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Japan Times
5 days ago
- Business
- Japan Times
China is challenging Japan's LNG dominance. What does that mean for Japanese buyers?
Over the past four years, a big shift has taken place in the market for one of the world's fastest growing and most important energy sources. Japan, long the world's leading consumer, investor, and distributor of liquefied natural gas (LNG) has seen its position overtaken by China. In 2021, China became the largest importer of LNG, and this year, according to data from BloombergNEF, China now has the most long-term LNG contracts, is expanding its LNG infrastructure, has a growing presence in markets traditionally dependent on trade with Japan — such as Qatar and Malaysia — and is even increasing imports from the United States and Australia. For countries like Malaysia, Qatar, and Australia, China's growth has been responsible for nearly all of their increase in LNG exports over the past five to seven years. And China's role is expected to increase as the country expands its LNG port infrastructure and carrier fleet, putting it in direct competition with Japan's major LNG importers, including utilities like Jera and Osaka Gas and trading houses Mitsui, Mitsubishi Corp., Marubeni, Sumitomo and Itochu. 'We still believe that more LNG growth is coming from China,' said Ziyue Daniela Li, a senior associate with BloombergNEF's Asia-Pacific gas team. The potential impacts are varied. Japanese companies, long accustomed to being the sole bidder for long-term contracts, could see themselves outbid by China. Traders, on the other hand, may see increased competition and cost-cutting when reselling LNG. That competition will inevitably create winners and losers among those firms, but when it comes to curbing emissions, there is no victory to be found. Indeed, China's growth, alongside Japan-led investments in LNG power plants, ports, and pipelines in South and Southeast Asia, is almost certainly going to lead to increased fossil fuel production, just as scientists implore the world to shift away, rapidly, from all dirty energy sources. Energy security With few fossil fuel sources of its own, Japan has long been dependent on imports to fuel its power plants, factories and transportation infrastructure. Japan has among the highest net energy imports of any OECD country, at 87.2%, compared to 35.8% for India and 69.8% for Germany. 'Japan doesn't have a lot of its own natural resources,' said Yuriy Humber, the founder of Japan NRG, a Tokyo-based energy intelligence company. 'So Japan has to be able to plan its own energy needs in a rather conservative way to ensure that, in case of emergency, (like) a sudden surge in demand, it's able to fulfill its own sort of energy needs.' The Negishi LNG Terminal, which is jointly operated by Tokyo Gas and Jera, in Yokohama. From 1969 until 2021, Japan was largely the biggest importer of LNG on an annual basis. | Reuters After the end of World War II, coal and petroleum imports were the main sources of energy. But that would change in 1969, when the first ship transported LNG from Alaska to Japan. Japan has been hooked ever since. Over the next three decades, Japan would build the world's largest LNG infrastructure, and it became the largest consumer of the fossil fuel, with Indonesia and Malaysia being its primary sources in the early days. In fact, many credit Japan's rapid economic growth in the late 20th century to the ready availability of cheap LNG. 'Japan is not only a big importer, but (its) companies are important players in the (international/global) LNG trade sector,' said Humber. From 1969 until 2021, Japan was largely the biggest importer of LNG on an annual basis, with growth picking up after the March 2011 meltdown at the Fukushima No. 1 nuclear plant led to the country's entire nuclear fleet being shut down. Japan was able to maintain stable LNG prices due to its ability to sign medium- and long-term contracts, which was most clear when LNG prices spiked globally — but not in Japan — after Russia's invasion of Ukraine in early 2022. Japanese companies and state-backed agencies like the Japan Bank for International Cooperation (JBIC) and the Japan Organization for Metals and Energy Security (JOGMEC) play a key role in natural gas and LNG projects around the world, providing loans and concessionary finance for gas production and export infrastructure projects in Mexico, Malaysia, and Australia, among others. A tanker transporting LNG is tugged toward a thermal power station in Futtsu, Chiba Prefecture. After the end of World War II, coal and petroleum imports were Japan's main sources of energy. But that would change in 1969, when the first ship transported LNG from Alaska to Japan. | Reuters 'LNG has a lot of positives,' said Filippo Pedretti, an assistant researcher at Japan NRG. 'It's easily deployable, cheap, and seen as a cleaner source of energy compared to oil and coal, and Japan believes LNG can be a useful source towards transitioning towards a cleaner economy.' Wesley Morgan, a research associate at the Institute for Climate Risk and Response at UNSW Sydney, believes that Australia's massive LNG expansion in the past decade would not have been possible without Japan. 