Transitioning Away from Fossil Fuels and Tripling RenewablesHow Should we Keep Pace with the COP28 Decision in Japan?

in Japanese

(originally released in Japanese on 18 December 2023)

COP28 took into account the IPCC report emphasis that GHG reductions of 43% by 2030 and 60% by 2035 (compared to 2019) are needed to achieve the 1.5°C target, and called countries to strengthen their reduction measures. Most notably, COP28 stated the goals of tripling the world's installed renewable energy capacity by 2030 and transitioning away from fossil fuels toward net-zero emissions by 2050.

COP decisions require unanimous approval by all participating countries, and this year's formal agreement document still contains weaknesses and loopholes, as pointed out by representatives of small island nations. But even so, what is needed now however, is not to delay the transition to renewables because of such loopholes, but to focus on the fact that for the first time ever in history, the transition from fossil fuels is explicitly stated, and to work earnestly for a policy shift that will enable the achievement of substantial GHG reductions by 2030 and 2035.

Strengthening Japan's Policies to Triple Renewable Energy

The tripling of renewables installed capacity by 2030, as called for by the COP28 decision, is a goal for the entire world. However, as noted in our comment released on 6 December¹, the emission reductions needed in Japan to achieve the 1.5°C target will require Japan to triple its capacity before 2035, if not by 2030.

The largest driver of global renewable energy expansion is solar power, and in 2023, many countries, including Europe, the U.S., and China, saw a significant increase in the amount of solar power installed over the previous year. In offshore wind development, another driving force, there were concerns that inflation would delay development, but governments are taking the necessary actions to get projects back on track.

Looking at the situation in Japan, although there has been some price decline in solar power generation, with the lowest bid price falling below 8 yen/kWh for the first time in the latest round of bidding, deployment has been stagnant due to increased output curtailment and other factors. In offshore wind power, which is expected to grow in the future, the bidding results announced in December showed that many companies bid at prices well below the 19 yen/kWh ceiling. These companies are assumed to sell power through corporate PPAs, which suggests that there is a high demand for renewable energy by private companies.

What is needed now by the government is to set high goals and to create an environment that allows the acceleration of renewable energy deployment through institutional and regulatory reforms. By eliminating the human-made obstacles, it should be possible to significantly lower the cost of renewable energy in Japan, which has already been achieved by the rest of the world. The measures necessary to accelerate solar power remain extremely inadequate, such as policies to encourage installation on rooftops of homes, buildings, and urban facilities, which are the future frontier for the deployment of solar power, and policies to promote the utilization of abandoned farmland coexisting in harmony with agriculture. Further institutional reforms are required to accelerate the development of offshore wind power, including floating wind turbines.

Cease the Government's Obsession with Fossil Fuels

The COP28 decision called for accelerated action to phase out fossil fuels through 2030. The current Sixth Strategic Energy Plan contains no mention of either "phasing out" or "transitioning away" from fossil fuels. What is stated is "decarbonization of fossil fuels”. In other words, the government's intent is to continue to use fossil fuels until 2050 while aiming to reduce emissions. To achieve this, particular emphasis is placed on policies that enable the use of CCS and the promotion of coal-ammonia co-firing power generation.

Revise the Heavy Reliance on CCS

The government's "Long-Term Roadmap for CCS" calls for relying on CCS to process a massive 120 to 240 million tons of CO₂ by 2050. In addition, the 2050 scenario presented in the study process of the Sixth Strategic Energy Plan indicates that 20-30% of electricity will be supplied by thermal power with CCS, and that more than 300 million tons of CO₂ will need to be sequestered annually, including use in other sectors such as the industrial sector. Although the COP28 decision mentions CCS as one of the reduction measures, it is mainly envisioned for hard-to-abate sectors where no other emission reduction measures are available. Just before COP28, the International Energy Agency (IEA) released a report urging the global oil and gas industry to decarbonize, and called the use of CCS to reduce emissions on a large scale "illusory”.

