Japan to draft decarbonisation plan for heavy emitters

Japan's trade and industry ministry (Meti) is planning to work with the country's largest carbon-emitting industries to draft a detailed decarbonisation roadmap, as part of efforts to accelerate the shift to carbon neutrality.

Meti has selected seven of the country's main emitting sectors for an action plan towards the country's 2050 decarbonisation goal. Each of the seven industries — oil, power, gas, steel, cement, chemicals and paper pulp — requires a certain transition period and sizable investment as alternative production methods are not readily available for these industries to decarbonise.

The decarbonisation roadmap is expected to be drawn up in line with related government policies, such as the green growth strategy. It will also have a timetable for technology development and implantation, as well as targeted carbon dioxide (CO2) reduction volumes and estimated costs. It should be used as a reference by each company when working out a transition strategy and by financial institutions to judge eligibility for transition loans and bonds.

Meti plans to start the process this month, targeting to complete the roadmap for the seven sectors by April next year. The ministry, the environment ministry and the financial services agency last month officially released domestic guidelines on climate transition finance to help create an efficient environment on energy transition investment.

The seven industries and the shipping sector accounted for around 80pc of Japan's greenhouse gas (GHG) emissions, which hit a record low of 1.2bn t of CO2 equivalent during the April 2019-March 2020 fiscal year. Japan's 2019-20 emissions were also down by 14pc from the 2013-14 base year.

The government last year drew up a decarbonisation roadmap for the shipping industry. The transport ministry is now working to bring forward the planned 2028 launch of a first zero-carbon emitting vessel, most likely to be powered by ammonia, as the country's decarbonisation campaign gathers pace in response to a tougher 46pc GHG reduction pledge for 2030 compared with 26pc previously.

Japanese shipping firm K Line in March this year signed the country's first transition finance agreement to partially fund the construction of the LNG-fuelled car carrier Century Highway Green.

By Rieko Suda