GJETC Outreach Event: Heading for carbon neutrality – Key strategies for Germany and Japan

The challenges posed by the increasing global climate crisis call for more substantial actions. COP-26 has brought new momentum towards achieving climate neutrality. At the GJETC Outreach Event “Heading for carbon neutrality: Key strategies for Germany and Japan” on Thursday, 25th November 2021 Dr. Karsten Sach, Director-General of Climate Policy, European and International Policy Department at the Federal Ministry of the Environment, Nature Conservation and Nuclear Safety/Germany and Prof. Jun Arima, Professor for Energy & Environmental Policies at the University of Tokyo and GJETC Council Member, shared their impressions and conclusions from COP 26 in Glasgow.

The German and the Japanese study teams of GJETC gave insights into the ongoing comparative study on long-term scenarios assessing the different strategies and approaches of reaching carbon neutrality by 2045/50 in Germany and Japan.

Program

Press release

German long-term scenarios

Japanese long-term scenarios

We would like to say thank you to all the participants. Please find below some of the answers to the questions posted in the chat by the participants.

Question 1: Working for leading Japanese companies covering among others decarbonization of industry I had the most fruitful discussions with operators and researchers involved in actual CCUS/hydrogen utilization projects.  This gives a good insight view of the possible realization of scenario considering TRLs, market developments etc.  I hope it will be possible soon to have direct exchange of view again with experts in Japan as well as visit promising projects in Japan and Europe. (Ralf Eyssen Japanese-European Environment & Energy Center)

Answer by the German study team:

Dear Ralf Eyssen, thank you for your comment. As we have already announced, we are planning to present the results of our studies upon finalization in February 2022 on the occasion of the next Council Meeting. The complete studies will then be published on our website in March 2022.

Concerning the direct exchange of views, we are planning to continue Outreach Events. Recently, we have also started Innovation Roundtables that aim to enhance the dialogue between suppliers and users as well as science and industry to stimulate innovations and find solutions, among others for the decarbonization of industry. The first Innovation Roundtable was held on November 5th.

Question 2: Are you trying to achieve these carbon neutrality goals while eliminating nuclear power plants in Germany? In order to build a hydrogen society, the question is how to produce hydrogen cheaply, in large quantities, and without carbon. In Japan, there is a debate about whether to import blue carbon or to procure hydrogen from a nuclear power plant called FTTR. Will Germany be able to procure the required amount of green hydrogen alone? How will you secure the power to regulate the connection of renewable energy to the grid if you abolish fossil fuel-fired power generation? Can all of this be provided by pumped storage and storage batteries alone? It is inevitable that fuel prices and electricity bills will rise if we go carbon free. And if the cost rises further due to carbon pricing policies, will Germany be able to maintain its international competitiveness? (Fujio Mitsui)

Answer by the German study team:

Following the accident at the Fukushima Daiichi plant in March 2011 the German government has decided the nuclear phase-out, which will be realized in 2022. While some people in Germany argue that nuclear power would be needed in order to reach climate-neutrality, the owners of nuclear power plants have come to the conclusion that nuclear power, in Germany, is not profitable anymore. All scenarios assume the phase-out of nuclear energy as well as the coal phase-out (differing in the year) and conclude that reaching carbon neutrality by 2045 would be technically and economically feasible, given a considerable increase of renewable energies, increasing energy efficiency, and electrification, to name the three most important strategies.

While the studies acknowledge a rise of electricity prices, economic feasibility as well as aspects of social justice (“just transition”) are also been discussed. The assumed increase of the supply of green electricity is driven by the higher demand of electric power in all sectors, especially for E-mobility, heat pumps and electricity-based process transformation in industry. Rising costs can be partly compensated by energy cost savings due to increased efficiency – it is ultimately energy bills that matter, not the price per kWh. Some scenarios (e.g. BDI) calculate an amount of total energy costs in 2045 comparable to the reference case (see also answer to question 5) To ensure social justice and public acceptance, the studies also discuss mechanisms to compensate for higher energy costs for vulnerable households.

