Panasonic Corp. is turning a fuel-cell factory in the lakeside city of Kusatsu, in Shiga Prefecture, into what could be the world’s first hydrogen-based plant powered entirely by renewable energy.

Prime Minister Yoshihide Suga’s October pledge to make Japan carbon-neutral has been a "tailwind” for Panasonic’s hydrogen-factory project, and the company intends to commercialize the system by fiscal 2023 and sell it globally, said Norihiko Kawamura, manager of Panasonic’s hydrogen business promotion office.

Japan was an early leader in developing hydrogen as an alternative to fossil fuels. The country began investing heavily in the gas in the 1970s when the first of several oil shocks exposed its reliance on imported petroleum.