[USA] ADNOC sells first blue ammonia cargo to Japan's Itochu

On August 3, 2021, Abu Dubai National Oil Company (ADNOC), the state-owned oil company of the UAE, announced that, in partnership with Fertiglobe, it had sold its first blue ammonia cargo to Itochu in Japan to be used in fertilizer production.[1] The agreement builds upon the Japanese Ministry of Economy, Trade and Industry's (METI) first fuel ammonia deal in cooperation with ADNOC in January 2021 to support the development of new UAE-Japan blue ammonia supply chains. Blue ammonia can be used as a low-carbon fuel in many different industrial applications, including transportation, power generation, and steel production, among other things. As a carrier fuel for hydrogen, which is hard to transport in its natural state, blue ammonia is expected to play an important part in Japan’s ongoing efforts to decarbonize its industrial sector.

In a statement, Masaya Tanaka, Executive Officer of Itochu Corp, said, "Starting with this trial of blue ammonia for fertilizer applications, we aim to create a wide range of ammonia value chains for existing industrial applications as well as future energy use. By collaborating with ADNOC and Fertiglobe, we expect to initiate and enhance our industrial portfolio in the fertilizer sector while achieving our commitments towards decarbonization activities in other industries."

Fertiglobe, a 58:42 partnership between Dutch chemicals company OCI and ADNOC, will produce blue ammonia at its Fertil plant in the Ruwais Industrial Complex in Abu Dhabi for delivery to ADNOC's customers in Japan. The Fertil plant has a production capacity of 1.2 million mt/year of ammonia and 2.1 million mt/year of urea. While the plant produces ammonia that is usually defined as “grey” ammonia, it will be fitted with CO2 liquefaction units. CO2 will then be transferred to and reinjected into underground reservoirs by the ADNOC Al Reyadah carbon capture and storage (CCUS) plant to enable the production of blue ammonia.

[1] https://www.adnoc.ae/en/news-and-media/press-releases/2021/adnoc-and-fertiglobe-partner-to-sell-uaes-first-blue-ammonia

[Japan] Japan to bolster transition to LNG in Asian countries

The Ministry of Economy, Trade and Industry (METI) held a meeting of experts on February 19, 2021 and indicated a policy that would support the introduction of liquefied natural gas (LNG) in Asian countries. [1] The Japanese government plans to encourage the introduction of LNG infrastructure not only at LNG thermal power plants but also at LNG receiving bases and liquefaction facilities. Additionally, the Japanese government plans to support the gradual decarbonization efforts of Asian countries.

Coal is a major source of energy for countries such as Indonesia and Vietnam due to its affordability. According to the METI, a shift from coal to LNG in seven Asian countries—India, Indonesia, Vietnam, the Philippines, Malaysia, Thailand, and Myanmar—would reduce carbon emissions by about 864 million tons and increase LNG demand by 16 million tons. According to the minister of METI, increased demand for LNG in other Asian countries will lead to higher levels of production by countries in the region and may lower procurement costs of the energy source. Japan is the world’s largest LNG consumer and relies on LNG for nearly 40% of total power production. The country’s main suppliers are Australia, Qatar and the United States, but Japan is hoping to expand production in Asian countries. The increased effort to reduce purchasing costs and guarantee LNG supply follows an unseasonably cold winter which coincided with depleted LNG stocks.

[1] https://www.japantimes.co.jp/news/2021/02/23/business/lng-coal-energy/

[Japan] Japan and U.S. to conduct a study on methane hydrate extraction in Alaska

On September 9, 2020, a Japanese government source said Japan and the U.S. will conduct a year-long joint study in northern Alaska starting in April 2021 to produce gas from methane hydrate in permafrost.[1] Methane hydrate, an ice-like substance in which a large amount of methane is trapped within a crystal structure of water, is seen as a potential alternative source of energy to traditional fossil fuels. Reserves of methane hydrate have been confirmed to be in the seabed of Japan’s coastal water.

