Japan 2021 Energy Policy Review INTERNATIONAL ENERGY AGENCY
Total Page：16
File Type：pdf, Size：1020Kb
Japan 2021 Energy Policy Review INTERNATIONAL ENERGY AGENCY The IEA examines the IEA member IEA association full spectrum countries: countries: of energy issues including oil, gas and Australia Brazil coal supply and Austria China demand, renewable Belgium India energy technologies, Canada Indonesia electricity markets, Czech Republic Morocco energy efficiency, Denmark Singapore access to energy, Estonia South Africa demand side Finland Thailand management and France much more. Through Germany its work, the IEA Greece advocates policies Hungary that will enhance the reliability, affordability Ireland and sustainability of Italy energy in its Japan 30 member countries, Korea 8 association Luxembourg countries and beyond. Mexico Netherlands New Zealand Norway Poland Portugal Please note that this Slovak Republic publication is subject to Spain specific restrictions that limit Sweden its use and distribution. The terms and conditions are Switzerland available online at Turkey www.iea.org/t&c/ United Kingdom United States This publication and any The European Revised version, map included herein are without prejudice to the Commission also May 2021. status of or sovereignty over participates in the Information notice any territory, to the work of the IEA found at: delimitation of international frontiers and boundaries and www.iea.org/ to the name of any territory, corrections city or area. Source: IEA. All rights reserved. International Energy Agency Website: www.iea.org Foreword The International Energy Agency (IEA) has conducted in-depth peer reviews of its member countries’ energy policies since 1976. This process supports energy policy development and encourages the exchange of and learning from international best practices. By seeing what has worked – or not – in the “real world”, these reviews help identify policies that deliver concrete results. Japan was a founding member of the IEA back in 1974 and has remained an important and active member ever since. I am particularly grateful to Mr Hiroshi Kajiyama, Minister FOREWORD of Economy, Trade and Industry, and his colleagues for the strong collaboration the IEA enjoys with Japan today and believe this will be instrumental in building a secure and sustainable global energy future. Since the IEA last review of Japan’s energy policies in 2016, Japan has diversified its energy mix through the gradual expansion of renewable energy and the restart of nuclear power plants. This has benefitted both Japan’s energy security and the climate globally – Japan’s greenhouse gas emissions have now fallen for five consecutive years. But the challenge ahead is considerable. While Japan is well on track to meet its 2030 climate goals, its dependence on fossil fuels remains high. A very significant reduction of greenhouse gas emissions post-2030 will be necessary if Japan is to realise its ambition of achieving carbon-neutrality by 2050. Japan’s strong innovation and technology base will play a vital role in developing the technologies needed to achieve its energy and climate ambitions. I applaud Japan for its leadership in advancing low-carbon hydrogen and carbon-recycling technologies, which will be crucial in decarbonising so called “hard-to-abate sectors”. But at the same time as these emerging technologies are scaled up, I encourage Japan to also accelerate its energy transition in sectors where low-carbon alternatives are already available, notably in the power sector. Wind and geothermal power have large potential in Japan and can complement the emissions reductions being achieved through the expansion of nuclear and solar energy. The IEA welcomes Japan’s decision to phase out inefficient coal power plants by 2030, which marks a turning point in Japan’s clean energy transition. Japan has made important strides in reforming its domestic electricity and natural gas markets. The increasing competition in these sectors is encouraging, but further reform is needed to achieve a true level playing field for all market participants. Additional regulatory reforms will also be important to encourage investments in zero-emission electricity and to improve power system flexibility. It will also be necessary to ensure that the market regulator has sufficient powers and independence. Energy security remains a focus area for the IEA and a priority for the Japanese government. The continued diversification of energy sources is an important development in this regard. I congratulate Japan for its recent steps to strengthen the resilience of its electricity system. I strongly believe that the policy and regulatory reforms proposed in this report can help Japan advance its energy and climate goals while supporting its economic growth. As it has done since 1974, the IEA will continue to stand side-by-side with Japan as it moves ahead with the process of implementing the next round of its domestic energy and climate policies as well as on the important work it is leading on global clean energy transitions. Dr. Fatih Birol Executive Director International Energy Agency 3 IEA. All rights reserved. IEA. TABLE OF CONTENTS ENERGY INSIGHTS Foreword ..............................................................................................................................3 1. Executive summary .....................................................................................................13 Overview ............................................................................................................................13 Japan’s vision of a decarbonised society ..........................................................................13 Main energy goals to 2030 ................................................................................................15 Electricity and gas market reform ......................................................................................16 Strengthening the resilience of the energy sector .............................................................17 Key recommendations .......................................................................................................17 2. General energy policy .................................................................................................19 CONTENTS OF TABLE Country overview ...............................................................................................................19 Supply and demand ...........................................................................................................21 Primary energy supply .......................................................................................................22 Energy production and import dependency ......................................................................23 Energy consumption ..........................................................................................................24 Japan’s general energy policy strategy .............................................................................26 Japan’s envisioned energy mix to 2030 ............................................................................26 Japan’s transition to a carbon-neutral society by 2050 .....................................................27 Liberalising electricity and gas markets ............................................................................29 Energy security ..................................................................................................................30 Taxation and subsidies ......................................................................................................31 Fossil fuel subsidies ..........................................................................................................32 Assessment .......................................................................................................................33 Liberalising electricity and gas markets ............................................................................34 Transition to a zero-carbon, resilient energy sector ..........................................................34 Recommendations .............................................................................................................37 ENERGY SYSTEM TRANSFORMATION 3. Energy and climate change ........................................................................................41 Overview ............................................................................................................................41 Japan’s energy-related CO2 emissions .............................................................................43 Carbon intensity of the Japanese economy ......................................................................45 Climate change governance ..............................................................................................46 5 IEA. All rights reserved. IEA. TABLE OF CONTENTS Japan’s emissions reduction targets and policies .............................................................47 Main mitigation policies .....................................................................................................50 Carbon pricing ...................................................................................................................57 Other cross-cutting measures ...........................................................................................59 Innovation ..........................................................................................................................59