Press Conference by Minister Kajiyama on 2050 Carbon-Neutral Green Growth Policy

*Note: This is a provisional translation for reference purposes only.

16:10 - 16:40
Monday, October 26, 2020
Press Conference Room, METI

Opening Remarks

Earlier today in the Prime Minister's general policy speech, he announced a policy which aims for the realization of a carbon-neutral, decarbonized society by 2050.
 
It is no exaggeration to say that the issue of climate change is now a crisis that is common to all humankind. Around the world, developed countries are in lead of taking action under the banner of carbon neutrality. The challenge that faces us is whether we will be able to overcome this crisis through advancing innovation and expanding business opportunities.
 
Carbon neutrality is not simple, so it is necessary to make a concerted effort in Japan. Industry, government, and academia must work hard to achieve high targets and realize our vision for the future.
 
Aiming for carbon neutrality, achieving solutions to each issue and contributing to the world will also lead to new business opportunities.
 
This challenge is the very essence of Japan's growth strategy. We will devote our full resources to creating a positive cycle of economic growth and environment protection together with the business community. This initiative will be led by METI, a flag-bearer for industry, who understands the actual state of the companies that are boldly taking on these difficult challenges.
 
Efforts in the energy field, which accounts for more than eighty percent of greenhouse gas emissions, are particularly important for achieving carbon neutrality. In a carbon-neutral society, demand for electricity is expected to increase, but in order to respond to this, we will make maximum use of what is viable, such as renewable energy and nuclear power, and also pursue new options, such as hydrogen.
 
Renewable energy will be introduced to the maximum extent possible while reducing costs, improving the system, ensuring flexible operation, and employing state of the art storage batteries. Nuclear power will also be utilized. Thermal power generation will be utilized while making maximum use of CCUS and carbon recycling. In the industrial, transportation, commercial, and household sectors, electrification and hydrogen will be foundational, and in manufacturing processes where electrification will not be a viable system, we will utilize hydrogen, CCUS, and carbon recycling.
 
We will intensively discuss the path to becoming carbon-neutral in 2050 at the Advisory Committee for Natural Resources and Energy and the Green Innovation Strategy Meeting.
 
Regarding important areas such as hydrogen, storage batteries, carbon recycling, and offshore wind, which are indispensable for achieving carbon-neutral goals, we intend to compile an implementation plan by year end that includes concrete targets and target deadlines, development of systems such as regulatory standardization, and support measures to promote public implementation with an initial target of the end of this year.
 
We will engage a wide range of industry insiders in considering a path to public implementation, positioning hydrogen as a new resource that has until now focused on passenger car applications.
 
Regarding storage batteries, in the mobility field, we will expand investment in batteries and improve technology to secure the market and strengthen our battery supply network.
 
Carbon recycling is a key technology that is needed to respond to CO2 discharged through the use of fossil fuels. We will consider measures to materialize this technology.
 
In addition, offshore wind is expected to see the greatest expansion in the future. In addition to promoting the development of systems based on its potential, we will promote the development of domestic bases for the development of offshore wind industries.
 
We will hold repeated meetings with top management of companies that have developed their own carbon-neutral policy, and discuss specific initiatives and the support measures required by the government.
 
Today, METI will launch our "Green Growth Strategy Office" and a project in which young officials will examine this issue. With the cooperation of Dr. Yoshino Akira, Director of the Global Zero Emission Research Center of the National Institute of Advanced Industrial Science and Technology, each department and bureau will work together in unison, regardless of the vertically divided administrative systems.
 
The Japanese government will provide long-term support to companies that are making large-scale investments and taking on bold challenges toward achieving their ambitious goals.
 
Of course, strategic collaboration with other countries is also indispensable in advancing these technological innovations and public implementation. We will collaborate with other countries within the Green Deal, as they are already pursuing ambitious initiatives in the environmental and energy fields. With a focus on areas such as hydrogen utilization and CCUS, we will call for cooperation to promote innovation including public implementation, and take the lead in global action aimed at achieving both economic growth and environmental sustainability.
 
