Japanese gas utilities see greater role for natural gas, CCUS in 2050 supply

Japanese city gas utilities expect natural gas and carbon capture, utilization and storage (CCUS) to play a greater role in their gas supply in 2050, as the government has designated gas as "an important energy source" even after achieving carbon neutrality.

The city gas utilities now aim to boost their share of CCUS in the gas supply to 10%-50% in 2050 while also reviewing the share of e-methane and hydrogen, the Japan Gas Association said in its Gas Vision 2050 released on June 3.

The 10%-50% share of the gas supply in 2050 is expected to come from measures such as carbon capture and storage (CCS), carbon capture and utilization (CCU), forest absorption, bioenergy with carbon capture and storage (BECCS) and J-Credit.

The move followed the Japanese cabinet's Feb. 18 approval of the 7th Strategic Energy Plan -- the country's principal energy policy -- which designates natural gas as "an important energy source" even after achieving carbon neutrality in 2050.

The city gas utilities now expect e-methane and biogas to account for 50%-90% of the gas supply in 2050, with direct hydrogen supply making up "several percent," the JGA said in its Gas Vision 2050.

Demand uncertainty

Speaking at a press conference in Tokyo, JGA Chairman Takashi Uchida said that the components of the gas supply in 2050, when carbon neutrality is achieved, will depend on the advancement of technological innovations.

When asked about Japan's 2050 gas supply outlook, Uchida said that the JGA has not released such an outlook because it sees scenarios of both increasing and decreasing gas supply by then.

He cited uncertainty over the progress of fuel switching from coal and oil to gas as a factor that could increase demand, while demand could also decrease due to a declining population and the introduction of energy-conserving equipment.

"In other words, since there are both positive and negative factors, it can be simply stated that there won't be a significant increase or decrease [in gas supply]," Uchida said.

Commenting on the 2050 share of e-methane and biogas, Uchida said it would vary depending on the advancement of technological developments, as e-methane and biogas currently cost "several times" more than LNG.

E-methane

On the revised share of hydrogen, Uchida said the JGA considered situations abroad, including in Europe, where hydrogen was once seen as a solution for carbon neutrality in the heating sector but is now considered difficult to promote widely.

"However, the reason it doesn't reach zero is that I believe there are still areas of demand where hydrogen could be used," he added.

The latest gas vision compares with a 2050 carbon neutrality action plan released in June 2021, which had expected e-methane to account for 90% of the gas supply, with biogas and other decarbonization methods accounting for 5% and direct hydrogen use making up the remaining 5%.

The city gas utilities now aim to introduce at least 1% of e-methane, or synthetic methane -- which is produced from CO2 and hydrogen as a raw material for city gas -- and biogas into city gas sales in fiscal year 2030-31 (April-March).

To offset CO2 emissions from the use of e-methane, the JGA is currently working to ensure that its use is recognized as carbon-neutral internationally.

It aims for e-methane to be counted as zero CO2 emissions in the Intergovernmental Panel on Climate Change's Guidelines for National Greenhouse Gas Inventories, "Volume 6: Carbon Dioxide Capture, Transport, Utilization and Storage," which is expected to be formulated in 2027-28.