
Aug 28, 2023
NEWS
TOP
ENERGY TRANSITION & POLICY
ELECTRICITY MARKETS
OIL, GAS & MINING
ANALYSIS
ENHANCING CARBON CAPTURE MANAGEMENT:
JAPAN SELECTS 7 CCS PROJECTS
This year, the government published its first concrete roadmap for the sector detailing where and at what cost CCS technology should be introduced. Still, even with broad global support, turning CCS into a commercially viable technology comes with a number of complications. While CCS has passed its technical tests in Japan, how it will work as a business has many guessing.
HOW TO KEEP AMMONIA SAFE: PART 2
Japan plans commercial operations of thermal power plants that burn coal and ammonia, side by side, from 2027-28. The technology, known as co-firing, is vital for Japan to cut CO2 emissions and wean itself off coal. It also poses several challenges. Among the biggest of these is how to move and store the ammonia fuel and create the right kind of tanks to contain it.
GLOBAL VIEW
A wrap of top energy news from around the world.
EVENTS SCHEDULE
A selection of events to keep an eye on in 2023.
PUBLISHER
K. K. Yuri Group
Editorial Team
Yuriy Humber (Editor-in-Chief)
John Varoli (Senior Editor, Americas)
Mayumi Watanabe (Japan)
Wilfried Goossens (Events, global)
Kyoko Fukuda (Japan)
Filippo Pedretti (Japan)
Regular Contributors
Chisaki Watanabe (Japan)
Takehiro Masutomo (Japan)
Events
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OFTEN USED ACRONYMS
|
METI |
The Ministry of Economy, |
mmbtu |
Million British Thermal Units | |
|
MoE |
Ministry of Environment |
mb/d |
Million barrels per day | |
|
ANRE |
Agency for Natural Resources and Energy |
mtoe |
Million Tons of Oil Equivalent | |
|
NEDO |
New Energy and Industrial Technology Development Organization |
kWh |
Kilowatt hours (electricity generation volume) | |
|
TEPCO |
Tokyo Electric Power Company |
FIT |
Feed-in Tariff | |
|
KEPCO |
Kansai Electric Power Company |
FIP |
Feed-in Premium | |
|
EPCO |
Electric Power Company |
SAF |
Sustainable Aviation Fuel | |
|
JCC |
Japan Crude Cocktail |
NPP |
Nuclear power plant | |
|
JKM |
Japan Korea Market, the Platt’s LNG benchmark |
JOGMEC |
Japan Organization for Metals and Energy Security | |
|
CCUS |
Carbon Capture, Utilization and Storage | |||
|
OCCTO |
Organization for Cross-regional Coordination of Transmission Operators | |||
|
NRA |
Nuclear Regulation Authority | |||
|
GX |
Green Transformation |

Govt proposes multi-year GX budget of ¥2 trillion, Diet to approve in early 2024
(Government statement, Japan NRG, Aug 23)
(¥ Billions)
|
High Speed nuclear reactor R&D |
¥ 52.3 |
¥ 152.1 in FY2024 to FY2026 |
|
Building local supply chain of breakthrough net zero products (electrolyzer, storage batteries, perovskite solar cells, offshore wind equipment, power semiconductors, etc) |
¥ 820.7 |
¥ 1,200 in FY 2024 to FY2028 |
|
GX deep tech startup support |
¥ 40.7 |
¥ 203 in FY2024 to FY2028 |
|
Energy conservation and energy transition at small and medium sized enterprises |
¥ 91 |
¥ 192.5 in FY2024 to FY2028 |
|
Energy efficient homes |
¥ 148.4 |
NA |
|
Promoting FCV, EV and other green mobility solutions |
¥ 141.7 |
NA |
|
Others, including subsidies for hydrogen and ammonia supplies |
NA |
NA |
PM eager to continue fuel subsidies to combat rising energy costs, ¥6.2 trillion spent to date
(Government statement, Aug 22)
TAKEAWAY: The fuel subsidy amount is enormous, but it should be viewed in the context of high energy prices. Naturally, the higher the prices are, the most the state spends on subsidies. For comparison, the EU is estimated to have spent 39 billion euros on fossil fuel subsidies in 2021 alone, according to Climate Scorecard. That’s the same in yen terms as the Japanese spending.
