Japan plans to introduce ammonia into the fuel mix for thermal power generation as well as for shipping from the late 2020s as part of its efforts to achieve carbon neutrality in 2050 according to a report by analyst S&P Global Platts
Japanese Prime Minister Yoshihide Suga said in October that the country would aim for carbon neutrality by 2050, bringing forward the previous target of early in the second half of the century.
Platts reported on a meeting yesterday and quoted Ryo Minami, director-general of oil, gas and mineral resources at the Ministry of Economy, Trade and Industry (METI) as saying “Ammonia is expected to increase its importance because it does not emit CO2 when it is burned. Ammonia is expected to be introduced as fuels on a commercial basis for thermal power generation and shipping in the late 2020s, and it is expected to be used for a significant amount by around 2030”.
Japan’s latest outlook for introducing ammonia as a zero emissions fuel comes as the country has developed technologies to remove NOx when burning it.
METI, which recently placed fuel ammonia as among important fields for carbon neutrality, has started discussions with the US, Australia, Saudi Arabia and the UAE, along with the International Energy Agency, for promoting use of the potential fuel, Minami said.
METI also presented its draft ideas at the meeting for introducing fuel ammonia, which said Japan should aim to procure ammonia in ways that allow domestic companies to secure the fuel stably for mid- to long-term periods.
Asked whether Japanese companies will pursue procuring ammonia with equity, “It can be in various forms. For example, producing ammonia from natural gas mainly from [upstream] gas equities,” Minami told S&P Global Platts after the council meeting. “Probably, it would be the cheapest to produce ammonia from natural gas, simply speaking,” Minami said. “We must take into consideration the stability [of ammonia supply] because it will be used as fuel,” he said, noting that buying ammonia from factories around the world could be unstable at times.
For introduction of fuel ammonia, Japan should consider ways to lower its production cost, which are “slightly expensive,” and be competitive against all other fuel and energy sources, including coal, gas, and renewables for power generation, Minami said.
To introduce ammonia for thermal power and as a shipping fuel in the late 2020s, Japan will consider developing its supply chain spanning procurement, production, transportation, storage, utilisation, and finance.
“Even for the late 2020s introduction, we need to coordinate well with relevant parties because this is a new fuel,” Minami said. “We will need to think about shipbuilding and its finance, which will take some time. We will also need to think about where to build an ammonia plant and secure finance and feedstocks. I see ammonia like the second LNG as in introducing a new fuel led by Japan”.
Japan plans to start test burning 20% of ammonia at JERA’s 4.1 GW Hekinan coal-fired power plant in central Japan from fiscal 2021-22 (April-March), as part of a feasibility study run by state-owned New Energy and the Industrial Technology Development Organization.