'Energy security anxieties in Japan mean a tendency to see Australian gas as essential for energy supply,' Morgan said. 'Japanese investment is really crucial in propping up Australia's gas exports.' China's LNG growth In many ways, China's economic rise and growing energy demand echoes Japan's past, with energy security concerns related to the Russia-Ukraine war also playing a role, says Pedretti. 'China's LNG development strategy is trying to follow a similar path to Japan,' said Pedretti. 'They try to diversify sources, build domestic infrastructure, but their situation is also different as they have their own gas resources and buy pipeline gas from Russia and Turkmenistan.' A LNG tank at Tokyo Gas' LNG terminal in Sodegaura, Chiba Prefecture. Japan has been increasingly pushing LNG as a transition fuel in South and Southeast Asia, touting it as a low-carbon alternative to coal. | Reuters China's rise in this market came just as Japan peaked. According to the International Energy Agency, Japan's LNG imports began falling in 2015, due to less energy demand from a shrinking population, greater energy efficiency, and more power generation from solar and wind. Though the potential growth of data centers and energy for AI might change projections, many believe that LNG demand in Japan is in long-term decline. But because of long-term contracts, which can be as long as 25 years, this has created a challenge, as companies like Jera now have more LNG than their customers in Japan need. One way to deal with that is to offload excess LNG to other countries. In fact, through initiatives like the Asia Zero Emissions Community (AZEC), Japan has been increasingly pushing LNG as a transition fuel in South and Southeast Asia, touting it as a low-carbon alternative to coal. This has allowed Japanese companies to not only offload excess capacity, but also benefit from exporting gas turbines, pipelines and LNG terminal technology. 'Japan is aggressively promoting the expansion of LNG-fired power in Southeast Asia,' said Evan Gach, a program coordinator at the Tokyo-based nonprofit Kiko Network. He's concerned that this could result in 'environmental destruction ... and increased greenhouse gas emissions in Asia.' Many in the Japanese government have touted LNG as a cleaner alternative to oil and coal because it produces fewer emissions when burned for electricity. But scientists have urged the world to ween itself off of all fossil fuels, and recent studies have raised questions over whether LNG is even cleaner than coal when accounting for its lifetime emissions, including pollution resulting from its transportation, methane emissions and the liquefaction process to reduce its volume. 'It's a historic bet on a dangerous fossil fuel,' said Morgan of UNSW Sydney. 'We can shift straight from coal to wind, solar and batteries without the need for LNG.' Tanker trucks carrying LNG from a terminal cross the Xihoumen Bridge in Zhoushan, China. While Japan still has the largest number of LNG import terminal capacity and regasification facilities, China has many under construction and could overtake Japan in both categories by 2030. | Reuters Thus far, China has not been a destination for much of Japan's excess LNG. In fact, China might also pose a threat in this area. In the not-so-distant future, China may also find itself locked into too many long-term LNG contracts and might also seek to re-export LNG abroad. 'Ultimately, slower LNG demand in China and more aggressive reselling by Chinese traders may only exacerbate oversupply and margin erosion for LNG investors,' wrote Sam Reynolds, a research lead at the Institute for Energy Economics and Financial Analysis. Chinese companies are increasingly expanding their capability as traders. While Japan still has the largest number of LNG import terminal capacity and regasification facilities, China has many under construction and could overtake Japan in both categories by 2030. Similarly, while Japan still has a larger LNG fleet, with 175 carriers, China has the most ships on order, with 61. According to BloombergNEF, Chinese companies have also opened up LNG trading desks, competing directly with Japanese companies. 'Japan's presence will eventually diminish,' said Pedretti. 'They won't be able to grow, both in terms of shipping and as a trader. But I think Japan will try to keep its presence in the market.' Reselling LNG to Southeast Asia, Pedretti added, is key to that. Even if it does not control the market in the same way, Hiroshi Hashimoto, a senior fellow at the Institute of Energy Economics, Japan, a Tokyo-based think tank, does not see a shift away from domestic dependence on the fuel that has powered Japan's economy since 1969. 'Japan is expected to continue requiring LNG to maintain an appropriate balance of energy sources in its future energy mix,' said Hashimoto. 'LNG will not lose its role in Japan's future energy picture.'
