Messages from Keidanren Executives and Contributed articles to Keidanren Journals May, 2024 Japan's Clear Commitment to Carbon Neutrality
While carbon neutrality (CN) remains a topic of much debate, decarbonization efforts are accelerating in countries and regions around the world. Early in the public discussion, widespread adoption of renewable energy was seen as the only solution. But in the course of drawing up concrete CN road maps, our technological options have expanded, while many are recognizing a need to balance economic development and energy security with protecting the environment. Against this background, it is significant that the G7 Summit in Hiroshima in 2023, set out a path for a resilient energy transition that acknowledges the circumstances of each country and region.
Efforts to realize CN need to be coordinated from the perspectives of: (1) developing road maps that differ by country and region, (2) approaching the problem from both the demand side and the supply side, and (3) building related ecosystems.
There is little doubt that renewable energy will play a key role in realizing CN. Yet, as suitable sites for renewables are unevenly distributed around the world, it will be difficult for regions to make use of them in the same way. Depending on a country or region's state of economic development, its approach to the energy transition will also vary. This diversity of circumstances requires that our road map be based on an optimal mix that does not rely solely on renewables but also incorporates existing thermal power plants with CO2 capture and fuel conversion to hydrogen, ammonia, and nuclear energy. It is also important not only to reduce CO2 emissions on the supply side, but to transform processes on the demand side. In hard-to-abate sectors where it is difficult to reduce CO2 emissions to zero, we must drive continued technology development and advance implementation efforts through public-private partnerships.
Furthermore, in order to implement fuel conversion and CO2 capture solutions at the cost levels and scale required, it is necessary to build an energy ecosystem from upstream to downstream. In the case of CO2 capture, for example, we must take an integrated approach, from the identification of recovery sites, to designing transportation systems, and establishing storage and utilization options - as well as creating incentives and regulatory frameworks that will support this value chain. Technological development is well underway, but there remain barriers to overcome before wide-scale, real-world adoption can be achieved.
Japan is expected to become a center of excellence for these three, important initiatives. At the Keidanren, we will continue to communicate the progress of CN efforts in Japan.