New legislation aims to ensure stable electricity supplies and drive the use of non-fossil fuel energy, writes Motoko Hasegawa
Japan's parliament has passed legislation allowing the country's nuclear power operators to continue using reactors beyond their maximum lifespan of 60 years, by excluding the time spent on increased safety scrutiny in the wake of the 2011 Fukushima nuclear disaster.
Th green transformation decarbonisation power supply bill passed into law on 31 May and will come into force on 1 April 2024. The legislation is aimed at ensuring stable electricity supplies and driving the use of non-fossil fuel energy, such as nuclear and renewables.
Under the new law, Japan will still have to maintain the existing 40-year nuclear lifespan with a one-time option to extend this by 20 years. But the lifespan of reactors will be effectively extended by separating from the original service life any off line periods, such as those for safety inspections and legal injunctions. Any extension will require approval by the trade and industry minister, as well as safety confirmation from the country's Nuclear Regulation Authority (NRA).
Japanese nuclear power operators will be mandated to secure permission from the NRA for their safety checks on an ageing reactor every 10 years or less after its 30-year operating period is over. The operators will also have to pay the Nuclear Reprocessing Organisation of Japan for scrapping reactors.
Japan's energy policy, in line with its target of cutting its greenhouse gas emissions (GHGs) by 46pc by its 2030-31 fiscal year from 2013-14 levels, assumes nuclear will make up 20-22pc of its power mix, compared with just 8pc in 2021-22, which will require many reactors to be brought back on line over the next seven years.
Stronger nuclear availability could weigh on Japanese LNG imports, which have already declined steadily in recent years. The country received 72mn t of LNG in 2022, down from a peak of 88.5mn t in 2014 and the lowest since the 70mn t it took in 2010, just before the Fukushima disaster.
Receipts have dropped further so far in 2023, with deliveries totalling 18.9mn t in January-March, down from 20.4mn t in the first quarter of 2022, and falling by a further 19pc to 4.5mn t in April, the lowest for any month since May 2009.
Accelerating on net zero path
Japan is accelerating its decarbonisation efforts to achieve a net zero emissions goal by 2050. Its green transformation bill also secured approval from both houses of parliament on 12 May and will come into force within three months.
The new law will allow the government to secure funds by issuing energy transition bonds, along with its carbon pricing scheme. Japan plans to issue around 20 trillion yen ($147bn) of energy transition bonds for 10 years from the April 2023-March 2024 fiscal year. This would help support the country's public-private investments in achieving carbon neutrality by 2050, which is estimated to require more than ¥150 trillion over the next decade.
The government is scheduled to redeem the energy transition bonds by 2050-51, by collecting funds through a carbon pricing mechanism that comprises a carbon levy and a carbon emissions trading system.
Tokyo plans to impose the carbon levy on fossil fuel imports from 2028-29, depending on the amount of CO2 emissions derived from fossil fuel imports. Japanese utilities will be encouraged to buy CO2 emissions quotas from 2033-34, under the auction system for emissions allowances.
Japan has set an interim target of a 46pc GHGs reduction by 2030-31 against 2013-14 levels and to reach carbon neutrality by 2050. Before introducing the carbon pricing mechanism, Tokyo plans to implement a carbon credit market from 2026-27, after voluntary trading in 2023-26.