Time of India
21-04-2025
- Business
- Time of India
Japan embraces lab-made fuels despite costs, climate concerns
For Japan 's largest utilities, lab-made fuels are a meaningful step toward greener energy that also extends the life of billions of dollars' worth of existing fossil-fuel infrastructure. For their critics, products like 'e-methane' and 'syngas' are not an attractive compromise but an expensive distraction, at a time when the country — already a climate laggard in global terms — should instead be accelerating its shift to renewable power. Eager to win over naysayers, companies like Electric Power Development Co. and Osaka Gas Co. have seized on this year's World Expo in Osaka, packing last week's launch event with mascots, virtual reality — and their plans to incorporate alternative fuels into existing systems. A transformation, they argue, can be achieved without compromising on energy security or the stability provided by their pipelines and fleet of power plants. 'The beauty of e-methane is that we can continue using our existing natural gas infrastructure,' said Yosuke Kuwahara, director of the carbon neutrality promotion office at Osaka Gas. The company showcased a small-scale facility producing what it called the 'gas of the future' at the sustainability-themed Expo, traditionally an opportunity for countries to showcase technological prowess. The gas is one of several synthetic fuels created through chemical processes and designed to replicate the properties of conventional fuels, with the added aim of making them easier to replenish and less polluting. Japan remains the most fossil-fuel reliant among the Group of Seven advanced economies, with low-carbon sources making up roughly a third of its energy mix. Its utilities have long justified their continued use of dirty fuels by saying large-scale solar and wind deployment is limited by the island-nation's geography, or that nuclear energy will take time to ramp up after a years-long hiatus due to safety concerns. Slowly introducing alternative fuels into the mix is 'a way to decarbonize,' said senior fellow with the International Environment and Economy Institute, Sumiko Takeuchi, who has advised the government on its energy strategy. By using plants already in service, that can be done with limited risk to the nation's power supply, she added. 'Gas of the Future'? Japanese utilities say e-methane is chemically almost identical to natural gas but is effectively carbon-neutral because of the environment-friendly way in which it's produced. At the Expo, Osaka Gas demonstrates how carbon dioxide captured from the venue's food waste can be blended with green hydrogen, made using renewable energy, to generate e-methane. On a larger scale, CO2 can be captured from landfills and factories to produce it for millions of customers, said Kuwahara. Osaka Gas is building an e-methane plant in Niigata and plans to substitute the fuel for 1% of the gas it delivers to households by 2030. Tokyo Gas Co. has a similar goal. Japan has said it may boost that to as much as 90% e-methane by mid-century, according to a 2023 presentation made by the Ministry of Economy, Trade and Industry. Burning e-methane, however, still releases the greenhouse gases it's composed of — meaning those planet-warming emissions must then be captured and stored. Without that last step, 'you just delay the emissions,' said Hiromitsu Miyajiri, a program coordinator with Kiko Network, a Japanese environmental group. 'It's not going to result in a reduction in emissions.' Costs are an even more pressing hurdle. When Japan's biggest power producer JERA Co. last year co-fired ammonia at its Hekinan coal plant, it reduced emissions by 20%. The ammonia was made with natural gas, but the company's goal is to eventually use renewables to create a green version of the fuel. JERA has since announced plans to use it commercially in 2030 and to switch over completely by 2050. But even a 50-50 blend of coal and ammonia made from natural gas would cost about double a power plant's revenue, according to an Asia Research & Engagement report released this month. JERA declined to discuss the costs of its project. Transition Delay At the heart of most objections, however, is the criticism that such experimentation will ultimately delay Japan's already tardy transition to low- or zero-carbon energy. Using gases like ammonia and hydrogen alongside fossil fuels in power plants may also increase different kinds of air pollution. Utilities should focus on shifting to renewables instead of pursuing strategies that prioritize existing infrastructure, said Michiyo Miyamoto, an energy finance specialist with the Institute for Energy Economics and Financial Analysis, which aims to accelerate the green transition. 