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Japan’s ammonia push in Southeast Asia seen as aiding coal

  • January 14, 2022
  • , Nikkei Asia , 3:07 p.m.
  • English Press

JUNTARO ARAI, Nikkei staff writer


TOKYO — Japan bolstered cooperation with Indonesia, Thailand and Singapore on ammonia and hydrogen fuel under new agreements clinched by Japan’s trade minster this week, but the approach has raised international criticism as helping coal power.


Japan aims to develop technology for ammonia-exclusive firing — generating electricity using just ammonia — by 2030, Japanese Economy, Trade and Industry Minister Koichi Hagiuda said at an online event Monday during his trip to Indonesia.


As part of Hagiuda’s Southeast Asia tour, Japan signed a memorandum of understanding to cooperate on ammonia technology with Indonesia, which generates the majority of its electricity from coal. It also signed a memorandum to build supply chains for hydrogen and ammonia with Singapore, and to provide expertise to help Thailand map a path toward decarbonization.


The Japanese government has sought to help the region curb carbon emissions by gradually introducing cleaner fuels like ammonia, carving out a separate niche from the U.S. and Chinese focus on renewable power. But environmentalists have slammed Japan’s plans for essentially providing life support for coal power, clouding Tokyo’s hopes of tapping new decarbonization-related opportunities in emerging Asia.


Southeast Asia is home to many newer coal power plants. Updating these facilities to run on a combination of coal and ammonia can reduce carbon dioxide emissions without having to shut them down completely, and could pave the way for them to eventually run entirely on ammonia.


Japan’s Ministry of Economy, Trade and Industry sees Hagiuda’s trip as a successful step toward developing and creating demand for new decarbonization technologies, given positive comments from his counterparts.


“We need support from international partners in our energy transition,” Indonesian Minister for Energy and Mineral Resources Arifin Tasrif said.


From left, Japanese Economy Minister Koichi Hagiuda, Thai Prime Minister Prayuth Chan-ocha, and Thai Energy Minister Supattanapong Punmeechaow after signing a memorandum of understanding on decarbonization cooperation on Jan. 13. (Photo courtesy of the Thai government)

Still, there is almost no demand for ammonia as a fuel today. Ammonia-exclusive firing is not expected to become a widespread option until at least 2030, and efforts to cut carbon emissions using the fuel in the meantime will focus on co-firing with coal.


Emerging countries in Southeast Asia and beyond have struggled to balance decarbonization efforts and economic growth, putting them behind the U.S. and Europe in cutting emissions.

Indonesia, Thailand and Singapore — which represent three of the top five Associated of Southeast Asian Nations economies — together currently rely on coal, petroleum and natural gas for between 80% and over 90% of electricity production. Thailand aims to achieve net-zero emissions by 2050 and Indonesia by 2060, while Singapore has not set a deadline.


Japan has advocated for emerging economies to gradually shift away from carbon-based fuels. But this approach contrasts sharply with the growing push by the U.S., Europe and China to build more renewable power capabilities, and could narrow Japan’s climate-related opportunities in Southeast Asia.


At the COP26 climate change summit in Glasgow, Scotland in November, Japanese Prime Minister Fumio Kishida called for the greater use of ammonia and hydrogen fuel. The comment received international backlash as a backward-looking approach to climate change.


Ammonia as a fuel does not emit carbon dioxide. But the process to make ammonia does, meaning it cannot be considered a clean energy source unless these emissions are captured and stored. Japan could face even tougher criticism over its focus on ammonia, which is seen in regions like Europe as a Band-Aid that only buys more time for coal power plants.


Japan is already losing clout in Asia as China expands its Belt and Road infrastructure initiative in the region, while the U.S. pushes for multilateral cooperation in digital trade and supply chains under its Indo-Pacific economic framework. Hagiuda’s push for new partnerships on decarbonization reflects growing concern within Tokyo that Japan could lose out on related opportunities in growing Asian markets.

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