Efforts toward achieving carbon-neutrality are not simple, but each and every citizen must take personal responsibility in tackling this issue. Achieving carbon neutrality is not simply a matter of enduring some inconvenience. Carbon neutrality will lead to future corporate profits, creating a positive cycle of the economic growth and environmental protection. This is the Japanese economy that we aim to establish.

Question-and-Answer Session

Q: I have two questions. First is about the possible exclusion of efficient plants from the fadeout of use of coal-fired power plants. Some experts point out that it would be impossible to achieve net-zero CO2 emissions by 2050 unless all coal-fired power plants, including efficient ones, are shut down. What is your view on this point?

A: As I have mentioned before, we will promote technological development of CCUS alongside the fadeout of the use of inefficient coal-fired power plants. Technically, it is already possible to separate and recover nearly 100% of CO2. However, when it comes to utilizing the recovered CO2, although successful efforts have been made in the experimental stage to produce concrete, plastic, or chemical products from the CO2 in laboratory tests, they are still unfeasible in terms of cost. Therefore, we will consider such utilization, including CCUS. For example, even the United Kingdom, which declared commitment to net-zero emissions ahead of other countries, has placed utilization of CCUS in its long-term plan, so I would like to discuss this issue, including these points, in the future.

Q: For my second question, if we are to aim at net-zero CO2 emissions, I believe that the role of nuclear power plants will become important as we cannot totally rely on renewably energy. However, unless new construction, expansion, and replacement of nuclear power plants are articulated, the number of nuclear power plants will continue decreasing beyond 2050 and it would become difficult to achieve net-zero CO2 emissions by 2050. Please tell me your opinion on this issue.

A: While I have set out to utilize all power sources at the present stage, I would like to advance substantive discussions now regarding 2030 or 2050. As discussions at the Advisory Committee for Natural Resources and Energy started on October 13, I would like to have in-depth discussions on that issue as well. In other words, I will not make predetermined conclusions or prejudgments as the minister, but will continue discussions with such experts.

Q: As a related question, I would like to ask you again about how you view the current situation where resumption of operation of nuclear power plants is not making progress while upholding a policy to make maximum use of what is viable, such as renewable energy and nuclear power. I believe some people have concerns that reduction of CO2 emissions would provide a reason for resuming operation of nuclear power plants. How do you see this situation?

A: As we have been reiterating, 24 of the 60 nuclear power plants have been decommissioned, and now there are 36 plants. While there are also plants that are under construction or that have yet to file an application for licensing review, we will resume operation of power plants, aiming to make nuclear power account for 20–22% of the energy mix by 2030. I consider these ten years to be a period to strive for resumption of operation of nuclear power plants as well as a period for restoring public confidence. We intend to take resolute actions including actions in these respects. In addition, I consider that nuclear power plants serve as one of the effective power sources in the policy to utilize all power sources.

Q: You mentioned earlier that the Japanese government will provide long-term support to companies that engage in reduction of CO2 emissions. Specifically, do you mean to fully mobilize policies such as budgetary measures, taxation measures, and deregulation?

A: Yes. In particular, there are many areas where technological development is required, as I mentioned earlier. Those areas are, for example, wind power, carbon recycling, storage battery technology, and technology for mass-production of storage batteries. I consider that it would be quite difficult to win in international competition unless the Japanese government provides support for such technological development as well. Therefore, we will take actions by fully mobilizing support in terms of budget, tax, capital investment, research and development, and so forth. I believe that such support will contribute to the emergence of companies in the related areas of technology.

Q: I would like to ask a related question. Japan has lost most of the market share for key devices such as storage batteries, sophisticated solar panels, and offshore wind power facilities, which you have mentioned earlier as important technology, to other countries. Would you tell us your thought about this situation as the minister?

A: Japan usually has the lead at the beginning. Then, it loses market share. The share for general-purpose products has all been lost to other countries. The fact that Japan has been unable to respond to the mass production phase is the reason that Japan's technology could not expand in the past. Under such circumstances, I mentioned among the various key technologies. With regard to solar panels, I believe Japan is still taking the lead in important technologies, including innovative film-type perovskite solar cells and the depositing technology of making solar batteries on a glass substrate. As for batteries, China has overtaken Japan in the mass production phase, but Japan is still capable of regaining the lead at this stage, depending on demand and how capital will be invested. We will take overall measures to deal with these circumstances, while seeking opinions on what kind of taxation support should be provided and what actions the Japanese government should take as there may still be measures that have yet to be proposed. In the area of wind power, government will firmly perform the tasks it should undertake while sharing roles with the private sector.