Maintaining the subsidies is partly a political move since PM Kishida’s ratings are low at home and he’s not in a position to upset business lobbies. Still, with fuel prices down significantly from last year, an exit from some of the subsidies is likely early next year.
Tokyo GX Week: Ministers from various countries to convene in late Sept
(Japan NRG, Aug 21)
Hydrogen economy lags on slow investment and policy decisions: IGES
(Japan NRG, Aug 23)
Japan, Mexico academia to collaborate on perovskite, hydrogen tech
(Japan NRG, Aug 24)
ANRE identified key GHG items to improve biomass disclosures
(Government statement, Aug 25)
|
Disclosure rules |
Items |
|
Disclosure coverage |
Equipment, ID, year of operational launch, output, efficiency, fuel category, fuel name, amount used, origin of fuel supplies, GJG calculation method, formulas used, third-party certifications, sustainability certification schemes, ideas on how to cut GHGs further |
|
Amount of fuel |
Fuel amounts from every supplier, rather than the total volume |
|
GHGs |
Plans to cut GHG |
|
Term |
April-March |
|
Where to disclose |
Operators’ respective websites |
|
Reporting |
In addition to website disclosures, operators file their reports to sector associations. |
Mitsubishi Chem, Asahi Kasei, Zeon to expand EV battery material production in U.S.
(Nikkei, Aug 23)
PowerX raised ¥4.62 billion in Series B round
(Company statement, Aug 17)
Registration for JPX Carbon Credit Market closes this month
(Japan NRG, Aug 25)
TAKEAWAY: The launch of the carbon credit market is being done in stages. The current state has been given a fun-sounding name, the GX League, to give it a sense of prestige and coolness. The 500+ companies that have signed up either to trade carbon credits or be involved in the new market’s developments and rule-making are described as members of the GX League. The League and the carbon credits market are both voluntary. Those that join the GX League are also asked to seek GHG reductions of 46% by the end of this decade (compared with FY2013) to mirror the national CO2 reduction commitments. Emission reduction on top of that would be rewarded with credits that should be monetized on the exchange.
Japan, Australian companies to develop large-volume CO2 shipping solutions
(Company statement, Aug 23)
Toyota Tsusho supplies biofuel to cargo carrier at Kobe Port
(Company statement, Aug. 22)
Mitsubishi UBE Cement to invest ¥50 billion for waste plastic fuel
(Nikkei, Aug 23)
Idemitsu joins with LOPS to develop SAF supply chain
(Company statement, Aug 24)
KEPCO studies CO2-free hydrogen production using nuclear power
(Denki Shimbun, Aug 24)
Asahi Kasei to develop technology for resin materials production from CO2 and water
(Nikkei, Aug 25)
JFE Engineering will develop new CO2 separation technology
(Company statement, Aug 17)
Marubeni, Peru LNG and Osaka Gas to conduct Pre-FEED study on e-methane
(Company statement, Aug 22)

Japan begins of Fukushima water release; safety maintained but international outcry persists
(Japan NRG, Aug 24)
TAKEAWAY: Despite the many months of carefully planning and safety inspections with international bodies and partners, a number of international media are capitalizing on the public’s uneasy attitude toward this issue. Many of the headlines around the release have played to people’s natural anxiety about radiation, rather than lay out the scientific research and context. It is well documented that many nuclear plants around the world, including in China, the most vocal critic of the release program, release water into tritium levels above that of Fukushima — without causing damage to marine life.
