Carbon50

Hydrogen cannot be Japan’s silver bullet in its decarbonization efforts

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Hydrogen cannot be Japan’s silver bullet in its decarbonization efforts

Japan is betting on Hydrogen to be a major contributor to its 2050 environmental goals. METI has a target of 10% of its power mix to be covered by power plants firing hydrogen/ammonia in 2050 and is also expecting hydrogen to be used for mobility applications. Understanding the physical limitations behind the hydrogen supply chain casts doubts on Japan’s strategy.

The efficiency of the hydrogen supply chain

The total efficiency of creating hydrogen by electrolyze and using it to generate power is close to 34%

A typical electrolyzer requires ~56kWh to create 1Kg of Hydrogen. Compressing it to 350bars requires ~2.7kWh. A CCGT firing 1Kg of hydrogen would generate ~20kWh
The total efficiency would therefore be ~34%. If the electrolyzer draws power from the grid, grid losses of ~3% would also have to be accounted for.

How green is “green” hydrogen?

Touted as a solution to decarbonizing the energy mix, “green” hydrogen fired power generation might not be as low carbon as expected. If we assume that the electrolyzer is powered by solar PV, then the carbon content of a kWh out of our hydrogen powered CCGT would be close to 250g/kWh (assuming 85g/kWh for solar PV) Powered by wind, it would be closer to 75g/kWh (assuming 26g/kWh for Wind). This does not account for the carbon content of manufacturing and maintaining the electrolyzer nor for the supply chain necessary to import the hydrogen in Japan.

For comparison, Japan’s current carbon content of electricity is ~450g/kWh. France’s is ~50g/kWh thanks to its high use of nuclear power.

Limited opportunities in mobility

In mobility applications the efficiency of the supply chain is even worse. A typical fuel cell generates 16kWh from 1Kg of hydrogen, bringing the total efficiency down to ~26%. An EV battery has an efficiency of ~82% (88% charge and 93% discharge). Hydrogen only makes sense for vehicles that needs a long range between charges or that cannot be immobilized for the time of the recharge.

Blue hydrogen

In December 2022 Japan signed cooperation agreements with Oman and Saudi Arabia on long-term procurement of blue hydrogen. This might be a good replacement solution to green hydrogen. It however comes with 2 major caveats.

  • Can CCUS be deployed at scale and fast enough to meet the world environmental goals?
  • And will natural gas supply be sufficient to generate enough hydrogen to power the ever growing economy promised by “green growth” proponents? A recent publication by The Shift Project, conducted under the supervision of the French Armed Forces, alerts on the risks of hitting “peak LNG” by ~2025 

Hydrogen will not save Japan

In an infinite world with no physical constraints on resources, in which renewable power assets could be deployed with no limitations, hydrogen could play a major role in power generation and mobility applications. But in today’s world, with increasing limitations on available resources, hydrogen use would be better limited to essential applications in which no serious low-carbon alternatives are available. Steel and fertilizers production would be at the top of the list. Japan plans to import hydrogen is only displacing its energy supply and decarbonization problems to other countries.

Japan is missing an opportunity to promote energy savings

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Japan is missing an opportunity to promote energy savings

With rising energy prices Japan seems to have forgotten its decarbonization goals and is missing on an opportunity to promote energy savings.

In April 2021 prime minister Suga announced his target of reducing CO2 emissions by 46% compared to 2013 levels. If the number “46%” was subject to debate, it fits into the 2050 “net-zero” target. To achieve these goals, Japan will have to reduce its emissions by ~4% by year, every year.

Prime minister Kishida’s government is now considering subsidizing utility firms to curb power prices as well as a subsidy scheme for gas. The Japanese government has already been subsidizing gasoline wholesalerssince January to reduce retail prices. What was supposed to be a temporary measure, reviewed weekly, was extended in April. According to Reuters, these measures aim at achieving real economic growth of 2%-2.5% this fiscal year.

These measures will keep demand high for fossil fuels, maintaining Japan CO2 emissions above target levels and failing to bring any sustainable solution to future energy crisis.

Instead, by letting the retail price of energy rise and by promoting energy savings measures Japan could not only make progress on its climate goals but also ensure that future volatility of prices and long-term scarcity of fossil fuels would have a lower impact on its economy and its population.

Japan could promote Energy saving measures similar to what France recently announced, including temperature limits in buildings, limiting cars speed or turning-off advertisement displays at night. But it could of course go further. Subsidies could then be focused on consumers with low revenues and without alternatives.

Climate goals are extremely unlikely to be achieved without a reduction in consumption. Japan has the opportunity and a plausible excuse to start implementing measures that could not only have a short-term impact but set the direction of a new strategy with a real chance of meeting its climate goals.

