Japan hopes that new technological advances will enable it to catch up with the pack in the race to reach net zero, writes Yusuke Maekawa
Japan's new energy head acknowledges that the country will be running on bumpier roads than its western rivals in the race to be carbon neutral by 2050.
"Carbon neutral sounds beautiful but we need to go through a drastic transformation in our industrial structure, just like we experienced half a century ago," the new commissioner of trade and industry ministry Meti's natural resources and energy agency, Yoshifumi Murase, told Argus earlier this month. The oil crisis that shook the global economy in 1973 forced a drastic overhaul of resource-poor Japan's energy policy, and today's climate goals present a similar challenge for the country's economy, Murase says. "Japan is facing another serious crisis in terms of energy security. The government needs to change its policy to transform the conventional business model… and even transform our lifestyle," he says.
Japan remains heavily dependent on fossil fuels for power generation, it is falling behind in electrifying vehicles, and the share of renewables in its primary energy supply is the lowest among the G7 group and below the OECD average. Constraints on deployment of renewable power may make it impossible to reach net zero even with the utmost effort, Murase says. "That's how difficult the target is."
A series of former policy missteps highlights the disadvantages Japan faces in the shift to cleaner energy. It was the first country to launch a national hydrogen plan, but is now behind other advanced economies in terms of implementation. Japan is often seen as "winning at technology, losing in the market", a Meti official admits.
But Murase does see a technological advantage in the form of perovskite, the Japanese innovation for solar panel manufacture that uses iodine instead of conventional raw material silicon. According to Tokyo, it is a potential game changer for the mass distribution of domestic solar power. "Maximising renewable energy use is a challenge I'd like to take," Murase says. He began his role at Meti in July.
And energy diplomacy will be as critical for Japan in the energy transition as it has been over the past 50 years. "Maximisation of renewables won't be possible without critical minerals. It is therefore strategically important to secure them along with oil and gas," Murase says. Future energy diplomacy could even extend to technologies such as carbon capture and storage, with the prospect of storing greenhouse gas emissions abroad offering a "new concept of resource interests".
Wringing the rag
Further hope can be found in energy efficiency — a key part of Japanese legislation since the 1970s. "There are discussions that energy saving is like wringing the rag, but I believe there is still space for it," Murase says, adding that digitalisation and artificial intelligence could help the country manage its energy demand.
And technological advances in the form of fast reactors and small modular reactors could enhance the contribution of the nuclear sector, as Japan looks towards reopening more of the reactors it shut in the wake of the 2011 Fukushima disaster. But the natural resources and energy agency has yet to set a firm course of action for nuclear power or for other low-carbon energies. "There would be technologies that could be ousted, while others would get strengthened after we make [them a] priority," Murase says.
But the clock is ticking. Murase's first test is looming as Japan prepares the next round of its strategic energy plan, to be launched in 2024. Meti plans to again promote the role of hydrogen, using a new ¥2 trillion ($13.75bn) green innovation fund as a key source of finance. But policy to financially incentivise private-sector investment will also be key. The US' Inflation Reduction Act and the EU's green energy incentives are ringing alarm bells for Japan. "I'd like to address robust policy to support [Japan's economy], ensuring we do not fall behind them," Murase says.
