared with zero-emission fuel cells, but can achieve near-zero emissions through tail gas post-treatment technology. Their core advantages of low cost, high adaptability and strong power precisely match the demands of high-power industrial equipment, engineering machinery, heavy-duty commercial vehicles and special operation equipment, filling the gap in the mid-end hydrogen power market. Yoshimoto Matsuda pointed out that a consensus has been reached in the industry that the two hydrogen technologies should develop in parallel and coordinate with each other to improve the hydrogen energy application ecosystem.
Persistent Industrial Bottlenecks and Long-term Growth Value
Despite mature technical routes and promising market prospects, the large-scale popularization of HICEs still faces multiple industrial bottlenecks restricting rapid industry expansion.
In terms of infrastructure, global hydrogen supporting facilities are underdeveloped and unevenly distributed. Taking Japan as an example, the number of domestic hydrogen refueling stations has continued to decline from 179 in FY2022 to 150, and insufficient hydrogen refueling infrastructure directly hinders the landing and promotion of terminal HICE equipment.
In terms of policies and market competition, energy policies in some regions have undergone periodic adjustments, and the short-term discourse power of fossil fuels has rebounded, partially offsetting the policy dividends of the hydrogen industry. Meanwhile, the continuous technological iteration and steady cost reduction of pure electric vehicles have further squeezed the market space of hydrogen power in civilian passenger vehicles, leading to increasingly fierce industry competition.
The cost dilemma on the hydrogen supply side remains unsolved. The current global hydrogen production structure is still dominated by fossil fuel-based hydrogen production, with a low proportion of low-carbon green hydrogen output and insufficient supply. The current market price of hydrogen is about 100 yen per cubic meter, far higher than the Japanese government’s target price of 20 yen per cubic meter by 2050. Zero-carbon green hydrogen relies on water electrolysis powered by renewable energy, with high technical costs and no large-scale commercial viability in the short term, becoming the core bottleneck restricting the cost reduction of the entire hydrogen industry chain.
From the long-term perspective of dual-carbon goals, the core industrial value of HICEs lies in providing a low-cost, implementable and scalable development path for the hydrogen industry. It revitalizes the trillion-level traditional internal combustion engine industrial ecosystem, greatly lowering the technical and financial barriers for hydrogen energy popularization. It can rapidly foster new terminal hydrogen demand and drive cost reduction and efficiency improvement across the upstream hydrogen production, storage, transportation and refueling industrial chain through large-scale application.
With continuous technological iteration by global leading enterprises including Kawasaki Heavy Industries and Toyota, as well as coordinated layout of the global industrial chain, HICEs will continuously fill the gaps in the mid-end hydrogen application market, forming a diversified and complementary clean energy power pattern with hydrogen fuel cells and pure electric power, and becoming an important pillar for the implementation of global dual-carbon goals and the construction of a new diversified clean energy system.
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