Search for a report, a publication, an expert...
Institut Montaigne features a platform of Expressions dedicated to debate and current affairs. The platform provides a space for decryption and dialogue to encourage discussion and the emergence of new voices.

Gas and the Energy Transition: Japan’s Turnaround

Gas and the Energy Transition: Japan’s Turnaround
 Joseph Dellatte
Resident Fellow - Climate, Energy and Environment

Decarbonization strategies vary around the globe. For instance, many European countries are designing a transition that includes an enhanced temporary reliance on gas. The logic behind this choice is simple: gas is the least polluting fossil fuel; gas prices used to be relatively cheap; and gas-fired power plants have the shortest start-up and stopping time available to compensate for renewable energy intermittence. This strategy, however, exposes Europe to geopolitical risks. As the recent Russian-engineered gas crisis in Europe reminds us, the logic of the market is sometimes superseded, or combined with other political interests. It is therefore in the interest of Europe, which is often taken as a laboratory, to look at other regions’ plans concerning the role of gas in achieving carbon neutrality.

This two-part paper, written by our Asia Program’s new Research Fellow Joseph Dellatte, examines Japan and China, which take contrasting approaches concerning the role of gas in their energy transition plan. The first part of this paper focuses on the Japanese 2030 power sector transition plan. It emphasizes a historical change of view toward the role of gas in the land of the rising sun. This paper also portrays how Japanese authorities search for new pathways after the trauma of the Fukushima Daiichi nuclear incident.

An unexpected Nippon adventure 

Historically, Japan has been the country of Liquified Natural Gas (LNG). It initiated the LNG technology in the 1970s, primarily because of its growing industrial needs and insularity. Hence, energy experts were stupefied when the Japanese government released its latest 2030 energy generation target report. This report unexpectedly scheduled a fall of about 50% in planned gas usage for electricity generation by the end of this decade - from 37% to 20% of the Japanese energy mix. This decision is part of Japan’s net zero by 2050 plan, organized around the "3E" strategy: Energy security, Environment (emissions reduction), and Economic efficiency. Against this backdrop, Japan plans a serious cut in fossil fuel use within this decade by targeting gas even more heavily than coal.

Figure.1 Japan planned transition in the power sector (In Bn kWh)

Table.1 Evolution of the power sector energy demand in Japan’s energy transition plan 



Total energy demand in TWh1024930
GHG reduction ratio in the energy sector -46%
Non-fossil fuel share in energy sector24%60%


This unexpected decision is also a result of a dramatic change of heart concerning nuclear energy. First sent to oblivion after the Fukushima Daiichi nuclear incident, nuclear energy is now slated to make a huge comeback in the Japanese energy mix (from 6% of the total energy generation in 2019 up to 22% in 2030). This will require 27 out of its remaining 36 nuclear reactors to resume operations. However, safely resuming long-closed nuclear facilities might be much harder than Japanese authorities hope. In this event, coal, not gas, will be the safety net… for reasons of economic efficiency!

While the share of nuclear energy is set to increase, Japan also plans to achieve the most impressive progress in renewables, increasing from 18% in 2019 to about 38% in 2030. This implies adding solar panels to millions more roofs in the country, which is already leading the world in installed solar panels per square meter. Combined with enhanced efforts on energy sobriety - 9% decreases for 2030 (2019 baseline) - it could propel Japan closer to its Paris ambition. 

From LNG import to hydrogen import 

Beyond this power sector decarbonization strategy, gas will still represent 20% of Japan’s total energy supply by 2030. With respect to the decarbonization of the non-electricity sector energy demand, the country plans to bargain on imports from Green Hydrogen Hubs and overseas Carbon Capture and Storage in order to meet its net-zero 2050 target. While hydrogen represents only 1% of the energy demand forecast in 2030, Japan aims to reach 10% by 2050 and evolve into a "Hydrogen society" in the long-term. So far, this is a technological gamble on an immature technology that will require heavy R&D investments in the following decades. Last month, the port of Kobe received the world's premier shipment test of liquified hydrogen from Australia. Such a choice aims to answer the needs of industry and transports for liquified green fuel, by replacing gas and oil with liquified hydrogen. A solar-intensive country would thus generate carbon-neutral hydrogen from green technologies - or through less environmentally friendly Carbon Capture and Storage (CCS) technologies - and then export it to Japan. 

Bearing this transition strategy in mind, Japan has also begun planning a diversification of gas supply, through more flexible contracts and lower imports. The country did not renew its historical contract with Qatar, much to the displeasure of the Emirate since Japan was its biggest customer. As a result, China will become the main player in the Qatari energy report plan, taking over almost all of the room left by Japan. Europeans will only weigh about 12% on the Qatari LNG contract sheets by 2030. This trend is representative of the sharp increase in gas demand by the end of a decade that is critical to fighting climate change.

In sum, Japan's strategy involves massively investing in renewable energy development, especially solar energy, as well as two big bets on hydrogen and nuclear energy. For flexibility, the strategy is to move away from gas in the power sector and consider nuclear energy instead. This mix is considered controversial by a population that is still traumatized by the memory of 2011's earthquake and tsunami, and who runs a risk of unforeseen difficulties in restarting long-closed facilities. However, if successful, it would secure both Japan's accelerated environmental transition towards net zero (fewer emissions) and enhanced energy security.


Copyright: Kazuhiro NOGI / AFP

Receive Institut Montaigne’s monthly newsletter in English