Japan mulls issuing energy transition bonds

: Coal, Electricity, Emissions, LPG, Natural gas, Oil products
22/12/23

Japan is considering issuing energy transition bonds in line with its carbon pricing scheme, with a target to raise around ¥20 trillion ($151bn) over 10 years for investment into energy transition efforts.

The trade and industry ministry (Meti) earlier this month proposed an initial plan for the energy transition bonds to encourage the country's industrial sector to shift towards clean energy from conventional fossil fuel, alongside the country's carbon pricing scheme, which is mainly comprised of a carbon levy and a carbon emission trading system.

The carbon levy is planned to be imposed on fossil fuel importers, such as power firms, refiners, steel makers and trading firms from the April 2028-March 2029 fiscal year. Estimated CO2 emissions depending on the fossil fuel will be considered in the levy calculations.

It will be an additional burden for fossil fuel importers, that are already paying the country's existing petroleum and coal tax. But the total burden on consumers is expected to remain unchanged from current levels, as the petroleum and coal tax will be reduced before the implementation of the levy, Meti said. The levy will initially start off at a small amount, and gradually be raised.

The current petroleum and coal tax is ¥2,800/kilo litre ($3.40/bl) for crude oil and refined oil products, ¥1,860/t for LPG and LNG and ¥1,370/t for coal. The levy includes an environmental tax, which is aimed at curbing greenhouse gas emissions.

Japan is also mulling an auction system for emission allowances, similar to the EU's emissions trading system. The system is planned to be implemented among domestic power firms first, starting around the 2033-34 fiscal year, as the power sector already has commercialised power plants utilising renewable energy that can cut CO2 emissions, Meti added. Free emission allowances will initially be allocated to the power companies by the government, and will gradually be removed.

Before launching the auction, Meti will carry out simulated trading on the country's voluntary carbon credit market, which is targeted to be launched in the 2023-24 fiscal year. Meti will also formulate detailed policies, targets and regulations for the trading system.

Trading on the voluntary carbon credit market is likely to begin with credits generated by members of the Green Transformation (GX) league, an initiative by Meti to achieve both economic growth and emissions mitigation. GX members consist of around 600 companies from a wide range of industries that emit CO2 in Japan.

Japan is gearing up its energy transition efforts to achieve its net zero by 2050 goal. The country earlier this month also revealed its draft plan to subsidise hydrogen and ammonia producers to make their selling prices as competitive as that of LNG and coal.

By Maiko Nakashima

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24/11/22

Cop: Decision on 2026 host unlikely in Baku

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Cop: Drafts point to trade-off on finance, fossil fuels

24/11/22

Cop: Drafts point to trade-off on finance, fossil fuels

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Cop: Singapore, Peru finalise carbon credit negotiation

24/11/22

Cop: Singapore, Peru finalise carbon credit negotiation

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Japan’s Taketoyo to resume biomass co-firing in 2027

24/11/22

Japan’s Taketoyo to resume biomass co-firing in 2027

Tokyo, 22 November (Argus) — Japan's largest electricity producer Jera aims to resume coal and biomass co-firing at the 1.1GW Taketoyo plant in 2027's first quarter, after a fire halted plant operations in January. Jera announced on 22 November that the thermal power plant in central Japan's Aichi prefecture would resume co-firing wood pellets with coal at a rate of 8pc, around the end of the 2026-27 fiscal year ending in March. This will come after its safety measures are completed. The plant's co-firing rate was 17pc before the serious fire, which was caused by an explosion of dust from wood pellets. The company will consider increasing the co-firing rate again in the future, provided safety can be ensured. But the plant will restart coal-only combustion in early January 2025, operating mainly during the summer and winter seasons, when electricity demand is high. Jera will keep operation rates low at Taketoyo and other coal-fired plants when electricity demand is low and rely more on gas-fired generation, to achieve its initial plan to cut CO2 emissions through co-firing at Taketoyo. Taketoyo started co-firing operations in August 2022 and burned around 500,000 t/yr of wood pellets imported from the US and Vietnam. It will burn 200,000 t/yr after it resumes co-firing at 8pc. The plant will slow down the speed of wood pellet conveyors to reduce friction as a part of safety measures, which means it must also reduce its coal and biomass co-firing rate. It is also currently working on other safety measures, such as installing air pressure conveying facilities dedicated to wood pellets and explosion suppressor systems to inject fire extinguishing agents. The outage at Taketoyo has encouraged Jera to boost replacement gas-fired generation, with the extra gas-fired costs accounting for most of the estimated cost resulting from the shutdown, which could be tens of billion yen in the 2024-25 fiscal year ending in March. By Takeshi Maeda Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Singapore light distillate stocks hit seven-week high

24/11/22

Singapore light distillate stocks hit seven-week high

Singapore, 22 November (Argus) — Singapore light distillate and middle distillate inventories rose to multi-week highs while residual fuel stocks fell to a three-week low for the week ending 20 November, according to Enterprise Singapore. Singapore's light distillates stocks rose to a seven-week high, boosted by increased naphtha imports and an onslaught of gasoline cargoes from Saudi Arabia into the city-state. Naphtha imports rose by 21pc on the week to 1.98mn bl. Kuwait, India, and the UAE were the top three suppliers to Singapore this week. Kuwait likely exported more naphtha to Asia this month, as an issue at its reformer resulted in more spare naphtha on hand for exports. More Saudi Arabian gasoline cargoes entered Singapore, adding to stocks. Singapore received another 800,000 bl of gasoline from the Mideast Gulf nation after already receiving similar volumes last week. Middle distillates stocks rose further to a six-week high, as jet fuel exports fell while imports rose. Swing supplies of jet fuel continued to arrive from India, with a 494,000 bl India jet fuel cargo imported into Singapore in the past week. Singapore's onshore fuel oil inventories retreated to a three-week low after climbing for two consecutive weeks, as imports fell sharply this week. But total inventories for November remained marginally higher at 17.78 mn bl,compared to 17.55 mn bl last month. Brazil, Indonesia, and Iraq were the top origin countries for fuel oil arrivals, while the majority of exports were bound for the Philippines and Hong Kong. No exports were recorded to China this week. By Aldric Chew, Asill Bardh, Cara Wong and Lu Yawen Singapore onshore stocks (week to 20 November '24) Volume ± w-o-w ± w-o-w (%) Light distillates Stocks 15.16 1.04 7.37 Naphtha imports 1.98 0.35 21.36 Naphtha exports 0.61 0.60 8,689.57 Gasoline imports 3.04 -0.53 -14.91 Gasoline exports 4.74 -0.35 -6.91 Middle distillates Stocks 10.27 0.63 6.56 Gasoil imports 0.61 -1.12 -64.79 Gasoil exports 3.48 1.36 63.82 Jet fuel imports 0.5 0.1 39.34 Jet fuel exports 0.20 -0.28 -58.34 Residual fuels Stocks 16.98 -1.37 -7.45 Fuel oil imports 2.19 -4.36 -66.61 Fuel oil exports 1.23 -2.04 -62.53 Source: Enterprise Singapore Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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