One difficulty of an energy transition is that incumbent market players enjoy outsized influence thanks to decades of growth and consolidation. The move to a low-carbon economy promises profound structural changes in the industrial, social and financial sectors. But, how to make sure this process does not unduly favor the existing players, thus replicating their domination in the clean energy sector?
This is the question Japanese antitrust authorities are starting to grapple with as the energy transition accelerates. Supporting any and all innovation that will help Japan reach carbon neutrality is seen as imperative. Yet allowing today’s top players to benefit the most simply due to their extensive resources would put into question the oft-stated goal of making the energy transition inclusive and fair.
The issue is especially pertinent in Japan, where energy corporations look to repurpose legacy fossil fuel infrastructure, such as oil terminals and thermal power plants, for hydrogen, ammonia and other constituents of a low-carbon economy. If Japan follows its gradual trajectory towards green energy, will it also mean that new players will be largely shut out from the transition? Or, will owners of existing fossil fuel infrastructure be made to compete on a level playing field?
Japan NRG Weekly sat down with former Japan Fair Trade Commission (JFTC) officials to discuss the developments in the oil and gas, hydrogen, and power sectors.