The joint study will be conducted by Japan Oil, Gas and Metals National Corporation and the U.S. National Renewable Energy Laboratory. They plan to conduct another test to manufacture methane gas in the Pacific in fiscal 2023 or later. According to the source, the Ministry of Economy, Trade and Industry (METI) is set to allocate funds in its request for the fiscal 2021 budget. The study comes as Japan plans a project aimed at commercializing the use of methane hydrate from Japan’s coastal waters by March 2028. Tokyo is trying to strengthen the development of its domestic energy resources while also promoting the use of wind power and other renewable sources. Tokyo is seeking to strengthen the development of domestic energy resources such as methane hydrate, while promoting the use of wind power and other renewable resources.

[1] https://www.japantimes.co.jp/news/2020/09/10/national/japan-methane-hydrate-alaska/

[Japan] METI and MLIT Held the First Meeting of the Public-Private Council on the Enhancement of Industrial Competitiveness for Offshore Wind Power Generation

On July 17, 2020, the Ministry of Economy, Trade, and Industry (METI) and the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) jointly held the first meeting of the Public-Private Council on the Enhancement of Industrial Competitiveness for Offshore Wind Power Generation. In the meeting, the Council members discussed the state of wind power generation utilization in Japan and the potential challenges for expanding offshore wind power generation in the mid- to long-term.

Japan aims to increase the total share of wind energy generation from the current level of approximately 0.7% to 1.7% by 2030 as part of Japan’s 5th Strategic Energy Plan.[1] Under the Act of Promoting Utilization of Sea Areas in Development of Power Generation Facilities Using Maritime Renewable Energy Resources, which was enacted in April 2019, METI and MLIT have been making progress in designating sea areas for wind energy projects to achieve this goal.[2]

METI and MLIT established the council to collaborate with industry members to advance the systematic and continuous introduction of offshore wind power generation. The council also seeks to enhance Japan’s industrial competitiveness, build up domestic industrial clusters, and develop the infrastructure environment for the wind power generation industry. The council members consist of Japanese utility companies, including Kyuden Mirai Energy (Headquarters: Fukuoka Prefecture), TEPCO Renewable Power (Headquarters: Tokyo), and other major companies in the manufacturing, construction, and financial sectors.

During the first meeting, the council underscored the importance of enhancing the industrial competitiveness of the offshore wind power sector and reducing costs in order to make offshore wind power one of the main energy sources in Japan. The key measure discussed at the council meeting was to increase the investment in wind power generation. Currently, the lack of certainty in the wind generation market outlook is prohibiting investors from actively engaging in the sector. The council is committed to continue the dialogue with industry members to identify areas for public private collaboration to reduce investment obstacles, and to strengthen infrastructure, R&D, human resources, and public engagement.[3]

[1] The 5th Strategic Energy Plan, which sets Japan's long-term energy policy towards 2050, was approved by the Cabinet on July 3, 2018.  It includes Japan’s plans to maintain coal-fired generation to support the nation’s stable energy supply while phasing out inefficient coal-fired power plants.
The English version of the 5th Strategic Energy Plan can be accessed from METI’s website: https://www.meti.go.jp/english/press/2018/pdf/0703_002c.pdf

[2] Act of Promoting Utilization of Sea Areas in Development of Power Generation Facilities Using Maritime Renewable Energy Resources aims to promote the utilization of wind power generation through measures such as the formulation of basic policies, designating maritime areas as targets of promotion projects, creating a certification system for plans related to the licensed use of such designated maritime areas.

[3] https://www.meti.go.jp/shingikai/energy_environment/yojo_furyoku/001.html

[Japan] The Japanese Cabinet Approved the FY 2019 Annual Report on Energy (Japan’s Energy White Paper 2020)

On June 5, 2020, the Japanese Cabinet approved the Fiscal Year 2019 Annual Report on Energy, known as “Japan’s Energy White Paper 2020”, which was created by the Agency for Natural Resources and Energy (ANRE) under the Ministry of Economy, Trade and Industry (METI). In accordance with Article 11 of the Basic Act on Energy Policy (Act No. 71 of 2002), ANRE publishes and submits the white paper to the National Diet on an annual basis. It highlights the current energy trends in domestic and global markets, and provides a general overview of the major initiatives that were implemented in the previous fiscal year.

