The Japan Aerospace Exploration Agency (JAXA) said Monday it aims to engage in lunar exploration from around the mid-2030s, using hydrogen generated from water extracted from the Moon's ice deposits as fuel.

Using the water-derived fuel is expected to cut costs compared with transporting fuel from Earth. While liquid water does not exist on the moon's surface, past research suggests there may be ice in a crater near the lunar south pole, which has never been exposed to sunlight.

Japan plans to work with the United States in building a lunar orbit space station, called Gateway, in the 2020s and constructing by around 2035 a fuel factory at the lunar south pole.