Concerning the international competitiveness of Germany’s industry, the necessity for transformation and decarbonization can also be considered as a huge opportunity to further develop innovative technologies (“GreenTech”) for global “lead markets” (e.g. energy and resource efficiency, sustainable mobility, renewables) enabling decarbonization strategies all over the world and by that potentially create competitive advantages.

Question 3: German energy mix in 2045 is almost 100pecent renewable with hydrogen. How intermittency can be dealt with? Hydrogen is good or abundant enough? How much does energy cost (Masakazu Toyoda, Former Co-Chairman of the GJETC)

Answer by Stefan Thomas (from the chat on Nov 25th)

To Mitsui-san and Toyoda-san: demand response and vehicle2grid have potential for flexibility too. Scenarios also assume 5% of power from green hydrogen. Most hydrogen and synfuels are assumed to be imported, but this is a point in which different scenarios are analyzed, because the potential and cost of imports is not very clear today. About the incremental cost of 100% renewables (incl. ca. 5% of green hydrogen) in the power system: the BDI study estimated it to be 0.6 ct./kWh compared to the reference scenario; and no increase vs. 2020; see our presentation slide no. 20.

Question 4: Is geothermal Energy in Japan not possible due to stark vulcanic activity? (Sebastian Ortlieb)

Answer by Hideaki Obane:

Thank you for your question. In Japan, geothermal power potential exists in national parks, where Japanese law regulates the construction of power plants. Moreover, hotel owners of hot springs also sometimes oppose to the construction. Hence, social consensus must also be considered.

Question 5: While the average temperature rise is a global approach, why aren’t funds dedicated to reduce GHG applied to investments with the highest carbon reductions globally. Limiting these investments to our own countries are not the best utilization for money to reach the global goal. (Hisham Alsharif)

Answer by the German study team:

In our view this position can be counterproductive because it does not reflect on the principle of “common but differentiated responsibilities.” Industrialized countries have a historical and per capita responsibility to reduce their high energy and resource consumption by domestic decarbonization strategies. On the other hand, they should help the global South by capital and know-how transfer to leap-frog to advanced technologies and to protect especially vulnerable countries against the damages of climate change. Thus, the pledge of $100bn annual aid by rich countries for poor countries should be implemented earlier than 2025.

Question 6 to all speakers: The Glasgow Climate Pact adopted at COP26 calls on countries to phase down coal and to phase out subsidies for fossil fuels. Again, the background of Japan already having a new government and Germany is about to have one, what are your expectations regarding coal and fossil fuel finance? (Florentine Koppenborg)

Answer by the German study team:

The debate on phasing out coal as early as possible under the specific frame conditions of Japan (e.g. security of supply as an Island country) and Germany (e.g. probably strong regional impacts in two coal regions) is ongoing. In Germany, decarbonization scenarios up to 2045 show that a complete phase out of coal should be reached in 2030 at the latest. Thus, “ideally” this target was accepted by the new government. The implication of this decision is of course a strong signal to the financial sector to stop external financing of coal. Japan is also heading for tightening rules for foreign coal-fired power stations and ending government funding for projects. The debate on the use of natural gas is ongoing in Germany. There seems to be a consensus that natural gas is needed for a certain transition period. But e.g. the necessary build-up of gas power plants as a flexibility option and to stabilize security of fluctuating supply from renewable sources should not lead to lock in effects. Thus, newly built gas power plants should be constructed “hydrogen ready”.

Answer by the Japanese study team:

Japan has declared carbon neutrality in 2050 and direct burning of coal shall be diminished until then. Private sectors have already started moving toward the direction and this movement may become faster and stronger in the future. Japan is also seeking new technologies to make coal power plants decarbonize e.g. like CCUS. Japan is open to any type of decarbonization options to prepare for an uncertain future.