The FY 2019 Japan’s Energy White Paper emphasizes the following areas:

· The progress of the recovery and reconstruction in Fukushima Prefecture, such as supporting the victims of the nuclear accident, cleaning up contaminated water, and decommissioning of the Fukushima Daiichi Nuclear Power Plant

· Japan’s measures to strengthen the resilience of the energy infrastructure to the potential risks of damage by natural disasters, such as improving regional power networks

· Japan’s implementation of global warming countermeasures in accordance with the Paris Agreement

The White Paper also discusses the impact of COVID-19 on the global oil market and highlights the importance of ensuring a stable international crude oil market. In addition, it compares the current progress and situation of Japan’s CO2 emission reduction efforts to meet greenhouse gas reduction targets with the progress made by the European Union (EU) and other major countries, including the United Kingdom, the United States, France, and Germany. It notes that Japan ranked No. 1 in the G7 reduction rate of demand-based CO2 emissions from 2013 to 2015.[1] [2] [3] [4]

[1] https://www.meti.go.jp/press/2020/06/20200605002/20200605002-2.pdf

[2] https://www.oecd.org/sti/ind/carbondioxideemissionsembodiedininternationaltrade.htm

[3] https://www.meti.go.jp/press/2020/06/20200605002/20200605002.html

[4] https://www.meti.go.jp/english/press/2020/0605_001.html

[Japan] Japan’s Ministry of Economy, Trade, and Industry Issued an Interim Report on the Post-2020 Infrastructure Systems Export Strategy

On May 21, 2020, Japan’s Ministry of Economy, Trade, and Industry (METI) announced that the Roundtable Panel for the Post-2020 Infrastructure Systems Export Strategy had published its interim report. The interim report includes the results of discussions from the two sessions held by the panel on April 24, 2020 and May 11, 2020. The panel discussed Japan’s current position in the global market. The panel also discussed strategies for promoting the export of electricity and energy infrastructure systems moving forward, considering the global economy, environmental issues, and the new challenges introduced by COVID-19. The panel consists of members from industry, government, and experts in the fields.

The report noted that access to a stable electricity supply is increasing in global importance. In the short-term, the outbreak of COVID-19 has accelerated the digitalization of society as more people work remotely and rely on online services, which has increased the demand for electricity. In the medium to long term, the electricity demand will continue to grow primarily in the Asia Pacific due to regional population and economic growth.

There will be a shift to renewable energy and distributed energy resources globally. However, it is expected that many emerging countries will continue to rely on fossil fuels to meet their electricity demand. The report also noted that the market environment for sustainable energy solutions will become increasingly competitive as the interest in SDGs (Sustainable Development Goals) rises. 

Recognizing the increasing competition in the global market, the report provided a potential approach for the Japanese government and industry to support energy and electricity infrastructure systems exports. It addressed the importance of strengthening public and private partnerships in order to put forward projects that cater towards each country’s energy and sustainability goals in terms of technology solutions, infrastructure, capacity building, and financing. The report recommends that Japanese industry members should accelerate their renewable energy systems exports and focus on Japan’s competitive areas, such as offshore wind and consumer energy solutions. The report also identified other potential areas for opportunities, including hydrogen utilization, CCS (Carbon Capture and Storage), energy efficiency, and advanced coal fired technologies.[1] [2] [3]

[1] https://www.meti.go.jp/press/2020/05/20200521001/20200521001-1.pdf

[2] https://www.meti.go.jp/press/2020/05/20200521001/20200521001.html

[3] https://www.meti.go.jp/english/press/2020/0521_003.html

[Japan] Japan, the EU and the United States Announced a Joint Statement on Cooperation on Hydrogen and Fuel Cell Technologies

On June 15, 2019, the Ministry of Economy, Trade and Industry of Japan (METI), the European Commission Directorate-General for Energy (EC, ENER) and the U.S. Department of Energy (US DOE) announced a joint statement on future cooperation on hydrogen and fuel cell technologies, promising to enhance the mutual cooperation among the three counties/regions. Japan, the EU, and the U.S. have been contributing to various efforts to develop hydrogen and fuel cell technologies for more than 30 years, and are global leaders in this field.