No matter the science, the unfortunate fact is that the treated water release in Fukushima is going to cause damage to Japan’s international reputation. While the treated water release is validated by the IAEA and Japan’s own nuclear regulator, the NRA, public distrust of TEPCO’s management due to the company’s past behavior remains. Japan’s allies, such as the U.S. and the EU, have expressed support.
MHI completes coils for experimental ITER fusion reactor in France
(Company statement, Aug 24)
Chubu Electric, Chubu Electric PG and NTT Data to study renewable energy output control
(Denki Shimbun, Aug 23)
Hydropower facilities in Mie Pref at full operational capacity
(Yomiuri Shimbun, Aug 22)
City of Kawasaki to form a new energy company
(New Energy Business, Aug 25)
May power sales down; New power market entrants struggle
(Denki Shimbun, Aug 21)
Abalance sets up factory to produce solar cells in Vietnam
(Company statement, Aug 18)
Pacifico Energy to update its plan for 135 MW solar plant in Mie
(New Energy Business, Aug 22)
Environmental assessment for repowering 36 MW wind station in Aomori Pref
(Government statement, Aug 18)

Hokkaido tests shows liquefied biomethane can be used for city gas
(Company statement, Aug 22)
TAKEAWAY: Air Water claims LBM is “carbon neutral” but fossil energy is likely consumed during transport. Biogas plants are located in the Taiki Township, which is 50-60 km from the liquefaction plant.
TAKEAWAY: Biogas applications are spreading fast. In February, a group consisting of Mitsui OSK Lines, JERA and Air Water tested liquefied bio methane (LBM) to sail a ship, substituting LNG with LBM. In October, Interstellar Technologies plans to launch a rocket propelled solely by LBM, which is made by removing CO2 from biogas generated from livestock manure. The gas is around 60% methane and 40% CO2.
Petrobras and Kureha partner on carbon capture at offshore rigs
(Nikkei Asia, Aug 20)
Japan and ASEAN to recover critical metals from e-waste
(Nikkei Asia, Aug 25)
INPEX takes stake in LNG project in Australia
(Company statement, Aug 21)
LNG stocks slip to 1.81 million tons
(Government data, Aug 23)
BY FILIPPO PEDRETTI
Enhancing Carbon Capture Management:
Japan Selects 7 Sites for CCS Projects
A decade and a half ago, Japan embarked on its first CCS trial in a small northern port when carbon capture and storage seemed like a distant, highly experimental technology. Critics may say that little has changed for CCS in that time, but Japan’s top officials disagree.
This year, the government published its first concrete roadmap for the sector, which gives specific details on when, where and at what cost the technology should be introduced. There are designs for carbon storage sites at home and abroad, and a parallel development for a domestic carbon credits marketplace.
The confidence with which Japanese officials have outlined the emergence of CCS as a new sector that should be operational by 2030 owes a lot to that successful trial back in 2008. In fact, the same northern Hokkaido port has now been upgraded to an industry hub to carry the flag for CCS in Japan.
Still, even with broad global support, turning CCS into a commercially viable technology comes with a number of complications. While CCS has passed its technical tests in Japan, how it will work as a business has many guessing.
Japan’s blueprint for CCS
In early February, ANRE released a final CCS sector roadmap that calls for Japan to establish the facilities that can store between 6 to 12 million metric tons per annum (mtpa) of CO2 by 2030. This is equal to the annual emissions generated by two to three coal-fired power plants.
ANRE assesses the cost of isolating, recovering, transporting, and storing a ton of CO2 to be about ¥13,000 to ¥20,000. The top of that range is higher than the price at which a carbon credit for a ton of CO2 trades in most countries. The ETS in the EU, for example, has only once reached the 100-euro level (¥15,860) since January 2020. Thus, Japan’s roadmap outlines a target of reducing its initial cost range by 60% through 2050, mainly by improving the pipeline network.
Overall, the national strategy for CCS development is expected to be focused on six actions, as outlined by METI in a sector blueprint earlier this year.
