Japan and a group of 10 other countries in Asia have agreed to pursue "practical pathways" for carbon neutrality through coordinated steps such as developing hydrogen supply chains and setting decarbonization standards while ensuring energy security.

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The agreement was reached as the group of 11 partner countries on March 4 formally launched the Asia Zero Emission Community, or AZEC, aimed at decarbonizing the region without sacrificing economic growth and energy security. The countries are Australia, Brunei, Cambodia, Indonesia, Japan, Lao, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

"This Asia Zero Emission Community is a platform with Asian countries striving for carbon neutrality through cooperation based on a mutual trust and sharing the concept toward decarbonization," Japan's Minister of Economy, Trade and Industry Yasutoshi Nishimura told a press conference following the inaugural AZEC ministerial meeting in Tokyo.

"Under this framework, we intend to cooperate in such areas of setting standards through policy coordination and support decarbonization technological developments and demonstration to help expand the new technology and reduce costs," Nishimura said.

Speaking at the ministerial meeting, Nishimura said: "For instance, we will look at forming masterplans for hydrogen and ammonia in Asia and set technological standards for CCS [carbon capture and storage] and confirm the importance of natural gas and LNG as transition energy."

The AZEC took shape following the initiative announced by Japanese Prime Minister Fumio Kishida in January 2022.

AZEC principles

The start of the AZEC platform comes when there are differences in how countries pursue carbon neutrality despite a broad consensus to aim for carbon neutrality, with Asia playing a key role in achieving climate goals set in the Paris Agreement.

The AZEC partners "recognize that the energy transition should allow for various and practical pathways tailored to meet the circumstances of each country, including in the Asian region which is experiencing rapid increases in the energy demand due to economic growth," the ministers said in a joint statement.

The AZEC partners also recognized the need to tackle climate change and advance cooperation towards carbon neutrality while ensuring energy security; promote the energy transition in a manner that is compatible with economic growth and resilience; and recognize "various and practical pathways" toward carbon neutrality depending on the circumstances of each country.

In his opening address at the ministerial meeting, Nishimura said: "One goal, various pathways" for carbon neutrality.

Through the AZEC platform, the countries will develop, demonstrate and deploy decarbonization strategies, businesses and technologies such as renewables, hydrogen, ammonia, carbon capture, utilization and storage. They will also provide financial support for investments in decarbonization infrastructure including the power grid and the development of clean energy supply chains including for critical minerals.

Hydrogen initiative

In a video address to the ministerial meeting, Kishida stressed the importance of a practical energy transition with such options as hydrogen and ammonia.

"This time we have decided to launch the first hydrogen supply chain" between Japan and Australia, Kishida said. "Moving forward, we intend to cooperate with Asian countries and develop wider supply chains."

Describing this as the first AZEC initiative to produce and consume hydrogen in Asia, Nishimura told the meeting that hydrogen not only helps accelerates decarbonization but also is increasingly becoming an "important tool" for enhancing energy security.

With the support of the Japanese government, a group of four Japanese companies comprising a Kawasaki Heavy Industries subsidiary, Iwatani, Electric Power Development Co., and Sumitomo will establish Japan's first hydrogen supply chain connecting Australia's Victoria state and Kawasaki in Tokyo Bay, Nishimura said.

The AZEC partners expect hydrogen and ammonia to play a key role in decarbonizing thermal power generation, the transportation sector and hard-to-abate industrial sectors.

Following a consensus at the meeting, the AZEC partners will follow up areas including enhancement of upstream developments of natural gas and LNG as a transition energy, with decarbonization measures such as CCS and conversion to hydrogen and ammonia.