While the three governmental organizations have already been working with other countries through various international collaborations and partnerships, they decided that this new collaboration will advance the research on hydrogen and fuel cell technologies. They will pursue how to effectively develop and implement a cooperation framework, based on their energy consensus on hydrogen technology. The framework would possibly be created through a memorandum of cooperation (MOC) in preparation for the 2nd Hydrogen Energy Ministerial Meeting, which will be held on September 25, 2019.

The proposed MOC would promote the development and deployment of hydrogen and fuel cell technologies, focusing on specific aspects under the “Tokyo Statement”, which was released at the Second Hydrogen Energy Ministerial Meeting held on October 23, 2018. These include promoting technical cooperation and harmonizing regulations, codes, and standards; facilitating international joint research and development on hydrogen, sharing information on hydrogen safety and the supply chain; investigating and studying hydrogen’s potential for reducing CO2 emissions and other emissions; and supporting communication, education, and outreach.

[Japan] Ministry of Economy, Trade and Industry Continues the Sale of Non-Fossil Fuel Energy Certificates

On March 25, 2019, Japan’s Ministry of Economy, Trade and Industry (METI) announced that it would continue selling non-fossil fuel energy certificates in Fiscal Year 2019. In May 2018, METI began to issue the certificates to certify electricity generated by renewable energy sources under the Feed-in-Tariff (FIT) Scheme for Renewable Energy, and established a non-fossil fuel energy trading market, which allows retail electricity providers (REPs) to purchase certificates representing the non-fossil fuel value.

If REPs sell electricity with the non-fossil fuel energy certificates, it is considered as renewable energy, which enables energy users to utilize their compliance with RE 100, an initiative launched by the Climate Group of the United Kingdom (UK) and the CDP, which is championing the use of 100% renewable energy for electricity for business operations.[1] The Climate Group of the UK, which seeks to accelerate action on climate change, is committed to work with global leaders and enterprises to tackle climate change.[2] CDP is a British non-profit organization that provides a discussion platform for companies, states, and investors to control their environmental impacts.

In February 2019, METI conducted a demonstration project in collaboration with many REPs and power producers to identify the origin of renewable energy sources based on their non-fossil energy value, as well as to confirm that it would be able to improve the FIT scheme. The non-fossil fuel energy trading market aims to encourage electric buyers to achieve the target ratio of non-fossil fuel energy set by the Act on the Promotion of Use of Non-Fossil Energy Sources and Effective Use of Fossil Energy Materials by Energy Suppliers.[3] 

[1] http://there100.org/

[2] https://www.theclimategroup.org/about

[3] https://www.meti.go.jp/press/2018/03/20190325005/20190325005.html

[Japan] Kansai Electric Power and Caulis’ Demonstration Project to Detect Unauthorized Bank Account was Approved under the Regulatory Sandbox Scheme

On March 6, 2019, the Ministry of Energy, Trade and Industry (METI), Government of Japan, approved a demonstration project to detect unauthorized activities on opening bank accounts through the internet, by using financial and electricity data under the Act of Special Measures for Productivity Improvement. The demonstration project is being developed by Kansai Electric Power (KEPCO) and Caulis, a Japanese cyber security solutions company[1]. The project will examine the viability of a new technology which is designed to effectively detect unauthorized activities on opening bank accounts at the Seven Bank[2] by combining financial information with electricity data collected from KEPCO’s electric facilities.

The objective of the project is to explore the cooperation between electricity companies and IT security providers in order to address social security problems. The results of the project will also shape the framework and regulations that promote the adoption of innovative technologies in businesses. The Act of Special Measures for Productivity Improvement entered into force on June 6, 2018. Under the Act, the Scheme for Demonstration of New Technologies, namely the Regulatory Sandbox Scheme, will encourage companies to adopt new technologies and innovative business models.[3]

[1] https://caulis.jp/en/#contact

[2] https://www.sevenbank.co.jp/corp/

[3] https://www.kepco.co.jp/souhaiden/pr/2019/0306_1j.html

[Japan] Japan’s Agency for Natural Resources and Energy Released a Revised Strategic Roadmap for Hydrogen and Fuel Cells