'As a long-term strategy, it's really risky,' she said. Japan's utilities are pressing ahead, though. Electric Power Development Co., also known as J-Power, plans to install gasification systems at its Matsushima coal plant near Nagasaki by 2028. The technology mixes pulverized coal with oxygen to create syngas, from which hydrogen is extracted to generate power. Here too, the challenge will be to capture and store the carbon dioxide created in the process. The company is looking at underground storage sites in Japan and Malaysia, but that raises issues of leaks as well as local opposition, according to Mira Cordier, an analyst with Asia Research & Engagement. 'There are major uncertainties about technological and economic feasibility,' she wrote in an email. While J-Power won't disclose the project's costs, syngas is a key part of its plan to reach net zero by 2050, said Takashi Oikawa, deputy general manager for press relations. 'Thermal power plants will have to be decarbonized and that's what we are working toward,' Oikawa said, adding that does not mean shuttering the facilities. 'We will try to utilize them as long as possible by introducing new technology.'
Economic Times
21-04-2025
- Business
- Economic Times
Japan embraces lab-made fuels despite costs, climate concerns
The gas is one of several synthetic fuels created through chemical processes and designed to replicate the properties of conventional fuels, with the added aim of making them easier to replenish and less polluting. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads 'Gas of the Future'? Tired of too many ads? Remove Ads Transition Delay For Japan 's largest utilities, lab-made fuels are a meaningful step toward greener energy that also extends the life of billions of dollars' worth of existing fossil-fuel their critics, products like 'e-methane' and 'syngas' are not an attractive compromise but an expensive distraction, at a time when the country — already a climate laggard in global terms — should instead be accelerating its shift to renewable to win over naysayers, companies like Electric Power Development Co. and Osaka Gas Co. have seized on this year's World Expo in Osaka, packing last week's launch event with mascots, virtual reality — and their plans to incorporate alternative fuels into existing systems. A transformation, they argue, can be achieved without compromising on energy security or the stability provided by their pipelines and fleet of power plants.'The beauty of e-methane is that we can continue using our existing natural gas infrastructure,' said Yosuke Kuwahara, director of the carbon neutrality promotion office at Osaka Gas. The company showcased a small-scale facility producing what it called the 'gas of the future' at the sustainability-themed Expo, traditionally an opportunity for countries to showcase technological gas is one of several synthetic fuels created through chemical processes and designed to replicate the properties of conventional fuels, with the added aim of making them easier to replenish and less remains the most fossil-fuel reliant among the Group of Seven advanced economies, with low-carbon sources making up roughly a third of its energy mix. Its utilities have long justified their continued use of dirty fuels by saying large-scale solar and wind deployment is limited by the island-nation's geography, or that nuclear energy will take time to ramp up after a years-long hiatus due to safety introducing alternative fuels into the mix is 'a way to decarbonize,' said senior fellow with the International Environment and Economy Institute, Sumiko Takeuchi, who has advised the government on its energy strategy. By using plants already in service, that can be done with limited risk to the nation's power supply, she utilities say e-methane is chemically almost identical to natural gas but is effectively carbon-neutral because of the environment-friendly way in which it's the Expo, Osaka Gas demonstrates how carbon dioxide captured from the venue's food waste can be blended with green hydrogen, made using renewable energy, to generate e-methane. On a larger scale, CO2 can be captured from landfills and factories to produce it for millions of customers, said Gas is building an e-methane plant in Niigata and plans to substitute the fuel for 1% of the gas it delivers to households by 2030. Tokyo Gas Co. has a similar goal. Japan has said it may boost that to as much as 90% e-methane by mid-century, according to a 2023 presentation made by the Ministry of Economy, Trade and e-methane, however, still releases the greenhouse gases it's composed of — meaning those planet-warming emissions must then be captured and that last step, 'you just delay the emissions,' said Hiromitsu Miyajiri, a program coordinator with Kiko Network, a Japanese environmental group. 