Coal as the next energy for mobility in China

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Coal as the next energy for mobility in China

Traditionally coal is the energy of power (and heat to some measure) while oil is the energy of mobility. From a physical perspective this is a consequence of the higher energy density per volume of oil.

However, energy security is a main concern in countries that do not have oil on their territory and the likely reduction in global oil availability is going to exacerbate this issue

Oil Availability concerns

In its “World energy outlook” 2018 the International Energy Agency wrote “Global conventional crude oil production peaked in 2008 at 69.5 mb/d and has since fallen by around 2.5 mb/d. […]

The level of conventional crude oil resources approved for development in recent years is far below the demand requirements of the New Policies Scenario, creating the risk of sharp market tightening in the 2020s.”

More recently the French Think-Tank “The Shift Project” wrote a report for the army on “The future of oil supply in the European Union: State of reserves and production prospects for major suppliers”. Based on Rystad Energy database and the know-how of two former directors of upstream operations from Total and a former IEA analyst they analyzed the oil reserves and production capacity of the top 16 world oil producers (excluding US sale oil and Canada). They write that “The aggregate crude oil production outlook for the sixteen major supplying countries, excluding US LTO, suggests a decline of approximately 12% in 2030, as compared to its 2019 level […]”

This however exclude US shale oil, which might be the only oil source keeping the global total oil production from a steep decline. Any changes in shale oil production would therefore have major impacts.
 

The increasing role of Coal as China’s mobility energy

With potentially less oil to run its economy, China might already be planning to switch to coal to increase its energy security by increasing both EV penetration and its production of synthetic fuels from coal.

China is already the biggest EV market with 1,246,000 new vehicles sold in 2020And the government aims for EVs to account for 50% of all new cars sold in 2035.
With 64% of its electricity coming from coal and 0.16% from oil, this is an indirect way to switch its mobility energy needs to coal.
Maybe even more interesting, is the fact that China has a methanation production capacity of 80 million tons per year and has been producing 70 million tons in 2019 with ~70% coming from coal. China also produced at least 20 million tons of Coal-to-liquid fuels and this is forecasted to reach from 29 to 56 million tons by 2030. China is therefore producing at least 90 million tons per year of synthetic fuel and displacing the corresponding oil. For reference, Japan consumes ~200 million ton/year of oil.
 

In April this year China announced that it planned to increase its coal production by 300 million tons this year, 7% of the previous year’s production.

On the necessity of reducing our consumption

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Making it to a 2.0°C world will likely require a global reduction in consumption

 

Plotting the global CO2 emissions since 1850 and comparing them to IPCC data shows that to have an 83% chance to stay below a 2.0°C global warming path global emissions must be divided by ~4 in the next 30 years.

Kaya’s identity offers a way to understand the impact of such a goal on the global economy

If CO2 emissions must be divided by 4 in the next 3 decades, the right part of the equation must also be divided by 4. A closer look at each term shows that this would likely require a global reduction in GDP per Capita:

  • World population is expected to grow by ~30% by 2050 (UN)
  • The Energy intensity of GDP has been reduced by ~35% in the past 30 years (data)and we could reasonably expect a similar outcome in the coming 30 years. Energy efficiency is an engineering problem and given its impact on companies bottom lines it is usually a priority in the corporate world. We can therefore expect sustained efforts on this topic in the coming years.
  • It means that the GDP per Capita X Carbon Content of Energy must be divided by ~3.4 by 2050 and that any effort that is not done on one must be done on the other

If we want to keep the same GDP per capita for the next 30 years, the Carbon Content of Energy must therefore be divided by 3.4 in the same period, or a reduction of 70% vs current levels. In the past 30 years it was only reduced by 6%, despite the “new renewable boom” of the last decade and the development of nuclear capacity.

It would be dangerous to bet the future of climate change and of our planet on technological changes far from those that we have been able to achieve in the past similar period.

Reducing global GDP per capita seems a much safer choice to prevent the consequences of climate change.

Japan Hydrogen strategy and its environmental impact

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Japan Hydrogen strategy and its environmental impact

Japan pledged to be a net-zero carbon emission country by 2050 and made hydrogen and ammonia technology and supply chain one of the pillars of its environmental strategy.

In 2021 METI revised its Hydrogen Strategy, building on its originally published “Green Growth Strategy”. Japan is planning to use 3 million tons per year of hydrogen in 2030 and 20 million tons per year in 2050 (vs 2 million tons currently). Most of this is supposed to be imported. One of the main applications for this hydrogen will be to fire 15 to 30GW cumulative capacity power plants and generate power at 12¥/kWh  and would require ~ 9 million tons of Hydrogen (30GW generating 184TWh with a conversion rate of 20kWh/Kg of hydrogen).

There are three potential issues in this plan that could cast some shade on the environmental impact of this plan.