In particular, the government is keen to put in place legislation to govern the new industry, something that METI has identified as holding back progress in the past. That’s why it’s working on the CCS Business Act, a draft version of which will face parliamentary debates in the coming weeks.
The Act should give more clarity on geological regulations and on the handling of oil and natural gas. There is some uncertainty around whether existing acts that cover mining and hydrocarbons can or should apply to the CCS business. Furthermore, rules are needed for the CCS value chain (CO2 separation, capture, transport, storage), as well as for gas handling and data provision, as well as other aspects.
Another key point in METI’s action plan is how CCS operators should communicate the sector’s safety issues to local communities.
Corporate response
So far, several domestic consortiums have shown interest in jumping into the carbon storage businesses. This is partly thanks to METI’s resolution to support a limited number of CCS projects (around four) through grants and tax breaks (similar to EU and U.S. practices).
Trading house Itochu announced a collaboration with Mitsubishi Heavy Industries, INPEX, and Taisei Corp to study the transport of CO2 by ship for storage within Japan. Oil refiner Idemitsu Kosan has teamed up with Hokkaido Electric and JAPEX to explore CCS and CO2 reuse projects in Tomakomai, the port in Hokkaido where Japan’s CCS industry was born.
Another oil wholesaler, ENEOS, established a research company in partnership with J-Power and JX Nippon Oil & Gas Exploration to prepare for carbon storage site selection in western Japan by 2030. The group’s plan involves storing CO2 captured at ENEOS oil refineries and J-Power electricity stations.
Shipper Kawasaki Kisen Kaisha has signed an MoU with Kansai Electric to assess marine transport and shipping costs associated with moving liquefied CO2. Kansai Electric will also work with trading house Mitsui to conduct a feasibility study on a CCS value chain. While Kansai Electric examines the potential to capture CO2 from its thermal power plants, Mitsui will focus on strategies to transport and store the emissions.
Japan’s advanced CCS projects
Perhaps the industry’s biggest catalyst, however, came in June when state energy company JOGMEC announced that it has picked seven sites – five in Japan, two abroad – for development as part of the first wave of Japanese CCS projects. These sites are projected to store around 13 mtpa of CO2, of which 30% would be then exported overseas.
JOGMEC envisages the development of more CCS projects outside Japan that would allow the storage of 120 to 240 mtpa of CO2 by 2050. According to METI’s calculations, this scale would require the introduction of up to 24 new injection wells every year.
|
Project |
Companies |
CO2 Storage Volume |
Outline |
|
Tomakomai Area CCS |
JAPEX, Idemitsu Kosan, Hokkaido Electric |
1.5 mtpa |
CCUS project aimed to partner with “CCU/Carbon Recycling” for CO2 reuse and “BECCS” that combines CCS with a CO2 pipeline-connected biomass power plant. |
|
Tohoku Region West Coast CCS |
Itochu, Nippon Steel, Taiheiyo Cement, Mitsubishi Heavy Industries, Itochu Oil Exploration, INPEX, Taisei |
2 mtpa |
Scalable project across diverse CO2 sources like steel and cement industries through CO2 shipping in a broad area. |
|
East Niigata Area CCS |
JAPEX, Tohoku Electric, Mitsubishi Gas, Hokuetsu, Nomura Research Institute |
1.5 mtpa |
Project anticipates added value, like decarbonized fuels and environmental benefits, using established oil and gas fields to store CO2 from chemical, pulp, electric power plants, and more. |
|
Metropolitan Area CCS |
INPEX, Nippon Steel, Kanto Natural Gas Development |
1 mtpa |
High scalability project targeting emission sources of industrial complex in metropolitan area |
|
Offshore Malay CCS |
Mitsui |
2 mtpa |
Cooperation project with Malaysian National Oil Company, interested in receiving CO2 from Japan |
|
Oceania CCS |
Mitsubishi, Nippon Steel, ExxonMobil Asia Pacific |
2 mtpa |
Project in offshore Oceania. It targets industries on Nagoya and Yokkaichi ports. |
|
Off the Northern to Western Kyushu CCS |
ENEOS, JX Nippon Oil & Gas Exploration, J-POWER |
3 mtpa |
Project with offshore CO2 storage targeting West Japan |
Source: JOGMEC
The industry hub
Among the first wave of projects, the one in Tomakomai is seen as a flagship and an epicenter of CCUS technology progress. The port town is host to that first CCS project that Japan created as a pilot in 2008. The project is run by a JV of domestic companies called Japan CCS Corp, which started with a geophysical survey that was commissioned by METI in 2012. Over the course of four years, through 2019, it successfully captured and stored approximately 0.1 mt of CO2 per year from an Idemitsu oil refinery.
