For many of us here in Asia, Japan has set an economic standard that others strive to achieve. Besides, Japan is one of the active funders of developmental projects across the emerging countries in Asia.
I myself have worked on a Japanese-funded railway corridor project in India, which will likely support both electric and diesel trains. But all that is about to change.
Japan has announced that it will be moving away from fossil fuels and reducing its dependency on coal and oil for energy. Is that a major blunder? Why is it dangerous to Japan’s economy—and others in Asia?
Japan: Energy Backdrop
Japan has very few natural resources to fuel its energy sector. It has traditionally relied on imports, especially oil. To minimize risk, the country diversified its energy sector and began adopting nuclear energy at a rapid pace. Despite this, it is still the fifth-largest petroleum consumer in the world (2019).
Japan benefited immensely as a nuclear-energy superpower. Nearly 30 percent of its electricity needs came from nuclear plants. However, the country’s run with nuclear energy would take a wild turn in 2011.
The Fukushima Daiichi nuclear power plant incident during the 2011 Tsunami triggered a widespread movement against nuclear energy in the country. Eventually, Japan reduced its reliance on nuclear energy in the last decade.
Spike in Coal Power, Followed By the Green Agenda
Meanwhile, Japan’s reliance on coal had been steadily increasing during the last three decades.
Between 1990 and 2017, Japanese coal consumption tripled. With imports accounting for 99 percent of all its coal consumption, Japan is the third-highest importer of coal in the world.
The pace picked up after the Fukushima incident, and the country went on a coal-plant construction-spree. Japan focused on developing the ultra-supercritical coal-fired power plants, also known as clean coal technology, that are more efficient in coal burning.
But this coal spree came to a screeching halt in 2020, when the new Prime Minister Suga announced that Japan would move away from coal power plants. “We will fundamentally shift our long-standing policy on coal-fired power generation,” he said in his first address to Parliament. “Carbon neutrality itself is a growth strategy, and we must carry it out with all we have,” he added.
In April 2021, he announced that Japan will make more sacrifices to cut down its carbon emissions (46% from 2013 levels by 2030) and achieve carbon neutrality by 2050. It is also understood that japan will end support to coal fired plants abroad.
Mass Exodus of Coal and Oil Giants
This shift in government energy policy has also impacted coal businesses and energy companies which are now disinvesting from coal.
Japan's biggest oil refinery, Eneos Holdings Inc., has now announced its exit from the coal mining business. J-Power, one of the country’s largest electric power development companies, scrapped plans for a new coal plant owing to increasing regulation against coal power. Kansai Electric Power Co. and Marubeni Corporation have cancelled their joint venture to build a 1.3 gigawatt coal power project.
Mitsubishi canceled its plan to build a $2 billion coal plant in Vietnam. Sojitz announced a complete withdrawal from thermal coal, oil, and coking coal projects by 2030.
Sumitomo, one of Japan’s largest business groups, has decided to exit the coal business by 2040. It has announced a halt in coal financing. Currently, Sumitomo owns coal mines outside Japan and imports around 6 million tonnes of coal to Japan. It is also an active builder of coal plants in Japan and other countries like Vietnam, Indonesia, Malaysia, Taiwan, and Bangladesh.
Sumitomo’s decision to sell mining assets (by 2030) and completely withdraw from coal plant construction (by 2040) will hurt the energy prospects of both Japan and other countries which relied on Sumitomo and Japanese aid.
Energy Intensive Japan Staring at a Fossil-less Energy Nightmare
With the mass exodus of energy companies and Tokyo’s decision to move away from coal and oil, the country is staring at a bleak future.
Japan is the fifth-largest energy consumer in the world (2019) and has the third-highest electricity demand in Asia. Fossil fuels accounted for 70 percent of electricity generation in 2019.
For an energy-intensive country that depends predominantly on coal and oil (66 percent combined) for its energy needs, the decision to move away from coal and oil will be suicidal. The energy crisis will be a regular event in Japan if the country follows up with its decision.
The proposed anti-fossil fuel policy seeks to replace coal and oil with renewables and nuclear. But even at the proposed building rates, Japan’s nuclear capacity in 2030 will be significantly lower than its 2011 levels.
The lethal blow, however, will come from renewables. Dependency on wind and solar will not only be insufficient to meet the energy demand, but also will disrupt grid stability owing to their intermittency and raise energy prices steeply, just as they’ve done in California and Germany. It will also cause occasional blackouts, a common event in grids that over-rely on renewables.
Even Bill Gates, an ardent lover of renewable tech and a climate alarmist, has gone on record to say that the currently available renewable technologies are not ideal for the energy-intensive cities of Japan.
Moreover, Japan’s continued reliance on biomass (wood) is not sustainable. It would be hypocritical to destroy the forests in the name of saving the climate.
Unless there is a major overhaul of its proposed carbon neutrality goals, Japan’s energy crisis is inevitable in the next decade. Besides, Japan’s decision to reduce funding fossil fuel projects leaves Asian economies unable to accelerate their developmental projects.
Embracing unproven predictions about future climate and risking the energy sector for the sake of climate action will only lead to an energy crisis in Japan and widespread poverty elsewhere in the nations that depended on Japan to boost their respective energy infrastructures.
Vijay Jayaraj (M.Sc., Environmental Science, University of East Anglia, England), is a Research Contributor for the Cornwall Alliance for the Stewardship of Creation and resides in Bengaluru, India.
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