On March 12, 2019, the Agency for Natural Resources and Energy under Japan’s Ministry of Economy, Trade, and Industry (METI) released a revised version of the Strategic Roadmap for Hydrogen and Fuel Cells. The revised strategic roadmap sets new specifications and cost breakdowns for basic hydrogen and fuel cell technologies, and provides goals and measures to promote the utilization of hydrogen resources and optimize hydrogen supply chains. The strategic road map aims to reduce the costs of hydrogen technologies considerably, accelerate the research and development of hydrogen and fuel cell technologies, explore potential markets for hydrogen electricity, and facilitate cooperation with other countries. The Agency for Natural Resources and Energy will host an expert working group to review the current progress of the achievements and implementation in the areas depicted in the roadmap.

The Strategic Road Map for Hydrogen and Fuel Cells was first released in 2014 and revised in 2016. The Agency developed three policy documents after the release of the strategic road map. The Basic Hydrogen Strategy was published in December 2017, the Fifth Strategic Energy Plan was released in July 2018, and the Tokyo Statement was issued in October 2018. Based on the strategic road map and these related policy documents, the Japanese government will promote public education about hydrogen and fuel cell technologies, and will seek cooperation with experts, academia, and other countries like the U.S. and France, in order to advance research activities and develop a legal framework.

[Japan] The Ministry of Economy, Trade and Industry Initiated a Working Group on Electricity Resilience

The Ministry of Economy, Trade and Industry (METI) announced that it will initiate a Working Group on Electricity Resilience on October 9, 2018. The working group was jointly established by the Electricity and Gas Basic Policy Subcommittee under the Electricity and Gas Industry Committee of the Advisory Committee for Natural Resources, and the Electric Power Safety Subcommittee under the Industrial Safety and Consumer Product Safety Committee of the Industrial Structure Council.

The 2018 Hokkaido Eastern Iburi Earthquake caused a large-scale power outage in the Hokkaido region. The local residents, the utility company, and the government worked together to reduce their energy usage in response to the situation. On September 18, the operation of Tomato-Atsuma Coal-Fired Power Plant Unit 1 resumed, which stabilized the electricity supply and demand. 

METI established a third-party committee under the Organization for Cross-regional Coordination of Transmission Operators, Japan (OCCTO)[1] to identify the cause of the large-scale power outage and develop preventative measures for the future. An interim report is expected to be published by the end of October 2018. Meanwhile, the Ministerial Council on Emergency Inspection of Critical Infrastructure has decided to inspect the critical infrastructures across Japan, including electricity facilities, in November 2018 and will then develop measures to improve critical infrastructure resiliency. In order to accomplish these goals, METI has established a Working Group on Electricity Resilience to discuss challenges and possible measures to enhance the resiliency of Japan’s electricity infrastructure, and to establish a disaster-resilient electricity supply system.

[1] OCCTO is an organization that aims to promote the development of electricity transmission and distribution networks in Japan, which are necessary for cross-regional electricity use and the enhancement of the nationwide function of adjusting the supply-demand balance of electricity.

[Japan] The Ministry of Economy, Trade and Industry Launched a Study Group on the Ideal Approaches to New Electricity Platforms that Take Advantage of Next-Generation Technologies

On October 9, 2018, the Ministry of Economy, Trade and Industry (METI) announced that it would establish a Study Group on the Ideal Approaches to New Electricity Platforms that Take Advantage of Next-Generation Technologies. The working group will discuss the potential for next generation technologies to improve Japan’s electricity grid.

Japan’s electricity grid is facing challenges such as reduced earnings due to sluggish demand, the need to implement measures to modernize aging facilities, the need to improve the resiliency of electricity systems to prepare for large-scale disasters, and efforts to utilize renewable energy as a major power source. In order to deal with these challenges, METI aims to enhance the existing electricity grid in the “3E” areas (energy security, economic efficiency, and environment), while utilizing the existing system to its full potential.

