Japan to speed up investment in energy transition
The Japanese government is working on domestic guidelines for local financial institutions providing climate transition finance, as part of efforts to create an efficient environment on energy transition investment in the run-up to 2050.
The government's financial services agency, the trade industry (Meti) and environmental ministries, have jointly drafted guidelines on transition finance for Japanese financial institutions as part of the government's effort to accelerate energy transition and achieve its 2050 decarbonisation goal. The draft guidelines are targeted for official release in early May following a month-long public consultation.
Tokyo plans to set up working groups in the April 2021-March 2022 fiscal year and put together a detailed transitional roadmap for each industry that emits heavy greenhouse gases (GHG), including steel, chemical, power, gas and shipping, to decarbonise their operations towards 2050. The steel industry, Japan's biggest GHG emitting industry, has pledged to achieve a decarbonisation by 2050 in line with the government's target.
Japan's domestic guideline has been drafted in accordance with the climate transition finance handbook published in December by the International Capital Market Association (ICMA) to provide clear guidance to capital market participants when raising funds in debt markets for climate transition-related purposes. Heavy GHG-emitting manufacturers are expected to face a difficulty in utilising green financing instruments, including green bonds, which are designed to finance carbon-neutral projects. But these manufacturers can facilitate transitional loans and bonds, for example, when moving to greener operations.
Tokyo is also considering supporting energy transition in the Asian market, particularly developing and Asean nations, upon the completion of its clear guideline on transition financing. Meti plans to back exports of Japan's low-carbon technology in the power sector, including development of renewable power, and ammonia- and hydrogen-fired power capacity, as well as an LNG shift and carbon capture utilisation and storage.
Japanese shipping firm K Line last month signed the country's first transition finance agreement to partially fund the construction of the LNG-fuelled car carrier Century Highway Green. The firm's ¥5.9bn ($54mn), 14-year loan was arranged by Japanese banks Mizuho Bank and Sumitomo Mitsui Trust Bank.
Japanese debt watcher Japan Credit Rating Agency has evaluated the eligibility for transition finance in line with ICMA's guidelines, including whether the project could achieve sufficient CO2 reductions and meet the International Maritime Organization's (IMO) emissions reduction requirement for the global shipping industry. The IMO has set a 2050 target to reduce the global shipping industry's GHG emissions by 50pc and carbon intensity by 70pc from 2008 levels.
Related news posts
New technologies aim to boost SAF production
New technologies aim to boost SAF production
London, 26 April (Argus) — A likely rise in global demand for sustainable aviation fuel (SAF), underpinned by mandates for its use, is encouraging development of new production pathways. While hydrotreated esters and fatty acids synthesised paraffinic kerosine (HEFA-SPK) remains the most common type of SAF available today, much more production will be needed. The International Air Transport Association (Iata) estimated SAF output at around 500,000t in 2023, and expects this to rise to 1.5mn t this year, but that only meets around 0.5pc of global jet fuel demand. An EU-wide SAF mandate will come into effect in 2025 that will set a minimum target of 2pc, with a sub-target for synthetic SAF starting from 2030. This week the UK published its domestic SAF mandate , also targeting a 2pc SAF share in 2025 and introducing a power-to-liquid (PtL) obligation from 2028. New pathways involve different technology to unlock use of a wider feedstock base. US engineering company Honeywell said this week its hydrocracking technology, Fischer-Tropsch (FT) Unicracking, can be used to produce SAF from biomass such as crop residue or wood and food waste. Renewable fuels producer DG Fuels will use the technology for its SAF facility in Louisiana, US. The plant will be able to produce 13,000 b/d of SAF starting from 2028, Honeywell said. The company said its SAF technologies — which include ethanol-to-jet , which converts cellulosic ethanol into SAF — have been adopted at more than 50 sites worldwide