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Japan's new climate pledge to boost renewable, nuclear share in 2030 energy mix

Highlights

Japan intends to boost renewable share with focus on solar by 2030-31

Plans include utilizing nuclear reactors with confirmed safety assurances

Japan should aim for $100/mt carbon price/tax by 2030: Tanaka

Tokyo — Renewables and nuclear power are set to account for at least 50% of Japan's generation mix by 2030-31 (April-March), following the premier's "ambitious" new greenhouse gas emissions reduction target, Minister of Economy, Trade and Industry Hiroshi Kajiyama said April 23.

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"Although I cannot say exactly at this moment, [the share] should be more than 50% of course," Kajiyama told a press conference when asked to comment on how much the share of renewable energy and nuclear power would be increased under the new target.

"We intend to increase renewable energy as much as possible, and nuclear power will also constitute the share, although there are nuclear [reactors] which have restarted, or not been restarted amid some issues over trust," Kajiyama said.

METI intends to see how much Japan can boost its renewable energy, with a focus on introducing more solar power in the country because of the limited time ahead of the 2030 deadline, even though the country faces a limitation on available flat land, Kajiyama said.

"As a decarbonizing source of electricity, nuclear power will also be utilized upon confirming safety," he added.

METI is currently reviewing its strategic energy plan, under which it is reviewing its 2030-31 energy mix. Under the current strategic energy plan, renewable energy is set to account for 22-24% of the current 2030-31 energy mix, with natural gas accounting for 27%, nuclear 20-22% and oil 3%.

Japan boosting renewables share in energy mix

Speedy nuclear restarts

Following the new greenhouse gas emissions reduction target, Japan will need to take "drastic policy actions" in the area of nuclear power and decarbonization, Nobuo Tanaka, former executive director of the International Energy Agency, told S&P Global Platts.

"On the supply side, restarts of nuclear [reactors] should be done in an extremely speedy manner," said Tanaka, adding that Japan needs a clear new vision on nuclear power to seek public support for the 46% CO2 emissions reduction.

Only nine nuclear reactors have been restarted in Japan under new regulatory standards introduced in 2013, with 21 nuclear reactors having been decommissioned after the 2011 Great East Japan Earthquake struck offshore Fukushima. It had 54 operable reactors at the time.

With the three nuclear reactors that were under construction prior to the earthquake, Japan could still operate up to 36 reactors after necessary approvals.

Carbon pricing

Tanaka, who is currently chairman of the steering committee of the Innovation for Cool Earth Forum (ICEF), said that the quickest and most effective means of accelerating Japan's decarbonization push would be to introduce a carbon price or carbon tax by 2030.

"Carbon price will be effective in the sense of casting the largest net, and it will be faster this way instead of tackling individual [sectors]," Tanaka said. "It is also better to show the roadmap early, which will also help developing the hydrogen economy."

Referring to METI's ongoing carbon pricing talks, which aim to formulate an outlook on the country's carbon pricing system by the end of 2021, Tanaka said Japan "should announce its target of $100/mt of carbon tax, or carbon price by 2030."

"Such a target of $100/mt carbon price in 2030, which would act as a standard to help [companies] making investment decision even when the hydrogen economy is being developed," Tanaka said.

By comparison, the UK's current Carbon Price Floor tax on generation is set at GBP18/mt CO2e ($22.93/mt). This is in addition to a new "cap and trade" UK Emissions Trading System, which has an auction floor price of GBP22/mt CO2e. Together, this equates to a cost on carbon from thermal generation of over $55/mt.

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Climate change summit

The METI minister's remarks came as Japanese Prime Minister Yoshihide Suga told the US-hosted climate change summit April 22 that the country aims to cut 46% of its greenhouse gas emissions by fiscal 2030-31 from the fiscal 2013-14 level, up from the 26% reduction target earlier.

"Japan aims to reduce its greenhouse gas emissions by 46% in fiscal year 2030 from its fiscal year 2013 levels, setting an ambitious target which is aligned with the long-term goal of achieving net-zero by 2050," Suga told the summit. "Furthermore, Japan will continue strenuous efforts in its challenge to meet the lofty goal of cutting its emissions by 50%."

Suga was among top Asian leaders attending US President Joe Biden's virtual climate summit.

The summit is a key platform for Biden to galvanize efforts by the major economies to tackle the climate crisis and marks a turning point in the global climate battle, with the US taking the lead.

The re-emergence of the US in tackling climate change is critical to how Asian countries frame the climate debate and create policies within their own borders. It also heavily influences the economic and political drivers that will require Asian countries to advance their own domestic climate policies