In order to address 3E, the new electricity grid is expected to have 1) multiple inexpensive electricity supply sources, operated by new business models such as ERAB[1] and peer-to-peer (P2P) to advance economic efficiency; 2) IoT systems and data processing to improve energy security through the supply and demand management; and 3) new distributed resources such as EV and storage batteries that can achieve low carbonization and are more environmentally friendly than existing grid.

These investments require significant time and resources. Therefore, METI’s study group will discuss the risks and challenges with experts to identify necessary actions for the successful transition of the electricity grid.

[1] ERAB refers to a business framework in which businesses utilize virtual power plants and the demand response program in order to provide a variety of services, including electricity adjustments, maintaining supply-demand balances, electricity-rate cuts, avoidance of output controls and other measures to their electricity customers.

[Japan] Japan’s METI Released the 2018 Energy White Paper

On June 8, 2018, Japan’s Ministry of Economy, Trade and Industry (METI) Agency for Natural Resources and Energy released its FY 2017 Annual Report on Energy. The Annual Report on Energy (also known as the “Energy White Paper”) provides the status of Japan's energy policy measures and is submitted annually to the Diet as a requirement of Article 11 of the Basic Act on Energy Policy.

The Energy White Paper provides the current state of energy security, an outline of the energy measures that Japan achieved in FY2017, and current trends in energy policy and energy supply and demand. The 2017 White Paper covers the following topics: Japan’s history of energy usage since the Meiji Restoration; progress in decommissioning the unit 1-4 reactors at the Fukushima Daiichi Nuclear Power Station and the status of the station’s reconstruction; and the energy situation within and outside of Japan, including the potential challenges to achieving Japan’s goals for its 2030 energy mix, as well as the expectations for future challenges up to 2050.

The Energy White Paper is developed based on Japan’s Strategic Energy Plan, which is the national energy policy that sets the vision and strategies to meet Japan’s long-term energy needs, according to the Energy Policy Act of 2002. METI’s Advisory Committee for Natural Resources and Energy released the outline for the 5th Strategic Energy Plan on April 27, 2018, which is further described in the JEPIC newsletter article " Ministry of Economy, Trade and Industry (METI) released the outline for Japan’s Strategic Energy Plan." [1]

*The English language outline of the Energy White Paper 2018 has been released on METI’s website.[2]

[1] http://www.meti.go.jp/press/2018/06/20180608005/20180608005.html

[2] http://www.meti.go.jp/english/press/2018/pdf/0608_001a.pdf

[Japan] Ministry of Economy, Trade and Industry (METI) released the outline for Japan’s Strategic Energy Plan

METI’s Advisory Committee for Natural Resources and Energy released the outline for the 5th Strategic Energy Plan on April 27, 2018. The outline reviews Japan’s progress towards its energy outlook by 2030, which was set in the Long-Term Energy Supply and Demand Outlook[1] published in 2015. The outline also considers Japan’s longer-term vision for energy supply and demand by 2050. The Strategic Energy Plan is the national energy policy that sets the vision and strategies to meet Japan’s long-term energy needs, based on the Energy Policy Act of 2002.

The outline acknowledges the progress made to date since Japan’s current Strategic Energy Plan was enacted in 2014 and pledges to further boost the measures currently in place. Japan will continue to rely on nuclear energy as an important zero-emission baseload energy source, however, the country will reduce its dependency on nuclear energy by promoting energy efficiency, renewable energy, and efficient thermal power generation. According to the outline, Japan expects that 44% of its generation mix will be zero-emission sources by 2030, which it will achieve by re-starting nuclear power plants and increasing renewable energy. Japan will advance its energy technologies, such as IoT, AI, and big data, and will integrate multiple business operators and systems, as part of a plan to enhance energy conservation by 2030. The outline sets several long-term goals to achieve by 2050, such as expanding renewable energy, reducing reliance on nuclear energy, combining advanced technologies to develop high efficiency distributed energy systems, and replacing low-efficiency coal-fired power plants with more high-efficiency coal fired power plants, as part of the process to transition Japan into a decarbonized society.[2]

[1] http://www.meti.go.jp/english/press/2015/pdf/0716_01a.pdf

[2] http://www.enecho.meti.go.jp/committee/council/basic_policy_subcommittee/026/pdf/026_009.pdf