'It's not going to result in a reduction in emissions.'Costs are an even more pressing Japan's biggest power producer JERA Co. last year co-fired ammonia at its Hekinan coal plant, it reduced emissions by 20%. The ammonia was made with natural gas, but the company's goal is to eventually use renewables to create a green version of the fuel. JERA has since announced plans to use it commercially in 2030 and to switch over completely by even a 50-50 blend of coal and ammonia made from natural gas would cost about double a power plant's revenue, according to an Asia Research & Engagement report released this declined to discuss the costs of its the heart of most objections, however, is the criticism that such experimentation will ultimately delay Japan's already tardy transition to low- or zero-carbon energy. Using gases like ammonia and hydrogen alongside fossil fuels in power plants may also increase different kinds of air should focus on shifting to renewables instead of pursuing strategies that prioritize existing infrastructure, said Michiyo Miyamoto, an energy finance specialist with the Institute for Energy Economics and Financial Analysis, which aims to accelerate the green transition.'As a long-term strategy, it's really risky,' she utilities are pressing ahead, Power Development Co., also known as J-Power, plans to install gasification systems at its Matsushima coal plant near Nagasaki by 2028. The technology mixes pulverized coal with oxygen to create syngas, from which hydrogen is extracted to generate power. Here too, the challenge will be to capture and store the carbon dioxide created in the company is looking at underground storage sites in Japan and Malaysia, but that raises issues of leaks as well as local opposition, according to Mira Cordier, an analyst with Asia Research & Engagement.'There are major uncertainties about technological and economic feasibility,' she wrote in an J-Power won't disclose the project's costs, syngas is a key part of its plan to reach net zero by 2050, said Takashi Oikawa, deputy general manager for press relations.'Thermal power plants will have to be decarbonized and that's what we are working toward,' Oikawa said, adding that does not mean shuttering the facilities. 'We will try to utilize them as long as possible by introducing new technology.'
Time of India
21-04-2025
- Business
- Time of India
Japan embraces lab-made fuels despite costs, climate concerns
For Japan 's largest utilities, lab-made fuels are a meaningful step toward greener energy that also extends the life of billions of dollars' worth of existing fossil-fuel infrastructure. For their critics, products like 'e-methane' and 'syngas' are not an attractive compromise but an expensive distraction, at a time when the country — already a climate laggard in global terms — should instead be accelerating its shift to renewable power. Eager to win over naysayers, companies like Electric Power Development Co. and Osaka Gas Co. have seized on this year's World Expo in Osaka, packing last week's launch event with mascots, virtual reality — and their plans to incorporate alternative fuels into existing systems. A transformation, they argue, can be achieved without compromising on energy security or the stability provided by their pipelines and fleet of power plants. 