As Japan heavily relies on imports of various products, ranging from oil to liquefied natural gas (LNG), it has made a clean energy transition a top priority in both domestic and foreign policy. As chair of the Group of Seven (G7) developed nations this year, Japan intends to focus on this issue. Japan, the world’s third-largest economy, is energy-poor and has set a target of achieving carbon neutrality by 2050 through the use of a variety of fuels, including hydrogen, wind, and nuclear power.
WHY DOES HYDROGEN AND ITS DEFINITION MATTER FOR JAPAN?
Japan plans to increase its hydrogen supply to 12 million tonnes annually by 2040 and is looking at ways to reduce carbon emissions by changing the definition of hydrogen. The country aims to change the definition of hydrogen to two types – clean or not clean, and produce clean hydrogen from renewable energy or from fossil fuels but with carbon capture and storage (CCS).
Currently, hydrogen is colour-coded based on the type of source it is produced from. To reach its hydrogen supply goals, Japan has signed agreements with countries such as Australia and the Middle East for supply chains. Major industries, including energy, autos, steel, and chemicals, are also exploring ways to switch to hydrogen as a clean alternative to fossil fuels to reduce carbon emissions.
WHAT IS THE ROLE OF AMMONIA?
In an effort to reduce carbon dioxide (CO2) emissions and ensure stable energy supply, Japan is planning to extend the lifespan of its coal-fired power plants by adding ammonia, which is made up of nitrogen and hydrogen, to its fuel mix. Its top power generator, JERA, has been conducting a trial project at a power station in central Japan since 2021.
Japan aims to establish supply chains with countries such as Australia, Norway, and the Middle East while increasing its demand for fuel ammonia to 3 million tonnes annually by 2030 from zero at present. Although it has agreed with other G7 nations on the role of hydrogen and ammonia as effective tools for reducing emissions, Japan has opposed Britain’s proposal for G7 nations to phase out domestic unabated coal power generation by 2030.
WHAT DOES JAPAN THINK OF LNG?
Japan considers liquefied natural gas (LNG) as a temporary solution to transition to cleaner energy, which could still be needed for 10 to 15 more years. However, it has been unsuccessful in persuading other G7 countries to invest heavily in this fossil fuel. Japan still imports some of its LNG from Russia. Carbon capture and storage (CCS) technology is also crucial for Japan to continue using fossil fuels. A roadmap for the long term, released this year, aims for an annual CO2 storage capacity of 6 to 12 million tonnes by 2030.
HOW CAN JAPAN CUT POWER SECTOR EMISSIONS?
Japan generates around one-quarter of its electricity from renewable sources including solar, wind, hydropower, biomass, and nuclear power. It aims to increase its offshore wind capacity to up to 10 gigawatts by 2030 and cut emissions by 46% from 2013 levels. This would require increasing the share of renewable energy to 36%-38% of its electricity mix, double the levels in 2019, and nuclear power to 20%-22% from the current 6%. After the 2011 Fukushima disaster, Japan had no plans to build new reactors but made a major shift in nuclear power policy last year to replace decommissioned reactors and extend the lifespan of others.
DOES JAPAN HAVE A CARBON PRICING SCHEME?
Japan is taking steps to reduce pollution by implementing a carbon pricing system, combining emissions trading and a carbon levy. The G7 ministers for climate change and energy also believe that carbon pricing is an essential measure in achieving net zero emissions. The carbon pricing scheme in Japan will be introduced in phases, with the first phase beginning this month.
WHAT IS THE ROLE OF BATTERIES?
The use of batteries is crucial for Japan to achieve its goal of becoming carbon neutral by 2050, as they are essential for the electrification of mobility devices and the storage of renewable energy. To achieve this goal, Japan is aiming for investments totaling over $24 billion from both public and private sectors to develop a domestic battery production capacity of 150 gigawatt hours (GWh) by 2030. Additionally, Japanese companies aim to achieve global production of 600 GWh of batteries.