Japan seeks $11bn green budget funding

Spanish Market: Electricity, Emissions, Hydrogen
28/08/24

The Japanese government is expected to request around a ¥1.6 trillion ($11bn) budget for 2025-26 and the following fiscal years to help drive the country's green transformation (GX) strategy to achieve its net zero emissions goal by 2050.

The GX implementation council led by premier Fumio Kishida on 27 August unveiled its draft budgetary request plan for sectors involved in the GX, which aims at securing at least ¥1.6 trillion, excluding projects whose costs are unspecified. Tokyo is considering seeking ¥1.2 trillion for 2025-26, while asking for the remaining budget to be allocated for 3-5 years. The initial GX-related budget for 2024-25 was around ¥1.7 trillion, including a supplementary budget for the previous fiscal year.

The government plans to allocate ¥255.5bn, or 22pc, of its total budget request for 2025-26, to help set up domestic supply chains to drive its decarbonisation efforts. This includes further development of perovskite solar cells, offshore wind power, storage batteries, water electrolysers and fuel cells.

Japan is anticipated to require more than ¥150 trillion of public-private investment to promote energy transition over 10 years from 2023-24. Tokyo plans to issue around ¥20 trillion of GX economic transition bonds over the decade to support the investment.

Tokyo is now working on formulating the GX vision toward 2040, aiming to complete it by the end of this year. The council on 27 August proposed specific areas to accelerate discussions, including efforts to restart existing nuclear reactors and development of next-generation reactors, as well as renewable energy expansion, LNG and future fuel supply security and industry relocations.

Kishida has promoted nuclear reactors to enhance the country's energy security under his GX strategy, updating the country's nuclear policies since he took office in October 2021. The nuclear-pro GX discussions may influence the continuing review of the country's strategy energy plan (SEP), which was last formulated in 2021 and calls for a reduction of the dependence on nuclear reactors as much as possible. Tokyo should clearly state in its new SEP that it is necessary to not only restart existing nuclear reactors but also build new ones, said Japan's Federation of Electric Power Companies previously.

Kishida has decided to step down from his position as leader of the ruling Liberal Democratic Party next month. But he has emphasised he will make an effort to advance the GX strategy during the rest of his tenure, especially for nuclear restoration in east Japan where no reactors are currently operating. Kishida plans to hold a nuclear-related ministerial meeting next week to work on details of the government support to secure approval by local authorities to restart the 1,356MW Kashiwazaki-Kariwa No.7 reactor. The Kashiwazaki-Kariwa nuclear plant is owned by Tokyo Electric Power (Tepco). It is Tepco's sole nuclear plant, after the Fukushima-Daiichi and its nearby Fukushima-Daini nuclear plants were scrapped in the wake of the country's 2011 nuclear disaster following a devastating earthquake and tsunami.

By Motoko Hasegawa

Japan 2025-26 draft GX-related budget request (¥bn)

Introduction of EVs, PHEVs, FCVs	144.4
Introduction of highly insulated windows, high-efficiency water heaters	188.0
Retrofitting existing buildings	26.6
SAF production and supply chain	83.8
R&D of next generation nuclear reactors	82.9
Introduction of energy storage system	31.0
Establishing domestic supply chains such as:	255.5
Perovskite solar cells, Offshore wind power, storage batteries, water electrolysers, fuel cells
Support for hard-to-abate industries	87.0
Introduction of production facility for zero emissions vessel	14.3
Support for advanced energy saving measures by small to medium enterprises	174.3
Circular economy	12.0
Support for deep-tech, start-up companies related to GX	40.0
Grant for regional decarbonisation, such as private micro grid	10.0
Total	1,149.8
	Source: Japan cabinet secretariat

