Japan is the focus of the latest ship.energy decarbonisation policy survey, with Mark Williams highlighting the country’s policy destination ‘of an 80% reduction in GHG emissions by 2050 and total decarbonisation as soon as possible after that.’
Japan is preparing to say Sayonara Abe-San to its longest serving Prime Minister of the modern era. A steady government hand on policy matters has been essential to Japan’s maritime development over decades. The ‘three arrows’ of Abenomics contributed to the longstanding Japanese policy of maintaining a maritime cluster of shipowners, charterers, financiers, shipbuilders, ports, research institutions, academia and support services.
Throughout the Abenomics era, Japan’s shipping industry has benefited from a weak yen, lowering domestic wage costs compared to dollar incomes. It has also benefited from low interest rates, supporting capital raising either from banks or equity markets. Regulatory reform has helped somewhat with issues like the three-way merger of Japan’s liner companies into Ocean Network Express.
Japan’s shipyards have benefited from the weak yen, making their products competitive with Korea and China when priced in USD. The Japanese shipbuilding industry has in fact gone through something of a revival compared to expectations a decade ago when it was considered to be a sunset industry.
But it is Japan’s technological leadership may be where it contributes most to shipping in the coming decades to the global effort to decarbonise shipping.
Japan’s maritime industry benefits from a joined-up set of industrial and environmental policies. A national energy policy aimed at decarbonisation and the promotion of hydrogen and fuel cells for transport may lead the world.
For the government, in particular the powerful Ministry of Economy, Trade and Industry known commonly as METI, ‘a hydrogen-based society is a means to an end’ – that being an end to Japan’s reliance on nearly 100% imported hydrocarbons. Furthermore, ‘Japan will expand its hydrogen technologies overseas to lead global carbon reduction….Japan should lead the world in realising a hydrogen-based society’.
Japan’s policy destination is an 80% reduction in GHG emissions by 2050 and total decarbonisation as soon as possible after that. There are two intermediate policy milestones. First, Japan’s commitment under the United Nations Climate Change Convention to reduce greenhouse gas (GHG) emissions by 26% from 2013 levels by 2030. Second, the development of innovative technologies by 2050 that enable Japan to contribute to the reduction in accumulated atmospheric CO2 globally to ‘Beyond Zero’.
Three key principles have evolved to aid in this journey. First, the promotion of innovation and technology ‘as the agents of change in tackling the challenges of global warming.’ Second, the promotion of Green Finance. Third, support for greater international co-operation for market adoption of innovative green technologies.
METI claims that Japan is on track to meet its first milestone. Over five years to 2018, GHG emissions fell 12%, lagging only the UK among the world’s largest economies (in the UK this has been achieved by cutting coal use for electricity generation to practically zero). In July 2020, METI hosted the first Green Innovation Strategy Meeting, attended by minsters, the Japanese Business Federation and other industrial bodies, research institutes, corporates, and academics. Actions from this meeting included the setting up of benchmarking exercises and dashboard to monitor Japanese
In January 2020, METI announced the establishment of the International Joint Research Centre for Zero-Emission Technologies, to be a division of the National Institute of Advanced Industrial Science and Technology (NIAIST). The new Centre will ‘conduct research into innovative technologies to achieve a low-carbon society and create pioneering environmental innovations to achieve a zero-emission society’. The Centre is led by Dr. Yoshino Akira, the 2019 Nobel Prize winner in chemistry.
The NIAIST announced in March 2020 the successful operation for over 1,000 hours of a renewables-powered plant generating hydrogen from electrolysis. The hydrogen is then converted into methylcyclohexane, a chemical that is easier to transport and store, before being separated and used for electrical power generation. Methylcyclohexane is similar to toluene, a chemical already frequently transported in chemical tankers world-wide.
Japan’s shipping industry is also working on the transport of liquefied hydrogen. The world’s first liquefied hydrogen carrier, ‘Suiso Frontier’ was launched on December 11, 2019. Liquefied hydrogen tanks will be installed on board the carrier by the end of 2020. The ship, built by Kawasaki Heavy Industries, a member company of the consortium leading a project named ‘CO2 Free Hydrogen Energy Supply Chain Technology Research Association (HySTRA)’, is built to transport hydrogen made in Australia from brown coal.
The first voyage from Australia to Japan with the first cargo of hydrogen on board is scheduled for early 2021. Construction of the Hydrogen Energy Supply Chain (HESC) Project’s Hastings site, in Victoria, Australia, where hydrogen will be liquefied, stored, and loaded onto the ship for export, was completed in August 2020. Construction and commissioning is scheduled to be completed by the end of September. The liquefying hydrogen storage and unloading terminal in Kobe has also been completed and is ready for commissioning.