The CO2 was captured from the off-gas (50% CO2 content) emitted at the refinery using active amine technology. It was then injected into nearby offshore saline aquifers and continuously monitored. By late 2019, the project exceeded its target, capturing a total of 0.3 Mt of CO2. Since then, there’s been no leaks, no local impact from CO2 injections and no issues with earthquakes in the area.
To build on the pilot’s success, businesses are also considering ways to link the CCS facilities with other clean energy initiatives in the area. For example, JAPEX and Deloitte unveiled plans to create a pipeline network that will link the carbon storage site with manufacturers that need carbon, aiming to foster a carbon-sharing economy. With plans for green hydrogen production facilities in Hokkaido, the CCS hub of Tomakomai could also develop as a production center for synthetic fuels that bind hydrogen and CO2.

Source: JOGMEC
Conclusion
The realization of the CCS strategy could have a strong impact on Japan’s electricity mix. Director of ANRE’s CCUS policy, Saeki Norihiko, stated that by 2035 the domestic CCS framework should serve the power sector as well as big factories in the cement and chemical industries.
Still, the scale of CCS sector targets also raises questions. Realizing all seven projects in seven years seems unlikely and there’s scant evidence that an entirely new industry can be built in such a short time. Another schedule problem may arise when trying to pair CCS development with that of a national carbon credits market. The latter is set to be fully operational in 2026, four years ahead of the CCS timeline.
CCS projects will also require significant financing. While all seven of JOGMEC’s selected projects are due to get fundings from the state, at present only the Tomakomai development has received funds from another state body – NEDO. New financing sources, such as the issue of GX Bonds, will be necessary.
Most importantly, the success of domestic projects will play a big role in whether Japan can later execute its Asia-focused CCS strategy. After all, the small size of the Japanese sites indicates that the really big capacities will need to be secured elsewhere.
BY MAYUMI WATANABE
How to Keep Ammonia Safe: Part II
This is Part II of a two-part series examining the safety issues involved in using ammonia for power generation. The first story was published in the Aug. 21 Weekly report.
As several Japanese utilities prepare to start world-first trials of ammonia-fired power generation, most of the focus will be on the process of producing electricity. But a major challenge for companies pursuing this technology at gigawatt-scale will be in how to move and store the ammonia fuel.
Ammonia, a compound that includes hydrogen atoms, is a key component of Japan’s decarbonization strategy. It is seen as a versatile energy carrier that burns without emitting CO2, potentially offering another net-zero option to generate electricity.
Japan has already penciled in commercial operations of thermal power plants that burn coal and ammonia, side by side, from 2027-28. The technology, known as co-firing because it allows two fuels to be used, is seen as vital for Japan to cut CO2 emissions and wean itself off coal.
The current timescale leaves utilities with just four to five years to solve several significant logistical and safety standards issues. And among the biggest of these is creating the right kind of tanks to contain ammonia.

Source: Canva AI imagining of new ammonia storage tanks
Safety first
Tank safety requirements range from outlining specific levels of earthquake resistance to temperature and pressure controls. To meet such tough requirements, finding the right tank raw materials is key and a big challenge, according to the Japan Clean Fuel Ammonia Association. This is because ammonia exposes storage tanks to corrosion risks.
