Although the most developed states generally agree that robust net zero targets must be met in the nearest future, long-term decarbonisation strategies are variable around the globe. Japan is one example of a country facing structural difficulties with its energy supply and turning to natural gas as a transitional solution with a view to the implementation of a low-carbon economy by 2050.
The magnitude 9 earthquake that erupted off the coast of Japan triggering a colossal tsunami back in 2011 would have devastating consequences not only for the environment, but also for Japanese long-term energy infrastructure strategies and support for growing the nuclear sector in a framework of decarbonisation targets. According to the WHO, the consequences for the environment and the population were minimal, but 80,000 people were evacuated and anti-nuclear sentiment swept the country. Plans for new reactors were swiftly shelved.
One long-term consequence of the disaster was that there was to be a complete re-think of the Japanese energy transition strategy. But this took some time. Immediate utilities requirements saw the continued use of coal and nuclear, especially with Japan being one of the most natural-resource-starved countries in the world (Japan relies on imports for about 90 per cent of its energy needs).
But a more aggressive approach from its Western partners has seen Japan recently announce an equally aggressive approach to the energy transition, including the expansion of renewables and investments in transitional energy sources like natural gas. In the short-term, however, Japan’s energy needs have led to government power saving initiatives, with calls for households and industries around Tokyo to save electricity in July and August to ensure a stable power supply during the peak summer season.
In the context of a fragile post-pandemic economic landscape, increasing energy consumption and a reliance on energy imports to meet demand, a new global strategy for tackling the energy transition was unveiled in December 2022. The so-called Green Transformation (GX), is an ambitious initiative led by the Japanese government to entirely transform the socio-economic system from one dependent on fossil fuels to one supported by an industrial structure centred on clean energy. It is a main feature of Prime Minister Fumio Kishida’s government’s energy policy.
“In order to achieve a positive cycle of economic growth and environmental sustainability, Japan must use its 2030 reduction targets and goal of carbon neutrality by 2050 as opportunities for growth, and increase its industrial competitiveness accordingly. For this to happen, it will be necessary for a group of companies working swiftly toward carbon neutrality and succeeding internationally to lead the transformation (GX: green transformation) of the overall economic and social system,” outlined a government press release in February 2022.
Renewables, hydrogen, and nuclear?
One of the main critiques of the GX initiative is its focus on industry rather than decarbonisation. Japan is, after all, the world’s fifth highest emitter of greenhouse gases, but is nonetheless aiming to reduce 2013 emissions levels by 46% by 2030. By 2021/2022, the country had achieved a 16.9% reduction, but has seen slight rise post-pandemic due to an increase in consumption. To meet this rise in energy needs, the Japanese government has been forced to partially revive its nuclear infrastructure, in spite of GX commitments to invest in renewables and hydrogen.
After Fukushima, Japan closed 54 of its nuclear reactors, but relaunched 9. From its depleted fleet, Japan plans to generate at least 22% of its total electricity from its nuclear reactors by 2030, up from just 4% in 2020. This would require at least 27 operational reactors. At a meeting of the GX commission back in July 2022, Prime Minister Fumio Kishida outlined the key role nuclear has to play in meeting current energy needs while respecting emissions targets. “Faced with the risk of electricity shortages, we must take all necessary measures,” he said.
Mr. Kishida also insisted on the importance of “making the public understand” the value of nuclear power. The government has also decided, following the example of the United States and the European Union, to extend the operating life of power plants beyond 60 years, and to replace them with a new generation of facilities. This policy marks a real change in Japanese attitudes towards nuclear power, which were so damaged by the 2011 Fukushima disaster. Urgent energy needs are fuelling this transformation, which is at the same time being pushed by the GX agenda.
The ‘carbon neutral by 2050’ target necessitates serious investment in renewables, especially offshore wind and solar infrastructure. Back in 2021, the Japanese government approved a new Basic Energy Plan that stated that renewables should account for 36-38% of power supplies by 2030, a target retained in the framework of the GX initiative (critics of the GX Basic Policy say this does not go far enough, nor place sufficient importance to renewables as a primary energy source). Regarding offshore wind, for example, Japan is in the process of considering expanding locations of offshore wind farms from inside its territorial waters to the country’s exclusive economic zone in a bid to jump-start the industry, which has a capacity of almost 0 (compared to 27.8 GW in Europe and 26.3 GW in China).
Regarding solar, although Japan faces geological and meteorological challenges, it remains a leader in solar PV innovation and was the first Asian country to deploy floating solar systems; the country’s numerous inland lakes and reservoirs are now home to 73 of the world’s 100 largest floating solar plants and account for half of those plants’ 246 megawatts of solar capacity. Geothermal energy is also a route being explored.
When it comes to hydrogen, Japan’s strategy was mapped out back in 2017. This year, though, PM Kishida has stated that the plan needs a rethink, and outlined in May an ambitious target to boost annual supply to 12 million tonnes by 2040. Hydrogen will form a key component of the GX strategy, with the government keen to mirror efforts in the United States and Europe to put clean hydrogen at the forefront of the energy transition.
LNG, a transitional solution
The GX plan is ambitious in nature, but is adorned with the fundamental pragmatism required if Japan is to transition smoothly to a low-carbon economy by the 2050 target. This means a hybrid approach that will continue to include some fossil fuels to cope with peaks in consumption. Japan has therefore turned to Liquified Natural Gas (LNG), a popular solution around the globe, seen as a lesser of two evils when compared to oil or coal. With a higher energy yield than either of these fuels, and CO2 emissions that are less than half that of coal and oil, natural gas – which is relatively easy and quick to develop compared with nuclear power – has become the central element of many transition strategies around the world.
As a result, LNG has played an increasingly important role in Japan in recent years, with LNG-fired power stations almost becoming the ‘backbone’ of the country’s energy resources, with the corollary of increased dependence on imports. Japanese firm JERA, is one of the world’s biggest buyers of LNG, and Japan itself was the biggest importer of the fuel in 2022. The country has been facing an uphill battle with the G7 as it calls for an increase in LNG investment, with other powers concerned about the environmental effects of increased fossil fuel use (Japan has also had to break with G7 allies regarding Russian oil imports). LNG is so important to the country that, in response to the sanctions passed against Russia, the government requested an exemption for Russian hydrocarbons, and LNG in particular, as Japan depends on Russia for around 9% of its imports.
LNG is at the heart of Japan’s efforts to improve resilience in the case of an energy crisis like the one that hit Europe in 2022. According to a summary released by the Ministry of Economy, Trade and Industry, the government is aiming to import at least 840,000 tons of LNG a year under a new program that is aiming to create a “strategic buffer”. The country is also investing directly in LNG projects. Notably, Japan agreed back in May to help Mozambique resume its liquefied natural gas development project, one of the biggest such projects in Africa. “Our country will implement assistance to help restore stability of the local area,” PM Kishida told a joint news conference with Mozambique’s president, Filipe Nyusi. The province of Cabo Delgado, where the deposits are located, is suffering from insecurity due to an Islamist insurrection, but investors are very hopeful that the project will soon get up and running. Mozambique has huge natural gas potential, and Japan is just one of many suitors eager to help the project succeed.
[Photo by Qīng kòng báifān, via Wikimedia Commons]
Jeffrey Brown is a retired oil and gas engineer. After a long career that took him from R&D to project management and international negotiations, he shares his vision of the strategic evolution of this sector.