So it may be ‘Sayonara Abe San’ but it is also ‘Ohayou Hydrogen’ in the land of the rising sun.
Meanwhile, as we reported earlier on this website, Japan is developing existing carbon-capture technology for use aboard ships.
Japanese shipping giant Kawasaki Kisen Kaisha is to test carbon-capture technology on board one of its ships from 2021. In partnership with Mitsubishi Shipbuilding, itself part of another Japanese giant, Mitsubishi Heavy Industries, K-Line will install its experimental carbon capture technology onto the 89,000 Dwt MV Corona Utility, a coal carrier it operates on contract to Tokyo Electric Power Company.
The technology is a scaled down version of devices already under development at power stations world-wide. These devices dissolve carbon dioxide into a chemical solution. That solution is later heated to release the CO2 into storage. The new test device will capture only around 0.1% of the ship’s CO2 emissions but K Line aims to capture up to 30% of emissions in future.
MHI has previously completed a conceptual study to install carbon capture onboard ships, in combination with wind-powered hydrogen generation, to create marine fuels. The Carbon Capture Methanation Cycle system creates methane or methanol by combining carbon dioxide with hydrogen manufactured by an onboard, wind-powered electrolysis unit. The output chemical can then be burned in the ship’s main engine. Any methanol produced can be stored in zinc-lined bunker tankers, but any methane produced has to be liquefied onboard and stored in cryogenic tanks. MHI admits that, while technically possible, such a project would be economically difficult to justify, even if carbon taxes and renewables incentives were in place.
Kazuki Saiki, Deputy Manager of Ship and Ocean Engineering at MHI, recommends that shipping needs to look to other industries to help bear the costs of decarbonisation, and that a common political and technical approach to reducing GHG emissions is necessary.
The K-Line project has been supported by the Ministry of Land, Infrastructure and Tourism (MILT) which, in collaboration with the Japan Ship Technology Research Association and the Nippon Foundation, in 2018 launched the Shipping Zero Emission project to conduct research into meeting the IMO’s 2030 carbon targets before creating a strategy to achieve zero-carbon shipping by 2050.
This project proposes two emission reduction pathways to 2050. The first envisages a transition from fuel oil to LNG and then adding in carbon-recycled methane or methanol. According to early projections this could (in an advance on the K-Line experiment) represent around 40 per cent of marine energy consumption.
For instance, the study considers the concept of a 400-metre, 20,000 TEU container ship powered by methanol with onboard carbon-capture systems sequestering up to 86 per cent of CO2 production and storing it in two 6,400 cubic meter tanks.
The second approach is to make an early decision to embrace hydrogen or ammonia as the best option. This requires the development of hydrogen or ammonia-fuelled engines by 2024, their trial in coastal vessels by 2026 and their wider deployment onto ocean-going ships by 2028. This could represent around 44% of energy consumption by mid-century.
In either case, the study assumes that LNG will still represent around one third of marine fuels by mid-century, though these super-efficient LNG fuelled ships will use 80% less fuel than today’s vessels. This still means that a range of technologies and new design features will be required if ships are to reach the IMO’s 2050 targets.
Japan is making strides too in developing green finance policy and initiatives. Its banking, investment, and insurance industries represent a vital global financial sector sitting on around USD 30 trillion of household savings. Its banks have traditionally financed Japan’s coal fired energy generators but are increasingly active in green finance initiatives.
In October 2020, METI and the World Business Council for Sustainable Development (a global organisation of over 200 businesses with combined turnover of over USD 8.5 Trillion) will host a Task Force on Climate-related Financial Disclosures Summit online. Participants will hold discussions on climate-related financial disclosures. The first summit, held in Tokyo a year previously, attracted nearly 200 Japanese organisations and over 860 others from around the world. The summit produced the document ‘Guidance for Utilizing Climate-Related Information to Promote Green Investment’. By 5 August 2020, according to METI, the number of organizations which have signed up to the TCFD recommendations has grown to 1,353 worldwide and 293 in Japan.
In finance, as in hydrogen engineering and transport, Japanese companies can demonstrate application of the three principles for working towards the three policy goals for decarbonisation. Perhaps Japan offers a template for other countries seeking a joined-up policy approach to the environmental challenges facing shipping. And, as one of the leading flag states in the world controlling over 10% of the global cargo fleet and a similar proportion of global shipbuilding output, Japan’s contribution to the decarbonisation of shipping is vital.