Q: You talked about utilization of offshore wind power, CCUS, and hydrogen toward achieving decarbonization by 2050. However, all of these are still costly at present and have been difficult to commercialize in actuality. Now that you have steered the policy toward becoming carbon-neutral by 2050, do you have any industrial concerns?

A: On the one hand, we need to succeed in commercial competition, but on the other hand, while many countries have declared to go carbon-neutral by 2050, their domestic regulations are going to change dramatically. In Europe, for example, there are discussions about only accepting finished products for which the supply chain, such as component suppliers, consists of carbon-neutral or net-zero-carbon countries. Such a debate has also emerged in U.S. states, and companies like Apple are going to start supplying and procuring components in that way. Under such conditions, the Japanese economy cannot be expected to grow amid a population decline, if we only look at the domestic market. When we look at the overseas market, a major key would be to firmly incorporate such technology in front of us, and to consider how we should create demand and establish and socially implement technology, with the overseas market in view. Thus, we are carrying out such initiatives.

Q: The announcement of this Carbon-Neutral 2050 really surprised me. I assume that you have appealed to the Prime Minister in order to realize this policy. Could you tell us what you have discussed with the Prime Minister, to the extent possible?

A: This policy was directed by the Prime Minister, and I will be firmly taking individual actions in response to it in society, that is, in the industrial and economic arenas. However, the government has already been working on the issue of coal-fired power generation or measures against climate change. In such effort, Japan has presented the reduction target for 2030 and the target to cut emissions by 80% by 2050, which are quite ambitious figures, and we have been discussing as much as possible with people involved in research and development in various areas of technology and also with companies how we can achieve these targets. I have talked to the Prime Minister about that, but I presume that the Prime Minister has made the decision by hearing about such circumstances from his own advisers. Our task would be to firmly respond to this decision.

Q: According to your earlier statement, do you intend to review the energy mix for FY2030 or review the raising of the greenhouse gas reduction target for FY2030? Or, could it also be taken that there is such a possibility? Could you tell us your thoughts about reviewing the energy mix and raising the reduction target?

A: The meeting of the Advisory Committee for Natural Resources and Energy started on October 13. As the Committee discusses review of the Basic Energy Plan, such reviews are naturally taken into view. I would not be able to tell you about the details based on prejudgments at this stage, but there may be a possibility that the energy mix or the reduction target would change. It depends on how the discussion goes.

Q: Do you mean there is a possibility for a change?

A: I presume there could be such a possibility. Nevertheless, in order to achieve targets by 2030 and 2050, technological development would need to have made certain progress by 2030. In addition, unless the target value for 2030 is achieved, it would be quite difficult to attain net-zero by 2050. Therefore, I consider those targets to be ambitious in light of Japan's current situation. I understand that EU member countries have set the 2050 targets based on the premises that they will abolish coal-fired power generation first and that they will still use fossil fuels in 2050, but they will also use CCUS. Therefore, I am saying that there is a possibility for a change in the sense that such possibility is not zero. I would like to have exhaustive discussions on the reviews, considering what should be done to achieve the target by 2030.

Q: Please let me confirm two more points. I think you said earlier that you will make maximum use of nuclear power plants. However, I believe you have previously said that you do not assume new construction or expansion of nuclear power plants. Can I take it as a declaration to practically start thinking about promoting new construction and expansion?

A: I do not assume new construction, expansion, or replacement at the present stage.

Q: At the present stage. However, if we are to make maximum use of nuclear power plants by 2050, most of the currently existing nuclear power plants will no longer exist.

A: If their life span is 40 years.

Q: Then, will there be a plan for new construction or expansion?