Tanks require high tensile material that withstands high pressure, low temperatures and stress corrosion cracks (SCC). Presently, most ammonia tanks in Japan are made of SLA (low temperature, aluminum-free) carbon steel.
Engineering firms are pursuing alternatives to SLA. They are also studying new tank shapes in addition to the conventional sphere-shaped structures. Stainless steel covered by a thin invisible film on the surface, which protects from corrosion, has emerged as a strong possibility.
Size matters
A power plant installed to co-fire (i.e., use both ammonia and coal as fuel) on a commercial basis would need to keep tens of thousands of tons of ammonia on site. That poses a problem, because regulations for large ammonia tanks are yet to be introduced.
“We cannot build their tanks because safety standards for ammonia tanks of such sizes are not clear,” an official for Toyo Tanka, a tank manufacturer, told Japan NRG.
Qatar hosts some of the world’s largest tanks for ammonia storage, each of which has a 50,000-ton capacity. In Japan, tanks of 40,000 tons and above are not permitted. This will be a serious bottleneck to grow the ammonia energy supply chain as utilities will need tanks that could hold 100,000 tons of the fuel. A single tank holding 100,000 tons is the ultimate goal. Several small tanks would take up space as each would have to be situated about 100 meters away from the others.
Engineering major IHI, which has a track record of building 15,000-ton tanks in Japan, said it discovered that stainless steel of the SUS821L1 specification could potentially hold up to 110,000 tons of ammonia. The company has also set its sights on ship-shaped membrane pressurized cargo tanks made from SUS304 stainless steel.
Some have suggested using LNG and LPG tanks, made of carbon steel or aluminum alloys, for ammonia storage. This would be a major cost saver for the utilities. Stainless steel, however, appears to be the most popular choice so far.
One industrial tank manufacturer said he believes that some of his customers are using small stainless steel storage tanks originally designed for other chemicals, but instead using them to hold ammonia, because they think stainless steel is a stronger material.
Using the right protection
All metals corrode, including stainless steel. Protective coating on a stainless steel surface cracks at high temperatures and when exposed to chlorine. Ammonia is stored at -30 Celsius, but some studies show stainless steel still suffers from slow pitting corrosion. Aluminum alloy, like stainless steel, has a film on its surface and is vulnerable to chlorine.
Potential SLA alternatives
|
CHEMICAL COMPOSITION |
MANUFACTURERS | |
|
SUS821L1 stainless steel |
21% chrome, 3% nickel, 3% manganese-copper, 0.17% nitrogen, remainder iron |
Nippon Steel, JFE Steel, Kobe Steel, etc. |
|
SUS304 stainless steel |
18% chrome, 8% nickel, remainder iron |
Almost all steelmakers worldwide |
|
SL9N590 carbon steel (used for LNG, LPG tanks) |
9% nickel, remainder iron |
Nippon Steel, JFE Steel, Kobe Steel, etc. |
|
5083 aluminum alloys (used for LNG, LPG tanks) |
4% magnesium, 0.4% silicon, 0.4% manganese, 0.25% zinc, remainder aluminum |
UACJ, Kobe Steel, etc. |
When the coating dissolves and the surface cracks open, copper, nickel and other elements flow out and react with ammonia, creating new compounds that may impact the ammonia or the tank surface. Copper compounds in particular may cause explosions and Japanese regulations ban the use of any copper in ammonia storage or applications.
The Japan Society of Refrigerating and Air Conditioning Engineers found 3% of ammonia tanks cracked after three years of usage, possibly due to the tank manufacturing process used rather than the quality of the metal.
Corrosion also slows the development of ammonia fuel cell batteries, said one gas utility laboratory researcher. “The cell system may be perfect from the energy efficiency angle, but the ammonia causes the cell components to degrade fast…this is the biggest challenge toward cell commercialization,” he said.
