Japan – an Energy Snapshot

Japan was the world’s fifth-largest energy consumer in 2022, importing almost 90% of its energy needs. Oil, coal and LNG accounted for 85% of Japan’s primary energy mix in 2021 with renewables and nuclear contributing most of the remainder. Oil was the largest source of primary energy in Japan (37.27% in 2021), while coal supplied a little more than a quarter of total energy consumption making Japan the world’s third-largest coal importer behind China and India.

Natural gas – mainly used for electricity generation – accounted for more than 21% of total primary consumption in 2021, all of it imported and equivalent to 20% of the world’s traded LNG volumes. This made Japan the world’s second largest importer (after China).

With a commitment to achieve net zero by 2050, the sixth edition of Japan’s Strategic Energy Plan, published in 2021, sets electricity generation mix targets for 2030 at 20% LNG, 19% coal, 20-22% nuclear and 36-38% renewables. This means more than half the energy used would be from non-fossil sources.

By 2050, it is estimated that 50-60% of Japan’s electricity demand will be met by renewable energy (non-nuclear), 30-40% by nuclear plus thermal power generation including CO2 recovery and approximately 10% by hydrogen and ammonia power generation.

Natural gas, specifically imported LNG, still has a pivotal role to play in the renewable transition. LNG as the lowest emission fossil fuel can help to maintain stable energy generation, reducing dependence on oil and coal while renewable projects are progressively developed and brought onstream. Further reducing the carbon impact of natural gas is a key part of the plan, introducing hydrogen to the feedstock for gas-fired power plants and increasing carbon neutral LNG cargoes. A new industry group started in 2021 to promote carbon-neutral LNG, with the first cargoes already being delivered to Japanese customers.

Carbon capture, utilisation and storage (CCUS) is crucial to Japan’s net zero ambitions and a long-term roadmap unveiled in late January 2023 contains a target of storing 6-12 million tonnes of CO2 annually in 2030, then increasing by that same amount each year up to a total of 120-240 million tonnes by 2050.

Japan’s Strategic Energy Plan depends on the resumption of the nuclear industry with 27 operational nuclear plants needed to achieve the 2030 target providing essential base-load power supply. Many of the country’s nuclear plants remain offline following the Fukushima disaster of 2011 but the nuclear restart appears to be on track after a plan was adopted in December 2022 to extend the lifespan of some nuclear reactors and replace others with modern technology.

The Strategic Energy Plan includes a commitment to support other Asian countries to introduce or step-up LNG-powered power generation and renewable energy use with financial support and trade. The government plans to create a USD10 billion public and private fund to support this initiative.

Other clean energy initiatives being followed up include developing hydrogen and ammonia to be adopted widely as a fuel for power generation, iron and steel making, transport and other uses. Japan became the first country in the world to adopt a National Hydrogen Framework in 2017 and power providers are planning to use hydrogen and ammonia in a co-firing capacity in gas and coal-fired plants.

There remains an argument for replacing nuclear power and coal power generation in Japan with LNG to reduce the carbon footprint and mitigate the risk of nuclear accidents that still prey on the minds of many people, as well as backing out coal.  This would lead to a longer and high-profile role for natural gas through to 2050 and beyond.

ANGEA is an industry association representing LNG and natural gas producers, energy buyers, suppliers and companies in APAC. Based in Singapore, it works in partnership with governments and societies across the region to deliver reliable and secure energy solutions that achieve national economic, energy security, social and environmental objectives and meet global climate goals.