Japan Embraces Lab-Made Fuels Despite Costs, Climate Concerns

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(Bloomberg) — For Japan’s largest utilities, lab-made fuels are a meaningful step toward greener energy that also extends the life of billions of dollars’ worth of existing fossil-fuel infrastructure.

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For their critics, products like “e-methane” and “syngas” are not an attractive compromise but an expensive distraction, at a time when the country — already a climate laggard in global terms — should instead be accelerating its shift to renewable power.

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Eager to win over naysayers, companies like Electric Power Development Co. and Osaka Gas Co. have seized on this year’s World Expo in Osaka, packing last week’s launch event with mascots, virtual reality — and their plans to incorporate alternative fuels into existing systems. A transformation, they argue, can be achieved without compromising on energy security or the stability provided by their pipelines and fleet of power plants.

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“The beauty of e-methane is that we can continue using our existing natural gas infrastructure,” said Yosuke Kuwahara, director of the carbon neutrality promotion office at Osaka Gas. The company showcased a small-scale facility producing what it called the “gas of the future” at the sustainability-themed Expo, traditionally an opportunity for countries to showcase technological prowess.

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The gas is one of several synthetic fuels created through chemical processes and designed to replicate the properties of conventional fuels, with the added aim of making them easier to replenish and less polluting.

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Japan remains the most fossil-fuel reliant among the Group of Seven advanced economies, with low-carbon sources making up roughly a third of its energy mix. Its utilities have long justified their continued use of dirty fuels by saying large-scale solar and wind deployment is limited by the island-nation’s geography, or that nuclear energy will take time to ramp up after a years-long hiatus due to safety concerns. 

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Slowly introducing alternative fuels into the mix is “a way to decarbonize,” said senior fellow with the International Environment and Economy Institute, Sumiko Takeuchi, who has advised the government on its energy strategy. By using plants already in service, that can be done with limited risk to the nation’s power supply, she added.

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‘Gas of the Future’?

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Japanese utilities say e-methane is chemically almost identical to natural gas but is effectively carbon-neutral because of the environment-friendly way in which it’s produced. 

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At the Expo, Osaka Gas demonstrates how carbon dioxide captured from the venue’s food waste can be blended with green hydrogen, made using renewable energy, to generate e-methane. On a larger scale, CO2 can be captured from landfills and factories to produce it for millions of customers, said Kuwahara.

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Osaka Gas is building an e-methane plant in Niigata and plans to substitute the fuel for 1% of the gas it delivers to households by 2030. Tokyo Gas Co. has a similar goal. Japan has said it may boost that to as much as 90% e-methane by mid-century, according to a 2023 presentation made by the Ministry of Economy, Trade and Industry. 

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Burning e-methane, however, still releases the greenhouse gases it’s composed of — meaning those planet-warming emissions must then be captured and stored. 

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Without that last step, “you just delay the emissions,” said Hiromitsu Miyajiri, a program coordinator with Kiko Network, a Japanese environmental group. “It’s not going to result in a reduction in emissions.”