The Japanese government's CCS policy is unique in that it envisions large scale use of the technology and the use of CCS for a large percentage for electricity generation. Japan has no domestic CO₂ storage sites, and the government intends to export CO₂ to other countries for storage. Such a CCS policy by the Japanese government is unlikely to be feasible.

Stop the Promotion of Coal-ammonia Co-firing Power Generation

The COP28 decision called for increased efforts to phase-down unabated coal-fired power plants. IPCC defines "abated" as emission reductions of 90% or more². The company promoting coal-ammonia co-firing power generation aims to begin full-scale commercial operation of 20% ammonia co-firing by 2030 and 50% ammonia by 2040. In this case, the emission reduction rate would be only 20% or 50%, which is far from the level required by the IPCC. The IEA's net-zero scenario assumes that developed countries will phase out unabated coal-fired power generation by 2030.

The electricity generation cost for the planned co-firings are expensive, and the company promoting this is seeking the government's financial support. Providing public support for power plants that should be targeted for phase out would not be consistent with the COP decision. At COP, the U.S. also announced its participation in the Powering Past Coal Alliance (PPCA), which aims to eliminate coal-fired power generation, leaving Japan as the only G7 country that has not joined. The promotion of ammonia co-firing which prolongs the life of coal-fired power generation, should be ceased.

The government is trying to promote CCS and coal-ammonia co-firing to Southeast Asia as part of the Asian Zero Emissions Community (AZEC) concept, an international policy component of the GX Strategy. This has been strongly criticized by energy policy think tanks in other Asian countries as undermining the region's decarbonization³. Decarbonization in Asia should focus on utilizing the region's abundant renewable energy resources.

The Seventh Strategic Energy Plan Must Fundamentally Move Away from the Dependence on Fossil Fuels and Nuclear Power

Governments are required to submit new reduction targets (NDCs) by COP30 in 2025, and discussions on the formulation of the 7th Strategic Energy Plan will begin in Japan at the beginning of the year 2024. The 2014 Strategic Energy Plan, the first revision after the Great East Japan Earthquake, set the 2030 renewable energy target at an extremely low level of 22-24%, which was left unchanged in the 2018 revision. Although the 2021 revision raised the rate to 36-38%, it remains low compared to the levels of European countries.

All G7 countries except Japan are now aiming to fully decarbonize their electricity sectors by 2035, and are in fact approaching the point where they can actually look forward to achieving this goal. The lag in renewable energy development in Japan is not due to Japan's natural conditions as the government would like to use as an excuse. The government's own research shows that Japan has abundant renewable energy potential, particularly in solar and wind power. The fundamental reason for the slow deployment is the government's policy of continued use of fossil fuels and its insistence on restating nuclear power.

What is needed is to raise the renewable targets for 2030, 2035, and 2050, and to strengthen the power grid to meet these goals, reform the electricity system, introduce effective carbon pricing, and implement regulatory reforms across many ministries and agencies to be consistent with these targets. The public and private funds available in Japan are limited, and the decarbonization investments promoted by the GX Strategy should be used for globally tested decarbonization measures to promote the development of renewables and improving the power grid, not for technologies that help prolong the life of fossil fuels.

Regarding Japan's efforts in response to the COP28 decision, a METI negotiator reportedly said, "We are not aware of any need for further measures. " If the Japanese government proceeds with future energy and climate policy planning, including the revision of the Seventh Strategic Energy Plan from this perspective, it will further delay Japan's decarbonization, which even now is lagging behind. Not only will Japan fail to play its role in averting climate crisis, but Japanese companies that are required to decarbonize will face an uphill battle in international competition.

We must accelerate decarbonization by bringing together the joint efforts of Japanese companies, local governments, organizations and NGOs, and also by working with those in the government who are serious about making the energy transition. Renewable Energy Institute will continue to work actively to enable the shift from fossil fuels to renewables in response to the COP28 decision.