Lacking data
Ammonia projects are also deadlocked by a lack of data. For example, all metals become thinner with time. The metal thickness of tanks needs to factor in abrasion. However, there are few if any studies that examine how fast stainless steel is worn away by ammonia. Most corrosion tests cover short periods of time, about 24 hours, since products are currently designed to keep ammonia only for a short period.
There is no data on how ammonia affects aluminum. There are ammonia-resistant zinc-plated steel products. These are also for limited ammonia exposures. Views on the safety of SUS304 are also divided. In general, researchers say more non-partisan analyses are needed.
Many industrial associations are not big enough to finance research and data collection, and at the end of the day, they rely on company research. The Japanese government’s Green Innovation Fund, managed by NEDO, is financing some of the R&D in this field and is expected to help fill some of the gaps in data. One of the upcoming pilot projects to co-fire ammonia at a coal power plant is done by power utility JERA with financing from NEDO.
What happens when coal and ammonia meet?
Another key area to explore will be what happens when ammonia and coal combust, and what impact this has on boilers, which are usually made from specialty steels.
“There has been analysis on the impact of ammonia gas on machinery components, but that of the gas generated from the combined combustion of coal and ammonia is new,” said one laboratory official.
At least compared to tank material safety assessment, the combustion impact analysis is straightforward. The first step is to identify gases that are released during co-firing and to build scenarios to forecast their volume. Most boiler components are made of nickel-based superalloys with strong corrosion resistance, but they are not corrosion-free.
Metals are sensitive to NOx (nitrogen oxide), sulfur dioxide, nitrogen dioxide, hydrogen sulfide, and chlorine gases. Ammonia alone releases NO, NO2, and nitrous oxide (N2O), another type of greenhouse gas. The second step is to draft maintenance guidelines based on how the gases affect the metals, and identify required changes to current standards.
One of the gases released from ammonia combustion in particular has caught the attention of environmentalist activist groups. Ammonia does not emit CO2 when burned, but it does create NOx, a global warming gas. That said, the chemistry is not straightforward.
Ammonia has a dual property when it comes to NOx, which it releases when combusted but also acts as its reduction agent. Chugoku Electric’s 2017 co-firing demo showed that NOx intensity decreased when the ammonia ratio was increased to 0.8% from 0.6%. Increased understanding of ammonia’s reduction mechanism will help not only mitigate the gas emissions but also standardize methods to measure and forecast its environmental impact.
Meanwhile, Chugoku Electric said the temperatures of boiler components were not affected by ammonia, suggesting that the risk of suspending power generation due to temperature changes is low.
Rules for worst-case scenarios
ANRE, the agency under METI’s authority that’s responsible for policies on energy and natural resources, has started to draft version 3 of the sector-relevant Electricity Business Act Rulebook, which had been upgraded in December last year.
ANRE’s to-do list includes a review of some of the currently unrealistic rules, such as a 320-meter distancing requirement from the most immediate neighboring facilities. Officials also want more risk assessments and will likely draft guidelines for emergencies, such as how to manage contact lists and regular staff training.
Once version 3 of the Rulebook is completed, it will be put before the public for feedback and comments. Going forward, it will be updated often to reflect the findings of large-scale co-firing tests and to address operational management approaches.
Meanwhile, the Clean Fuel Ammonia Association is working on its own proposal for tank standards. It has not elaborated on when the proposal will be released. “Whether the gas dosage is small or large…it needs to be taken with utmost care,” IHI told Japan NRG.
Reliable safety codes will not only assure safety and well-being but they’re also essential for the growth of new industries. Ammonia is a highly hazardous and toxic chemical, and even the smallest leak can cause serious damage to the environment and human life.
Development of corrosion-resistant materials and reliable safety codes to clarify the proper use of materials are some of the essential actions required for the growth of new ammonia energy solutions ranging from co-firing, transport and fuel cells.
