What Will It Take For Japan To Achieve Carbon Neutrality by 2050?

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What Will It Take For Japan To Achieve Carbon Neutrality by 2050?

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Japan prepares to host this year’s G7 meeting in light of public criticism for its lack of decarbonisation progress and a continued obsession with fossil fuels. However, the country is now uniquely positioned to prove its critics wrong. Doing so will unleash various positives, both for Japan and the region.

19 February 2023 – by Viktor Tachev   Comments (0)

Japan aims to become carbon neutral by 2050. However, considering its progress so far and the decarbonisation strategy in place, the goal looks unrealistic. And while failing on its targets is bad, even worse is the fact that Japan has been actively fuelling the climate crisis by backing fossil fuel projects at home and in other climate-vulnerable countries. Now, it’s time for the country to rise to the occasion and take the leadership role the world needs.

How Is Japan Fueling the Climate Crisis?

Japan is the fifth-largest CO2 emitter globally. While it is natural to assume that one of the most innovative countries would be willing to explore ways to limit its impact on the climate, the reality is the exact opposite.

Exploring Options That Will Extend the Life of Fossil Fuels

In the past year, Japan has made several steps toward extending the use of fossil fuels.

The country has started communicating the idea of “clean coal” technologies. In a nutshell, it aims to blend coal with ammonia. However, the co-firing plans will use blue ammonia, which won’t help reduce emissions. On top of that, the country targets an ammonia-coal co-firing rate of more than 50% by 2030

Japan is also pushing ahead to become the leading hydrogen-based economy. However, as previously reported, it will mostly use blue hydrogen. According to experts, hydrogen, as a whole, remains a widely untested technology, and the viability of green hydrogen remains questionable.

The emphasis on hydrogen and other untested technology distracts Japan from investing in cleaner and proven energy sources like solar and wind. Paired with the massive role fossil fuels continue to play in the country’s energy mix (an 88% share in total power generation), it will retain its role as a major emitter. Steps like these will take Japan further away from its goal of becoming carbon-neutral by 2050.

Funding Fossil Fuel Projects at Home and Abroad

Japan needed much convincing before it finally agreed to end overseas coal financing at the G7 meeting. However, even after that, the country continued to finance coal projects abroad in countries like Bangladesh and Indonesia, remaining the world’s largest provider of public fossil fuel finance, according to Fossil Free Japan.

Top 12 G20 DFI Supporters of Fossil Fuels Compared to Renewable Energy, Annual Average 2018-2020, USD Billions, Source: Fossil Free Japan
Top 12 G20 DFI Supporters of Fossil Fuels Compared to Renewable Energy, Annual Average 2018-2020, USD Billions, Source: Fossil Free Japan

The Japanese link to overseas coal support is also evident on the corporate level. Private Japanese financial institutions and Japan’s Government Pension Investment Fund have historically been among the biggest coal industry lenders. Even today, Japanese banks continue to fund coal projects abroad.

After the 2022 G7 meeting, Japan finally joined the rest of the group in agreeing to phase down coal. However, the wording was unclear, and the commitments lacked the necessary sense of urgency since no definite date was set. Domestically, the country still operates 167 coal plants, with four under construction and an additional three mothballed. Seven projects in total have been cancelled or retired.

And while Japan’s public support for overseas coal is now ending, its strategy is moving towards LNG. In 2022, the country became the world’s biggest LNG importer. It also plans to boost investments in upstream LNG projects. Japanese companies remain among the leading overseas investors in such projects.

The Risks For Japan

Japan’s decarbonisation strategy surfaces various risks both for the country and the Asia region.

Japan Risks Failing to Become Carbon Neutral By 2050

According to scientists, to meet the Paris goal, OECD countries must phase out coal by 2030.  

Still, Japan’s proposed energy mix for 2030 will have coal playing a significant part (19%). LNG will be holding 20%.