including Brazil and China. Honeywell is part of the Google and Boeing-backed United Airlines Ventures Sustainable Flight Fund , which is aimed at scaling up SAF production. German alternative fuels company Ineratec said this week it will use South African integrated energy firm Sasol's FT catalysts for SAF production. The catalysts will be used in Ineratec's plants, including a PtL facility it is building in Frankfurt, Germany. The plant will be able to produce e-fuels from green hydrogen and CO2, with a capacity of 2,500 t/yr of e-fuels beginning in 2024. The e-fuels will then be processed into synthetic SAF. Earlier this month , ethanol-to-jet producer LanzaJet said it has received funding from technology giant Microsoft's Climate Innovation Fund, "to continue building its capability and capacity to deploy its sustainable fuels process technology globally". The producer recently signed a licence and engineering agreement with sustainable fuels company Jet Zero Australia to progress development of an SAF plant in north Queensland, Australia. The plant will have capacity of 102mn l/yr of SAF. Polish oil firm Orlen formed a partnership with Japanese electrical engineering company Yakogawa to develop SAF technology . They aim to develop a technological process to synthesise CO2 and hydrogen to form PtL SAF. The SAF will be produced from renewable hydrogen as defined by the recast EU Renewable Energy Directive (RED II) and bio-CO2 from biomass boilers, Orlen told Argus . By Evelina Lungu Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Start-ups to help Total keep output stable in 2Q
Start-ups to help Total keep output stable in 2Q
London, 26 April (Argus) — TotalEnergies said it expects its oil and gas production to hold broadly steady in the second quarter as planned maintenance is partially offset by rising output from new projects in Brazil and Denmark. The company expects to average 2.4mn-2.45mn b/d of oil equivalent (boe/d) in April-June, compared with 2.46mn boe/d in the previous three months and 2.47mn boe/d in the second quarter of 2023. Production is being supported by the restart of gas output from the redeveloped Tyra hub in Denmark late last month and the start of the 180,000 b/d second development phase of the Mero oil field on the Libra block in Brazil's Santos Basin at the beginning of the year. TotalEnergies first-quarter output was flat compared with the previous three months but 2pc lower than a year earlier as a result of Canadian oil sands divestments. The company reported a robust set of first-quarter results today, broadly in line with analysts' expectations. Profit for the first three months of 2024 was $5.7bn, compared to $5.6bn in the same period last year. Adjusted profit — which takes into account inventory valuation effects and special items — came in at $5.1bn, down by 22pc on the year but slightly ahead of the consensus of analysts' estimates of $5bn. Adjusted operating profit from the firm's Exploration & Production business was down by 4pc year-on-year at $2.55bn, driven in part by lower natural gas prices. The Canadian oil sands asset sales weighed on the segment's production but this was partly compensated by start-ups. As well as Mero 2, the Akpo West oil project in Nigeria started production during the first quarter. TotalEnergies' Integrated LNG segment saw a 41pc year-on-year decline in its adjusted operating profit to $1.22bn in January-March. The company said this reflects lower LNG prices and sales. But while its LNG sales for the quarter fell by 3pc in year-on-year terms, its LNG production was greater by 6pc. TotalEnergies achieved an average $78.9/bl for its liquids sales in the first quarter, an improvement on $73.4/bl a year earlier. But the average price achieved for its gas sales was 43pc lower on the year at $5.11/mn Btu. In the downstream, the company's Refining & Chemicals segment's first-quarter adjusted operating profit was $962mn in January-March, down by 41pc on the year but 52pc higher than the preceding quarter. TotalEnergies attributes the quarter-on-quarter rise to higher refining margins and a rise in refinery throughput . For the second quarter, it expects refinery utilisation rates to be above 85pc, compared with 79pc in the first quarter, boosted by the restart of 219,000 b/d Donges refinery in France. Total's Integrated Power segment continued to improve, registering a quarter-on-quarter and year-on-year increased of 16pc and 65pc respectively in its adjusted operating profit to €611mn. Net power production increased 14pc year-on-year to 9.6 TWh, while the company's portfolio of installed power generation capacity grew 54pc to 19.5GW. Total's cash flow from operations, excluding working capital, was down by 15pc on a year earlier at $8.2bn in the first quarter. The company has decided to raise its dividend for 2024 by 7pc to €0.79/share and plans a $2bn programme of share buybacks for the second quarter. By Jon Mainwaring Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japanese gas utilities to sell more city gas in 2024-25