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28/08/24

US, Italy, Germany miss goal to cut fossil fuel finance

Edinburgh, 28 August (Argus) — Countries including the US, Italy and Germany continued to finance international fossil fuel projects last year despite committing to stop doing so by the end of 2022, according to a report by think-tank the International Institute for Sustainable Development (IISD) and civil society organisation Oil Change International. A total of 39 countries and development banks, including the US, Canada, Germany, the UK, France and Italy, promised to end international public finance for unabated fossil fuels by the end of 2022. The Glasgow pledge — the Clean Energy Transition Partnership (CETP) — signed on the sidelines of the UN Cop 26 climate talks has exemptions for "limited and clearly defined circumstances consistent with a 1.5°C warming limit and the goals of the Paris Agreement". The report found that the US invested $3.2bn in 10 overseas projects last year and its export-import bank approved $500mn for 300 oil and gas well in Bahrain. The US is "currently considering at least five fossil fuel megaprojects that are all steeped in controversy, including gas projects in Guyana, Papua New Guinea and Mozambique", the report said. The organisations said Switzerland approved five fossil fuel projects abroad last year for a total of $1.4bn, Italy and Germany approved $1bn each and Italy's export credit agency SACE provided $4.3bn for petrochemical projects. Italy's policy contains "numerous wide-ranging loopholes" that essentially allow SACE "to continue its fossil finance virtually unhindered", the organisations said. The report also pointed out that the Netherlands committed $321mn to an oil and gas project in Brazil's Santos basin. Environmental organisations had warned last year that energy security concerns would mean some countries including the US, Germany and Italy would miss the pledge made in Glasgow . But fossil fuel finance is decreasing even among signatories with policies that do not match the ambition of the CETP, according to the report. "A year after the deadline, most CETP signatories — including Canada, the UK, France and the European Investment Bank — have met their promise," IISD and Oil Change said. And the commitments have shifted billions away from fossil fuel investments towards clean energy. The report found that signatories have collectively reduced their international public finance for fossil fuel projects by around $10bn-15bn from a 2019-21 average to around $5.2bn in 2023. International investment in clean energy rose by 16pc in the same period to $21.3bn. "Signatories particularly need to adopt ambitious and quantitative targets for rapidly scaling up finance for clean energy, commit to a high standard for the quality of this financing, as well as prioritise financing for key enabling energy sub-sectors and for the countries that need it most," the organisations said. The report found that the largest recipients of the pledge signatories' finance were upper and upper-middle income countries rather than low-income nations. The top three recipients of the signatories' international public finance for clean energy last year were Spain, Germany and Poland, they said. By Caroline Varin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Batteries, oil reserves top Korea’s trade budget focus

28/08/24

Batteries, oil reserves top Korea’s trade budget focus

Singapore, 28 August (Argus) — South Korea's trade, industry and energy ministry (Motie) today announced its 2025 budget proposal, which has a focus on fostering high-tech industries such as batteries and semiconductors, and bolstering oil reserves. Other key areas include ensuring reserves of key metals, as well as expanding low-carbon energy. Motie's proposed 2025 budget totals W11.5 trillion ($8.6bn), up by 0.2pc or W21.8bn from the previous year. The budget proposal will be submitted to the National Assembly in early September for approval and will be confirmed in December. High-tech industries Motie will expand funding for developing high-tech strategic industries such as semiconductors and secondary batteries by 17pc to W2.09 trillion in 2025. The ministry will extend support totalling W31.2bn to further develop battery management system technology and infrastructure to assess the safety of electric vehicle (EV) batteries, with the ministry citing recent heightened safety concerns following multiple fires involving EVs. The incidents had prompted domestic EV manufacturers to disclose otherwise confidential battery information. Resource security Motie will raise funding to boost economic security by 1.4pc to W1.85 trillion in 2025, which includes developing resources, as well as bolstering stockpiles of oil and key minerals. Of the W1.85 trillion, investment in developing oil fields will rise by 5.2pc to W50.6bn. This includes funds to support the first exploration drilling in the deep-sea gas field in the east sea , with results expected by the first half of 2025. The country plans to invest W79.9bn in 2025, up by 20pc from 2024, in oil storage, and to expand oil reserves to over 100mn bl. Stockpiling of key minerals such as lithium, cobalt and rare earth elements will continue, but the South Korean government is shifting its focus to building and maintaining stockpile infrastructure given stable mineral prices. Its budget for key minerals stockpiling will be lowered by 58pc from this year's W233.1bn to W96.9bn for 2025, but the allocated budget for construction and maintenance will surge by over sixfold to W116.3bn from this year's W18.7bn. The country will also support concluding supply deals for urea and further develop technology to cut import dependence. Low-carbon energy Motie's "carbon-free" energy budget is largely focused on developing the nuclear power industry as a key export driver, with W11.6bn allocated. The Czech government in July selected Korea Hydro and Nuclear Power (KHNP) as the preferred bidder for the installation of two nuclear reactors at the site of its 2GW Dukovany power plant, although US nuclear developer Westinghouse and French utility EdF are challenging the tender results . The government is also extending W198.4bn in funds to expand renewable energy supply. Of this, W42bn will be allocated to support low-carbon energy projects, which Motie expects to attract funding of up to W525bn in the renewable energy market. By Tng Yong Li and Joseph Ho Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Japan’s NRA rejects restart for Tsuruga No.2 reactor