Japan's Proposed Energy Mix in 2030, Source: SP Global
Japan’s Proposed Energy Mix in 2030, Source: SP Global

Climate Action Tracker finds Japan’s decarbonisation progress and strategy insufficient. With its current plans, the country is on track for emission reduction levels of between 28% and 33%. This is way below its 46% target by 2030, which is unambitious. As a result, Japan will struggle to become carbon neutral by 2050.

International Criticism and Public Scrutiny

Japan’s decarbonisation strategy is eroding its credibility in the eyes of the public. 

In the past year, public and private Japanese financing institutions have been subject to criticism for their fossil fuel support. Under pressure from the public and conscious investors, the institutions left several projects.

Japan also struggled to end its dependence on Russian fossil fuels, remaining one of the top importers throughout the year. The imports continue, even today. According to reports, Japanese companies have been among the main contributors to Russia’s state budget in the past year.

Japan's Overall Rating, Source: Climate Action Tracker
Japan’s Overall Rating, Source: Climate Action Tracker

Japan’s transition bond programs have also surfaced transition bond greenwashing concerns. Meanwhile, the public has seen signs of greenwashing and a lack of honesty in Japan’s decarbonisation strategy.

Furthermore, civil society groups are urging Japan to stop backing fossil fuels and false solutions and instead prioritise renewables. Japanese tech companies have also been exposed for their lack of decarbonisation progress.

Ensuring a Future of Energy Dependence and High Power Costs

Aside from distancing itself from the goal of becoming carbon neutral by 2050, Japan’s continued reliance on fossil fuels and alternative power solutions, including hydrogen and ammonia, deepen its energy dependency problem.

Today, the country meets nearly 100% of its coal needs with imports from Indonesia and Australia. Overall, Japan relies on imports to meet 96% of its energy needs. As a result, it remains one of the top fossil fuel supporters in the G20.

The country plans to import significant amounts of ammonia for its co-firing projects. Domestic production won’t be sufficient to meet the hydrogen plans, and the government plans to import up to 80% of the total demand by 2050.

Japan’s energy independence score is just 13.7% – among the lowest in Asia. Furthermore, the national primary energy output and consumption ratio is 11.2%, compared to 60.7% for the EU

As a result of this import dependence, Japan’s power costs hit new highs in 2022. In September, Japanese power companies all hit the annual limit for rate hikes to pass on higher fuel costs. And while the government has tried to tame the situation through subsidies, their effect will be temporary. Due to the deeper roots of the problem, new energy hikes are expected later this year.

Climate Change Risk

Japan is consistently topping the charts for the countries with the highest climate change risk.

Over the past year, Tokyo experienced the longest streak of days with temperatures above 35°C since record-keeping began in 1875. High temperatures like these increase the risk of heat strokes for Japan’s ageing population. They also threaten food security and destroy the country’s coral reefs.

But, high temperatures are just a part of the problem.

As an island nation, the country is particularly vulnerable to rising sea levels. In 2012, Japan’s Ministry of Environment estimated that a 60-cm rise could see up to a 50% increase in the population living at or below sea level in Japan’s three largest bays, home to Japan’s four largest cities.

On top of this, Japan struggles massively with air pollution. As a result, deaths directly related to air pollution are continuously increasing. 

Japan Should Be Leading By Example

As one of the world’s wealthiest nations and among the most significant contributors to the climate crisis, Japan has a clear responsibility. It should end its support for fossil fuels and help countries transition to clean energy.

As the host of this year’s G7 meeting, all eyes will be on Japan to lead the world out of the energy crisis and ignite the spark to address climate change effectively. Doing so will protect its economy and position the country for green growth. Considering the country’s vast clean energy potential, the opportunity is there for the taking. A country of Japan’s standing can’t afford to miss it.

by Viktor Tachev

Viktor has years of experience in financial markets and energy finance, working as a marketing consultant and content creator for leading institutions, NGOs, and tech startups. He is a regular contributor to knowledge hubs and magazines, tackling the latest trends in sustainability and green energy.

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