A: As public confidence has yet to be restored, I am unable to refer to this issue. I have consistently answered that I am not thinking about renewal, new construction, or expansion at the present stage.

Q: According to your earlier statement, you will continue use of coal-fired power generation if the emissions are reduced to zero by utilizing CCUS. However, coal-fired power plants, including efficient ones, currently emit CO2 in the course of generating power as they are. Do you not have an intention to prohibit their use in the future?

A: We have also been discussing this point for a long time. Regarding the use of CCUS, as I said earlier for example, the United Kingdom will also use CCUS as a regulated power supply, while it is gas in their case. Thus, they have included use of CCUS to a certain proportion in the 2050 target. It would also be an option for us to use CCUS as we fade out use of inefficient plants. As there are such circumstances, and there is also the possibility of the emergence of technology such as Direct Air Capture, or DAC, based on the idea of "beyond zero" in future technological development, we will be firmly taking actions and having discussions according to the situation, while watching the emergence of such technology. In other words, we cannot discuss the technology in 2050 at the present stage.

Q: Conversely, will there be a plan to eventually abolish all coal-fired power plants that do not use CCUS?

A: We are talking about achieving net-zero or carbon-neutral as a whole, and what we should do to achieve it. Thus, it is not enough to make only coal-fired power generation net-zero. Instead, we should aim to become carbon-neutral by 2050 while discussing and considering all possible measures. The question is what kind of technology can be developed at that time. We still do not know whether we will have achieved the target value for 2030 or what has been developed by 2040. Germany, in the EU, has a target to make a change and abolish all coal-fired power plants by 2038, but we do not know how that will turn out. I would like you to understand that we will firmly hold discussions and make efforts toward becoming carbon-neutral, while also watching the developments in other countries.

Q: In Prime Minister Suga's policy speech to the Diet today, he spoke about establishing a forum for the national and local governments. My first question is how METI will be involved in this forum.

A: I believe the framework has not been developed yet. However, some local governments have declared to become carbon-neutral or net-zero carbon emitters. The question would be what kinds of initiatives should be carried out regarding such local governments, and how the framework should be developed, but we have not been informed of the specifics yet.

Q: Another question. You have been mentioning the EU's initiatives. The EU also seems to be devising various strategies to care in the area of high-temperature industrial heat, which accounts for more than half of total energy. What is your view on this point?

A: As a matter of course, heat utilization will also be a major factor, so we must consider how we should utilize energy, including heat.

Q: You said the government will hold dialogue with companies that are actively engaging in achieving net-zero CO2 emissions by 2050. Specifically, JERA and Tokyo Gas have made such a declaration. However, Keidanren's Challenge Zero activity is considered to be aimed at contributing to society through innovation, rather than achieving net-zero CO2 emissions in a company's activity, and Keidanren's Zero-Emission Challenge has been criticized as being noncommittal. As you have declared to achieve carbon neutrality by 2050 in such a situation, do you as the Minister of Economy, Trade and Industry intend to encourage companies to actively achieve net-zero emissions in their activities, just like JERA and Tokyo Gas?

A: Not only the energy sector, including JERA and Tokyo Gas, but many companies have declared to go carbon-neutral by, for example, 2040 or 2050. We would like to promote the policy while holding frequent discussions with such companies. Keidanren released a comment earlier, and although I have not yet read the entire comment, it indicated that Keidanren highly appreciates the policy as an admirable decision. Therefore, I would like to have in-depth discussions with business leaders as well, and I believe that, by working on the policy together, we will be able to attain Japan's growth by 2050. If we are to think about not only Japan's domestic demand, but also about incorporating overseas demand as well in extension of the conventional economic policy, it will be vital to achieve technological innovation. Otherwise, Japan's industry could become Galapagosized, only left with technologies that cannot compete in the world. Thus, I would like to discuss matters including such points with business leaders.

Q: You have referred to the energy mix in 2030. Do you consider that the Advisory Committee, for example, should study the energy mix for 2040 or beyond?