'The beauty of e-methane is that we can continue using our existing natural gas infrastructure,' said Yosuke Kuwahara, director of the carbon neutrality promotion office at Osaka Gas. The company showcased a small-scale facility producing what it called the 'gas of the future' at the sustainability-themed Expo, traditionally an opportunity for countries to showcase technological prowess. The gas is one of several synthetic fuels created through chemical processes and designed to replicate the properties of conventional fuels, with the added aim of making them easier to replenish and less polluting. Japan remains the most fossil-fuel reliant among the Group of Seven advanced economies, with low-carbon sources making up roughly a third of its energy mix. Its utilities have long justified their continued use of dirty fuels by saying large-scale solar and wind deployment is limited by the island-nation's geography, or that nuclear energy will take time to ramp up after a years-long hiatus due to safety concerns. Slowly introducing alternative fuels into the mix is 'a way to decarbonize,' said senior fellow with the International Environment and Economy Institute, Sumiko Takeuchi, who has advised the government on its energy strategy. By using plants already in service, that can be done with limited risk to the nation's power supply, she added. 'Gas of the Future'? Japanese utilities say e-methane is chemically almost identical to natural gas but is effectively carbon-neutral because of the environment-friendly way in which it's produced. At the Expo, Osaka Gas demonstrates how carbon dioxide captured from the venue's food waste can be blended with green hydrogen, made using renewable energy, to generate e-methane. On a larger scale, CO2 can be captured from landfills and factories to produce it for millions of customers, said Kuwahara. Osaka Gas is building an e-methane plant in Niigata and plans to substitute the fuel for 1% of the gas it delivers to households by 2030. Tokyo Gas Co. has a similar goal. Japan has said it may boost that to as much as 90% e-methane by mid-century, according to a 2023 presentation made by the Ministry of Economy, Trade and Industry. Burning e-methane, however, still releases the greenhouse gases it's composed of — meaning those planet-warming emissions must then be captured and stored. Without that last step, 'you just delay the emissions,' said Hiromitsu Miyajiri, a program coordinator with Kiko Network, a Japanese environmental group. 'It's not going to result in a reduction in emissions.' Costs are an even more pressing hurdle. When Japan's biggest power producer JERA Co. last year co-fired ammonia at its Hekinan coal plant, it reduced emissions by 20%. The ammonia was made with natural gas, but the company's goal is to eventually use renewables to create a green version of the fuel. JERA has since announced plans to use it commercially in 2030 and to switch over completely by 2050. But even a 50-50 blend of coal and ammonia made from natural gas would cost about double a power plant's revenue, according to an Asia Research & Engagement report released this month. JERA declined to discuss the costs of its project. Transition Delay At the heart of most objections, however, is the criticism that such experimentation will ultimately delay Japan's already tardy transition to low- or zero-carbon energy. Using gases like ammonia and hydrogen alongside fossil fuels in power plants may also increase different kinds of air pollution. Utilities should focus on shifting to renewables instead of pursuing strategies that prioritize existing infrastructure, said Michiyo Miyamoto, an energy finance specialist with the Institute for Energy Economics and Financial Analysis, which aims to accelerate the green transition. 'As a long-term strategy, it's really risky,' she said. Japan's utilities are pressing ahead, though. Electric Power Development Co., also known as J-Power, plans to install gasification systems at its Matsushima coal plant near Nagasaki by 2028. The technology mixes pulverized coal with oxygen to create syngas, from which hydrogen is extracted to generate power. Here too, the challenge will be to capture and store the carbon dioxide created in the process. The company is looking at underground storage sites in Japan and Malaysia, but that raises issues of leaks as well as local opposition, according to Mira Cordier, an analyst with Asia Research & Engagement. 'There are major uncertainties about technological and economic feasibility,' she wrote in an email. While J-Power won't disclose the project's costs, syngas is a key part of its plan to reach net zero by 2050, said Takashi Oikawa, deputy general manager for press relations. 'Thermal power plants will have to be decarbonized and that's what we are working toward,' Oikawa said, adding that does not mean shuttering the facilities. 'We will try to utilize them as long as possible by introducing new technology.'
