Energy transition in Japan and implications for gas
In October 2020, the then newly-appointed Japanese Prime Minister surprised the world, and many of his officials, by announcing a commitment for Japan to reach Net Zero by 2050. In April 2021, he strengthened the commitment by setting a 2030 target for reduction of greenhouse gas emissions of 46 per cent compared to 2013 levels. Net Zero and associated interim targets will be challenging for many countries, but are particularly challenging for Japan. Following the Fukushima nuclear accident in 2011, Japan’s nuclear power generation has been much reduced, resulting in significantly increased reliance on fossil fuels, notably coal and LNG.
In July 2021, Japan’s Ministry of Economy Trade and Industry (METI) published a draft revised Basic Energy Plan, which envisaged considerable reliance on restart of nuclear power generation to move towards these targets. Perhaps surprisingly, it did not consider any alternative scenarios. The plan was endorsed by the Japanese Cabinet in October 2021.
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This Insight explores potential pathways for Japan to move towards its ambitious targets, considering the METI plan alongside two of our own scenarios and considers the implications for LNG. Overall, the long term role of LNG is expected to decline, but there is considerable uncertainty around the speed of that decline, and that uncertainty will also have significant implications for the global LNG industry.
Read the insight here.
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