A local concept of carbon neutrality

The first one, not specific to Japan, is the idea of being “carbon neutral” independently of the rest of the world. Carbon accounting as done by METI is production based and not consumption based. It looks only at the emissions linked to the production process happening in Japan (scope 1 and 2) but not of emissions linked to imported materials nor to those linked to the use of what has been produced in Japan (scope 3) (https://www.enecho.meti.go.jp/about/special/johoteikyo/co2_sokutei.html)

This means that if Japan moved all its carbon intensive activities abroad it would meet its goal of being “Carbon neutral”. This would be a fallacy and it proves that the carbon accounting must be done within a “closed system” in the physical sense of the term. This is of course valid at a smaller scale and companies claiming to be “carbon neutral” are usually omitting an important part of their activities. This brings us to the second issue.

“Green” Hydrogen

Japan interest with Hydrogen could be seen from the lenses of the above notion. When used to produce energy, hydrogen does not emit any CO2. Therefore, Japan can produce “clean” energy with hydrogen fired power plants. The burden of carbon emissions reduction has been shifted on the hydrogen producer, in the case of Japan a foreign country.

Today 90 million tons of Hydrogen are produced globally, almost exclusively from fossil fuels, resulting in ~900 million tons of CO2 emissions (IEA global Hydrogen review 2021). That is 10 tons of CO2 per ton of Hydrogen produced. With a fuel value of 33kWh/Kg and a fuel cell efficiency of 60% this is ~450Kg of co2/kWh for hydrogen, similar to burning LNG in thermal power plants. The production of “green” (low carbon) hydrogen is still in its infancy.

But that will not be of much concern for Japan as the emissions linked to Hydrogen production won’t be accounted for in Japan. Thanks to Hydrogen, Japan might end up being “cleaner” while its partners’ emissions rise.

“Green Growth”

The last issue is the commonly referred idea of a “green growth”. It is the idea that GDP and GHG emissions can be decoupled. This might be true at a country level, depending on carbon emissions accounting, but is much more doubtful at a global level. The European Environment Agency published a paper “Growth without economic growth” on this topic. Japan’s strategy for a “green growth”, relies heavily on technologies that do not exist today or that are projected to become much cheaper than they are. This is a problem that is of course not specific to Japan.

Japan 2030 carbon emission reduction target: phasing out coal plants?

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Japan 2030 carbon emission reduction target: phasing out coal plants?

Last month Prime minister Suga pledged to reduce Japan carbon emissions by 46% (from 2013 levels) by 2030. If the objective in itself is good news for the climate, no analysis, plan and policies have been disclosed by the government. Japan previous target was 26%, and this increase will require major additional cuts in the next 9 years. Mr. Suga did not specify if this target was compatible with his concept of “green growth” or if the potential economic impact would require sacrifices from the Japanese public.

An aggressive target but even more efforts needed after 2030

The new carbon emissions reduction target means that Japan will have to reduce its emissions by an average of 38 MtCO2 every year, or the equivalent of 3.7% of 2018 levels.

The above numbers are provided by ClimateWatch up to 2018 and linearly extrapolated to reach 2030 target

However, two more constraints need to be considered. The first one is the pledge to carbon neutrality by 2050. To reach it Japan would need to reduce its emissions by 33 MtCO2 every year from 2031. This however would overshoot the 2 degrees C global target.

According to the IPCC 5th report and Worldwide emissions since 2011 (climatewatch data, CAIT incl. LUCF), the world can still release a total  of ~625 GtCO2-eq to stay in the >66% probability to not go above the target 2C. In 2018, Japan emitted ~2.36% of global CO2-eq. Ideally Japan would no emit more than 14,800 MtCO2-eq in total after 2018.  To stay within this target, it should either increase the 2030 46% goal or aim for a more aggressive annual reduction after 2030, ideally a reduction of more than 60MtCO2/year the first few years.

Getting rid of coal?

To reach the 46% reduction target for 2030, Japan will have to reduce its emissions by an average of 38 MtCO2 every year, or the equivalent of 3.7% of 2018 levels.

To put this number in perspective, the effect of COVID 19 on the global carbon emissions for 2020 is estimated at ~7%, most of it coming from the reduction in transportation (Stanford earth). Japan would need to add an extra (cumulative) COVID every 2 years to meet its target. In other words, a drastic change in consumption patterns and the way we live our life would be required. This might be necessary to some extend in the long term, or it might be imposed by the consequences of missing our GHG reduction targets.

In the short term however their might be better options to reach the 46% goal. METI could focus on the biggest GHG emitters, coal plants (~30% of current total emissions). There are ~150 coal plants in Japan, for a total of 48GW, producing 330TWh in 2019 (METI) and therefore emitting ~ 330 MtCO2/year. Japan would need to replace the equivalent of ~5GW of coal plant generation by carbon neutral generation capacity every year for the next 10 years. It would still be ~50 MtCO2/year short to reach its target but this would be a major step.