Reliable safety codes will not only assure safety and well-being; they’re also essential for the growth of new industries. Businesses should not be intimidated by safety risks. On the other hand, underestimating them can deter innovation. Companies studying a possible entry into the ammonia fuel cell business often learn about the severity of corrosion for the first time.
Some consider developing corrosion solutions on their own but give up due to high business risks. There are ideas for corrosion resistant plating materials or ways to convert ammonia into something else safer during long-term storage.
For robust research to drive the industry and permeate among its members, correct safety awareness and codes are needed. Once key safety issues are cleared, Japan will be ready to develop this into the forecast 50 million tons/ year ammonia market.
BY JOHN VAROLI
Below are some of last week’s most important international energy developments monitored by the Japan NRG team because of their potential to impact energy supply and demand, as well as prices. We see the following as relevant to Japanese and international energy investors.
Australia/ LNG
Woodside Energy reached an in-principle agreement with unions at Australia’s largest LNG project, in the hopes of averting a supply disruption for one of the world’s biggest exporters of the fuel.
Brazil/ Fossil fuels
State-owned Petrobras pledged to maintain a balanced portfolio, continuing to produce oil for the next four decades, but still boosting investments in renewables. While the company sees global oil demand dropping in coming decades, it believes that fossil fuels demand will remain strong.
China/ LNG
China’s LNG gas importers are opening or expanding trading desks internationally to better manage growing supply portfolios in a global market that doubled in value last year. For example, PCI, a unit of PetroChina, is the country’s largest gas company, with traders and analysts in Beijing, Singapore, London, Dubai and Houston.
Germany/ LNG
Chemicals group BASF inked a deal to import 800,000 tons of LNG annually from the U.S., starting 2026 and running through 2043. The seller is Cheniere Energy, the biggest producer of LNG in the U.S. This is the latest in a string of LNG deals inked by German companies.
LNG/ Global markets
Global gas prices could rise in the short term if strikes at Australia’s LNG plants take place, but markets are well balanced now with inventory levels high in North Asia and Europe, a Shell executive said. Last week, gas prices jumped in Asia and Europe on concerns that industrial action could disrupt exports from Australia.
Mongolia/ CRMs
The U.S. wants Mongolia to deepen cooperation on mining rare earths and other minerals. Mongolia and the U.S. will seek “creative ways” to ensure that the country, which is landlocked by neighbors China and Russia, could get critical minerals onto the world market.
Norway/ Offshore wind
Equinor and partners launched the world’s largest floating offshore wind farm. Its 88 MW of capacity will cover about 35% of annual power demand for five platforms at North Sea oil and gas fields.
Saudi Arabia/ CRMs
By 2030, Saudi Arabia plans to attract nearly $200 billion in investments in its nascent mining sector. The country’s known mineral wealth is estimated to be worth $1.5 trillion.
Sweden/ Battery storage
Northvolt raised €1.2 billion in convertible bonds, including from BlackRock, as Europe’s biggest battery maker is boosting production to meet EV demand. The debt issuance comes as the Swedish start-up prepares to raise $5 billion in equity financing in the next few weeks.
U.S./ LNG
The U.S. will remain the world’s dominant LNG provider over the next four years. By 2027 the country will have 284 million tons of annual LNG liquefaction capacity. In that period, global liquefaction capacity is expected to rise from the current 487 million tons annually to 958 million tons annually.
A selection of domestic and international events we believe will have an impact on Japanese energy
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JAPAN NRG WEEKLY AUG 28, 2023 JAPAN NRG WEEKLY Aug 28, 2023 NEWS TOP ENERGY TRANSITION & POLICY ELECTRICITY MARKETS OIL, GAS & MINING ANALYSIS ENHANCING CARBON CAPTURE MANAGEMENT: JAPAN SELECTS 7 CCS PROJECTS This year, the government published its first concrete roadmap for the sector detailing where and at what cost CCS technology […]