The government aims to halve the cost of building hydrogen filling stations by 2020 by relaxing safety regulations, sources said Wednesday.
High costs have been a major reason why companies have avoided investing in hydrogen facilities, threatening the government's goal of establishing 100 stations nationwide by March 2016 and promoting the use of emissions-free vehicles.
A single station currently costs about ¥500 million ($4.2 million) to construct, roughly double the price of equivalent facilities in the United States and Europe. Part of the problem is overly strict regulations.
But expanding their rollout is considered an urgent task if fuel cell vehicles such as Toyota Motor Corp.'s Mirai, which will debut next Monday, are to reach the mass market.
Hydrogen-powered vehicles are seen as one of the most promising future green cars as they run on electricity generated from a chemical reaction of hydrogen and oxygen and produces no harmful exhaust, just water or water vapor.
The Tokyo Metropolitan Government is looking to have 35 hydrogen stations in the city by the 2020 Tokyo Olympics and 80 by 2025.
Also on Wednesday, energy supplier Iwatani Corp. said it will team up with Seven-Eleven Japan Co. in opening convenience stores with hydrogen stations on the premises.
The two companies plan to open two outlets in Tokyo and Aichi Prefecture next year.
Seven-Eleven said it will try using hydrogen from the stations to generate electricity for the stores.