Fossil fuels, such as petroleum, natural gas and coal, accounted for 90% of the primary energy consumed in Japan in fiscal 2016. Our daily lives and economic activities are supported by fossil fuels.
While we should avoid excessive reliance on fossil fuels, drastically reducing our dependence on these fuels is unrealistic. However, the environment surrounding fossil fuels is rapidly changing. It is important to find sustainable ways to use fossil fuels.
According to the outlook in the “Basic Energy Plan,” a long-term guideline for Japan’s energy policy, fossil fuels will account for 75% of primary energy and 56% of electric power generation in fiscal 2030.
Even if we increasingly use renewables such as sun and wind power and restart nuclear power plants, fossil fuels will remain the principal source of our energy supply for quite some time.
For example, according to the long-term outlook, coal will provide 26% of fuel for power generation in fiscal 2030. This target surpasses those for renewables and nuclear power generation.
However, the Paris Agreement, which laid out the future course of global warming countermeasures, came into force, casting a harsh light on coal-burning power generation because of the greater amount of carbon dioxide emissions compared with other resources. Financial institutions, which attach importance to environmentally-friendly measures as corporate appraisal benchmarks, and investors are increasingly ceasing to finance and invest in coal-burning power generation.
Japan, which is currently reviewing the basic plan, needs to check whether it has set appropriate goals.
Coal does have advantages such as price competitiveness, abundant reserves, and wide availability in the world. Emerging countries, which are eager for rapid infrastructure development, ensure there will be a constant demand for coal. It is not easy to break away from coal.
Japan has the state-of-the-art technology capable of reducing carbon dioxide emissions and airborne contaminants. If Japan continues to use coal, such technology needs to be further improved and actively disseminated to emerging countries.
According to the current Basic Energy Plan, petroleum will remain the largest primary energy source in Japan in fiscal 2030. Compared with electricity and gas, petroleum is easier to transport and store. Its importance in stabilizing procurement and supply remains unchanged.
On the other hand, against the background of Japan’s shrinking population, domestic demand for petroleum products such as gasoline and diesel is decreasing and there is the possibility that electric vehicles (EVs) may become widespread.
How will such a trend affect petroleum consumption overall? How will EV charging stations be developed and how will the network of gas stations be maintained at the same time? We must begin to prepare for the future keeping in mind the changes in fuel sources.