This would obviously not be an easy solution, as coal plants are dispatchable and account for 31% of Japan energy mix. The easiest path would be to use nuclear capacity to phase-out coal plants in the next decade. If Japan had 48GW of nuclear capacity in 2011, it now has only 33 reactors classified as operable for a total of 31.6 GW (World nuclear association); not enough to fully replace coal but this could still cover 190 TWh/year, ~60% of the phased-out capacity (assuming a capacity factor of 85% for nuclear and the ~40 TWh/year current production). The remaining 140 TWh/year could be provided by Solar, Wind, Biomass and Geothermal. This would require to more than double their contribution to the energy mix to 27%, with total renewable share going up to 33%.

2020 Data from IEA

Given the unofficial targets rumored from METI these past months this could be an option. Grid integration would of course be an issue as pointed out by the latest OCCTO draft master plan for the development of Japan interconnections.

In a future insight we will compare the different options to decarbonize the energy mix as, coupled with the electrification of other sectors, it is likely to be at the center of the Japanese carbon reduction strategy.

Japan 2050 Carbon neutrality goals: a macro perspective #1

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Japan 2050 Carbon neutrality goals: a macro perspective

In October 2020 Japan prime minister Yoshihide Suga unveiled a major shift in position on climate change and announced that Japan is aiming to cut greenhouse gases to zero by 2050 and become a carbon neutral society.

He also said that “Responding to climate change is no longer a constraint on economic growth,”. His Industry minister Hiroshi Kajimaya later told a news conference that “Carbon neutrality itself is a growth strategy, and we must carry it out with all we have,”

In this series of posts, we will try to understand how Japan can reach this goal of carbon neutrality and which type of impact it could indeed have on its economy.

Japan Greenhouse gas emissions

Japan Greenhouse gas emissions were 1,155 MtCO2e (million tons CO2 equivalent) in 2018 according to ClimateWatch. CO2 accounted for 93% of this total, which is why “cutting greenhouse gases to zero” and “carbon neutrality” are often used interchangeably. It is however important to remember that CO2 is not the only greenhouse gas and that measures will have to be taken to reduce Fluorinated gases, Methane and Nitrous Oxide emissions.

Fluorinated gas emissions come from Industrial processes; CH4 from Agriculture (67%) and Waste (23%). N2O emissions are mainly the results of agriculture and other fuel combustion (41% each).

A per sector overview of Japan GHG emissions for 2018 reveals that ~80% of the total emissions are a consequence of Electricity/Heat, Transportation and energy used in manufacturing/construction activities.

The above numbers are provided by ClimateWatch (CAIT source, IPCC sector breakdown)

It becomes quite clear as to why the electrification of the transportation sector together with the development of low CO2 power sources has been at the center of the carbon neutrality talks.

It is however not trivial as to why this would be the best solution. Before starting this analysis, we will first have to wander into the second claim of the Japanese government, that carbon neutrality can be achieved in correlation to economic growth, and what would be the conditions for it to be true.

Economic growth and CO2 emissions

On a physical level economic activity, usually measured through GDP, is about the transformation of resources into goods and services. Our modern economies mainly rely on machines to perform these transformations. These machines in turn require energy to run.

Another way to approach the relation between energy and economy is to fall back and the definition of energy. In physics, energy can be seen as a measure of the transformation of a system. Therefore, a large economic activity requires a large amount of energy.

Extracting enough energy to power our machines can be done in different ways. The most effective one that we still rely on is burning fossil fuel. Humanity moved from a carbon neutral society (up to middle age) to our carbon intensive society because the energy density of fossil fuel allowed us to generate a vast amount of energy in a local area in a short time. This allowed us to power more machines and increase our economic activity.

Burning fossil fuels however comes with CO2 emissions, and CO2 emissions today are mostly a byproduct of burning fossil fuel to generate energy. It is why we can expect a correlation between CO2 emissions and GDP.

The above numbers are provided by ClimateWatch (CAIT source, IPCC sector breakdown), GDP (constant LCU) from The World Bank

Prime minister Suga, like many other governments, is betting on a decoupling of GDP growth and CO2 emissions growth. If the above data shows that there has been periods of economic growth with reductions in CO2 emissions in Japan, it is not trivial as to how they can be replicated and amplified to the point of reaching economic growth (or even stability) without any CO2 emissions. The following graph shows that in the past 28 years in Japan GDP growth and CO2 emissions have more often than not moved together.

A “green growth” will require a paradigm shift, and it might not be unreasonable to think that achieving carbon neutrality in the next 30 years might require to accept a decrease in GDP. The European Environment Agency recently published a paper supporting this hypothesis.

We will be reviewing the above assumptions in future posts as well as explore concrete actions that would have a significant impact on reducing Japan CO2 emissions.