Japanese gas utilities to sell more city gas in 2024-25
Osaka, 26 April (Argus) — Japanese gas utilities are expecting city gas demand from their customers to rebound in the April 2024-March 2025 fiscal year, after warmer than normal weather reduced the use of the heating fuel in 2023-24. Japan's largest gas retailer by sales Tokyo Gas forecast on 25 April that its city gas sales will increase to 11.422bn m³ for 2024-25, up by 1.1pc from a year earlier. Sales to the household sector are predicted to grow by 3.4pc to 2.8bn m³, after unusually warm weather during the summer and winter of 2023-24. Supplies to the industry and commercial users are also anticipated to edge up by 0.3pc to 8.6bn m³ during the period. The optimistic outlook came after a 10.1pc year-on-year fall in city gas sales for 2023-24. Tokyo Gas sold around 2.7bn m³ of city gas, down by 2.8pc from a year earlier, to the household sector to meet weaker weather-driven demand. Sales to the industry sector plunged by 20.1pc to 4.7bn m³ because of slower operations at their customers, while wholesale sales dropped by 3.2pc to 1.56bn m³. The falls more than offset a 2.3pc rise to 2.3bn m³ in the commercial sector where hotter than normal summer weather boosted city gas demand for cooling purposes. Tokyo Gas forecast temperatures in its service area to average 16.4°C in 2024-25, down from the previous year's 17.5°C. Fellow gas retailer Toho Gas forecast its city gas sales to increase by 1.2pc from the previous year to 3.4bn m³ in 2024-25, with supplies to residential users rising by 5.6pc to 595mn m³ and sales to the industry and commercial sectors edging up by 0.3pc to 2.8bn m³. The company sold 3.37bn m³ of city gas in 2023-24, down by 2.4pc from a year earlier, pressured by the warmer weather. City gas sales by Saibu Gas are expected to rise by 2.3pc from a year earlier to 940mn m³ in 2024-25. The company expanded sales by 3pc to 919mn m³ in 2023-24. Possible increased city gas sales in 2024-25 would increase demand for its main feedstock of LNG. But the 2024-25 sales forecast by Tokyo Gas and Toho Gas would remain lower compared with their 2022-23 sales. Japan's city gas production in 2022-23 totalled 35bn m³, which required 25.5mn t of LNG, according to trade and industry ministry data. By Motoko Hasegawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japan’s JBIC to finance Chilean copper mine development
Japan’s JBIC to finance Chilean copper mine development
Osaka, 26 April (Argus) — Japan is enhancing its financial support for the development of copper mines in Chile, as part of efforts to increase its self-efficiency of base metals. State-owned Japan Bank for International Co-operation (JBIC) on 25 April signed a $248mn loan agreement with Chile-based joint-venture Compania Minera Arqueros (CMAQ) to finance development of its Arqueros copper project in Chile. CMAQ is 80pc owned by Japanese copper producer Nittetsu Mining and 20pc by Chilean firm Fondo de Inversion Privado Talcuna. The load will be co-financed by other Japanese private-sector financial firms, including Sumitomo Mitsui Banking, Mizuho Bank and MUFG Bank. The total co-funding will be $355mn. CMAQ plans to use the funding to develop Arqueros, located 35km northeast of La Serena. The mine is expected to produce 1.8mn t/yr of crude ore and 55,000 t/yr of copper concentrates for 15 years. The company aims to start operations in 2026. Nittetsu is to secure all the output from the project. The latest deal follows last month's loan agreement by JBIC and other financial institutes to provide $2.5bn to develop the Centinela copper mine in Chile . Japan relies on all its copper concentrates demand from imports, which has prompted the government to secure long-term and stable supplies of copper resources. The country's strategic energy plan has a target to achieve at least an 80pc self-sufficiency for base metals, including copper, by 2030. By Motoko Hasegawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more