A: As this is a matter of how discussions will be advanced in the Advisory Committee, it is unknown what shape the discussions will take in response to the Prime Minister's policy speech today, or how the discussions in the committee will develop. To begin with, the committee has started discussions on the energy mix in 2030 and review of the Basic Energy Plan, so the first step will be to draw a conclusion on these. Then, taking 2050 into view, the committee may find it necessary to discuss the energy mix in 2040. Since the question as to what a desirable energy mix would be for achieving carbon neutrality has been frequently and repeatedly raised in the discussions by some members, as well as by myself, such topic is naturally expected to come into view. That is about as much as I can say.

Q: You said earlier that all kinds of measures, including budgetary and taxation measures, will be used. According to a summary by the Green Innovation Strategy Meeting, the budget request for next fiscal year is to include funds of more than 300 billion yen earmarked for green innovation. Do you intend to secure such funds as much as possible? As for taxation measures, will the basic approach be similar to the preferential taxation for capital investment?

A: I would expect the taxation measures to be, for example, those for capital investment or for research and development. If it is a mass production facility for commercialization, it would be taxation measures for capital investment, and if still more technological development is needed, it would be taxation measures for research and development. Nevertheless, as this was mentioned in the policy speech just today, the budget for next fiscal year would be deliberated while making sufficient arrangements with related ministries and agencies, but I would like to secure the budget for such framework by all means.

Q: I think you said earlier that the initiative will be led by METI, a flag-bearer for industry, who understands the actual state of the companies that are boldly taking on these difficult challenges. Minister Koizumi is also committed, but you made such a statement at this time...

A: We will coordinate with each other, but in reality, detailed arrangements would need to be made with the industrial and economic worlds. I think I have said this before, but in order for Japan to make such change without losing international competitiveness, though it may decline temporarily, METI will not only need to set specific numerical targets, but also take specific actions, and a great deal of discussions will be required to work out the details. That is the reason why I put it that way.

Q: I would like to confirm a point in relation to coal-fired power generation. Is it that you do not have a clear image of whether or not to totally abolish coal-fired power plants in Japan by 2050?

A: What I mean is that it involves the issue of technological development. We are conducting demonstration tests of CCUS, and we can already separate and recover nearly 100% of CO2 from coal-fired power plants. We have also already conducted laboratory tests or tests of a slightly larger scale of the technology to utilize the recovered CO2. Therefore, if we only discuss how to reduce costs and how to create demand, I think we can accept application of these technologies, so coal-fired power plants will not have to be totally abolished. Creating a system for utilizing CO2 and preventing it from being discharged into the atmosphere is also a major factor. Thus, instead of looking at individual plants and picking ones to be shut down, I would like to focus on how we could utilize all options that are currently available.

Q: If the plants are not totally abolished, what about 2050?

A: I still cannot imagine whether all plants will have been totally abolished by 2050. I think you probably cannot imagine what kind of technological development will take place either. Technological development makes remarkable progress in 20 or 30 years. If quantum computers combined with artificial intelligence appear and simulation technology advances, it may become possible to conduct technological development at an astonishing speed. I would like you to understand that I am assuming such developments as well.

Q: In the context of whether or not the plants should be fully abolished, you do not know what the situation will be in 2050.

A: What I mean is that we will make efforts to become carbon-neutral, and use of CCUS, which is technology to store, separate, recover, and utilize carbon, is one of the measures that could be used in that process. For example, if there are also gas-fired power plants, they will emit CO2 as well. Creating a system to prevent such CO2 from being discharged into the atmosphere is technological development. I would like you to understand that we will not only focus on refraining from use of fossil fuel, which is a source of CO2, but will also carry out innovation and technological development by using all kinds of means and technologies.

Q: You mean that CO2 may grow into an important resource depending on the future situation, and that demand for coal-fired power plants may have increased by then?

A: I would not say they would have increased. I think there is no doubt that the number of plants will be reduced, because we are abolishing those that are considered to be inefficient at present. However, we inevitably have to use such energy as regulated power supply, as no country is running on renewable energy alone. Even the United Kingdom has indicated that it will burn gas as regulated power supply for about 30% of the energy mix and that it will actively develop CCUS. Therefore, I would like you to understand that it is a question of how a balance should be achieved under such circumstances, and that I will not make a prejudgment at this stage.