28/08/24

Japan’s NRA rejects restart for Tsuruga No.2 reactor

Tokyo, 28 August (Argus) — Japan's Nuclear Regulation Authority (NRA) today rejected a draft safety clearance for Japan Atomic Power's (JAPC) 1,160MW Tsuruga No.2 reactor to restart operations. This is the first time the NRA has rejected a draft safety clearance for a nuclear reactor since it was set up in 2012. The NRA plans to receive technical and scientific comments from the public for 30 days from 29 August and then will make an official, final decision. It is unclear when NRA will make this final decision. A NRA committee on 26 July dismissed a claim by JAPC arguing that an earthquake fault line under Tsuruga in west Japan's Fukui prefecture is unlikely to be active, so operating the Tsuruga No.2 reactor will be safe even if a disaster occurred. The NRA on 28 August said that there were many mistakes and falsifications of documents and data submitted by JAPC, resulting in it taking around 10 years to assess the safety of the reactor. JAPC said it will continue to attempt a restart of the Tsuruga No.2 reactor. Japan's guidelines prohibit any reactors from being built above an active fault line. The NRA and seismologists in 2015 concluded that JAPC's Tsuruga No.1 and No.2 reactors were located above such a fault line. But JAPC said in 2015 that NRA's conclusion was unacceptable, claiming its own assessment showed the fault line was inactive. Japan, which is one of the world's most seismically active countries, has been checking the status of tectonic fault lines underneath reactors since a devastating earthquake and tsunami sparked a nuclear disaster at Tokyo Electric Power's Fukushima power plant in March 2011. By Nanami Oki Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Marubeni, Japex, Pertamina to study bioenergy with CCS

28/08/24

Marubeni, Japex, Pertamina to study bioenergy with CCS

Singapore, 28 August (Argus) — Japanese firms Marubeni and Japan Petroleum Exploration (Japex) have partnered Indonesian state-owned energy firm Pertamina to study bioenergy with carbon capture and storage (Beccs) at a pulp mill in south Sumatra, Indonesia. Beccs is a technology that combines biomass power generation with CCS, and is expected to be an effective option for offsetting CO2 from hard-to-abate industries where complete decarbonisation is challenging, said Japex on 26 August. The joint study will assess the feasibility of implementing Beccs by capturing CO2 emitted from biomass-fuelled boilers that are used for self-power generation at the pulp mill, according to Japex. The pulp mill is operated by Tanjungenim Lestari Pulp and Paper, a subsidiary of Marubeni. The captured CO2 will then be injected and stored into synclinal aquifers in the nearby northern Limau oil field, which is operated by the Pertamina group. The parties aim to begin operations by 2030. Beccs technology is currently progressing from the demonstration stage to pilot commercialisation, and the study could potentially result in a commercial-scale project, which would be a "pioneering initiative in the field," said Japex. This joint study is part of an agreement signed in February 2022 between Marubeni and Pertamina, to develop decarbonisation projects in Indonesia. Apart from Beccs, the firms also plan to produce biomass fuels and projects to generate carbon credits. By Joey Chan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Colombia O&G methane emissions fall by 16pc

27/08/24

Colombia O&G methane emissions fall by 16pc

Bogota, 27 August (Argus) — Colombia's oil and gas sector reduced methane emissions by over 16pc from 2019-2023, the country's petroleum association said. Methane emissions totaled 75,000t in 2023, down from 90,000t in 2019, according to data certified by the UN's Oil and Gas Methane Partnership (OGMP 2.0) Initiative, which is aimed at providing transparency to emissions reporting. Colombia's energy sector committed to cut methane emissions by 51pc from 2019 levels, to around 44,100t by 2030. Methane is the second largest cause of global warming after CO2. In 2022, Colombia issued a regulation aimed at eliminating flaring and fugitive methane emissions from upstream oil and gas activities. Oil companies reinject most of the natural gas they produce. They have also implemented infrared cameras, drones and other monitoring technologies to detect methane emissions. Colombia's energy sector accounts for about 31pc of country's total emissions, with just 5pc from the oil and gas industry, according to Colombian petroleum association president Frank Pearl. Globally, 73pc of emissions are generated by energy, he said. By Diana Delgado Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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