Japan Times
21-04-2025
- Business
- Japan Times
Japan embraces lab-made fuels despite costs and climate concerns
For Japan's largest utilities, lab-made fuels are a meaningful step toward greener energy that also extends the life of billions of dollars' worth of existing fossil-fuel infrastructure. For their critics, products like "e-methane' and "syngas' are not an attractive compromise but an expensive distraction, at a time when the country — already a climate laggard in global terms — should instead be accelerating its shift to renewable power. Eager to win over naysayers, companies like Electric Power Development and Osaka Gas have seized on this year's World Expo in Osaka, packing last week's launch event with mascots, virtual reality and their plans to incorporate alternative fuels into existing systems. A transformation, they argue, can be achieved without compromising on energy security or the stability provided by their pipelines and fleet of power plants. "The beauty of e-methane is that we can continue using our existing natural gas infrastructure,' said Yosuke Kuwahara, director of the carbon neutrality promotion office at Osaka Gas. The company showcased a small-scale facility producing what it called the "gas of the future' at the sustainability-themed expo, traditionally an opportunity for countries to showcase technological prowess. The gas is one of several synthetic fuels created through chemical processes and designed to replicate the properties of conventional fuels, with the added aim of making them easier to replenish and less polluting. Japan remains the most fossil-fuel reliant among the Group of Seven advanced economies, with low-carbon sources making up roughly a third of its energy mix. Its utilities have long justified their continued use of dirty fuels by saying large-scale solar and wind deployment is limited by the island nation's geography, or that nuclear energy will take time to ramp up after a yearslong hiatus due to safety concerns. Slowly introducing alternative fuels into the mix is "a way to decarbonize,' said Sumiko Takeuchi, senior fellow with the International Environment and Economy Institute, who has advised the government on its energy strategy. By using plants already in service, that can be done with limited risk to the nation's power supply, she added. 'Gas of the future'? Japanese utilities say e-methane is chemically almost identical to natural gas but is effectively carbon-neutral because of the environment-friendly way in which it's produced. At the expo, Osaka Gas demonstrates how carbon dioxide captured from the venue's food waste can be blended with green hydrogen, made using renewable energy, to generate e-methane. On a larger scale, CO2 can be captured from landfills and factories to produce it for millions of customers, said Kuwahara. Osaka Gas is building an e-methane plant in Niigata Prefecture and plans to substitute the fuel for 1% of the gas it delivers to households by 2030. Tokyo Gas has a similar goal. Japan has said it may boost that to as much as 90% e-methane by mid-century, according to a 2023 presentation made by the Ministry of Economy, Trade and Industry. Burning e-methane, however, still releases the greenhouse gases it is composed of — meaning those planet-warming emissions must then be captured and stored. Without that last step, "you just delay the emissions,' said Hiromitsu Miyajiri, a program coordinator with Kiko Network, a Japanese environmental group. "It's not going to result in a reduction in emissions.' Costs are an even more pressing hurdle. When Jera, Japan's biggest power producer, co-fired ammonia at its Hekinan coal plant in Aichi Prefecture last year, it reduced emissions by 20%. The ammonia was made with natural gas, but the company's goal is to eventually use renewables to create a green version of the fuel. Jera has since announced plans to use it commercially in 2030 and to switch over completely by 2050. But even a 50-50 blend of coal and ammonia made from natural gas would cost about double a power plant's revenue, according to an Asia Research & Engagement report released this month. Jera declined to discuss the costs of its project. Transition delay At the heart of most objections, however, is the criticism that such experimentation will ultimately delay Japan's already tardy transition to low- or zero-carbon energy. Using gases like ammonia and hydrogen alongside fossil fuels in power plants may also increase different kinds of air pollution. Utilities should focus on shifting to renewables instead of pursuing strategies that prioritize existing infrastructure, said Michiyo Miyamoto, an energy finance specialist with the Institute for Energy Economics and Financial Analysis, which aims to accelerate the green transition. "As a long-term strategy, it's really risky,' she said. Japan's utilities are pressing ahead, though. Electric Power Development, also known as J-Power, plans to install gasification systems at its Matsushima coal plant in Nagasaki Prefecture by 2028. The technology mixes pulverized coal with oxygen to create syngas, from which hydrogen is extracted to generate power. Here too, the challenge will be to capture and store the carbon dioxide created in the process. The company is looking at underground storage sites in Japan and Malaysia, but that raises issues of leaks as well as local opposition, according to Mira Cordier, an analyst with Asia Research & Engagement. "There are major uncertainties about technological and economic feasibility,' she wrote in an email. While J-Power won't disclose the project's costs, syngas is a key part of its plan to reach net zero by 2050, said Takashi Oikawa, deputy general manager for press relations. "Thermal power plants will have to be decarbonized and that's what we are working toward,' Oikawa said, adding that does not mean shuttering the facilities. "We will try to utilize them as long as possible by introducing new technology.'
