My Vision No.53
2021.4The Road to Realization of a Carbon-Free Society
On October 26, 2020, Prime Minister Suga declared that Japan would become carbon-neutral by
2050 in his policy speech to Japan’s Diet, clarifying his stance in relation to decarbonization.
In this issue of My Vision, we explore the path towards realization of this goal.

About This Issue

The Many Challenges Towards the Realization of a Carbon-Neutral Society– Sketching Out Scenarios and Responding Steadily Along the Time Axis
Yuri Okina
NIRA Executive Vice President／Chairperson, The Japan Research Institute, Limited
Keywords…Carbon-neutral 2050, green growth strategies, COP21 Paris Agreement, SDGs, European Green Deal,
responses on the energy supply and demand fronts, technological innovation, reform of industrial structure andsocial systems, circular economies, scenarios for social transition

Expert Opinions

The Road to Realization of a Carbon-Free Society
What challenges face us in realizing net-zero CO2 emissions by 2050?
Are there paths towards the realization of this goal?

Realize Scenarios based on Decarbonized
Thermal Power

Fulfillment of Our Responsibility for
Decarbonization based on Realistic
Approaches

Takeo Kikkawa

Hisahide Okuda

Professor, Graduate School of International
Management, International University of Japan

Corporate Vice President / Managing Executive
Officer, Chief Operating Officer, Corporate
Strategy Department, JERA Co., Inc.

Keywords…Social implementation of decarbonizedthermal power, securing and reducing cost ofammonia, CCS, responses from non-electric power
sectors, resource-rich Australia

Keywords…Combination of renewable energy andzero emission thermal power, roadmaps tailored tonational and regional circumstances, smoothtransitions, power generation using ammonia,
offshore wind power

It will be Vital to create Systems thatallow Highly Cost-effective Measures tosurvive

Governments Must Strengthen Policies
Quickly to Achieve Climate Goals

Toshihiro Matsumura

Keisuke Sadamori

Professor, Institute of Social Science,
The University of Tokyo

Director, Energy Markets and Security,
International Energy Agency (IEA)

Keywords…Electrification scenarios, combination ofstrategies, mechanisms for natural selection of
measures that most efficiently achieve net-zeroemissions, carbon pricing

Keywords…IEA analysis, coal-intensive industrial
sector, fuels used in long-distance transportation,
rapid policy deployment throughout the world, paceof “one factory per hour,” total mobilization of policy
measures

Australia and Japan will enter a New Era
of Energy Relations
David Lowe
Minister-Counsellor (Economic),
Australian Embassy to Japan
Keywords…Signatories to Paris Agreement, focus on
both economy and outcomes, innovation in lowemission technologies, strategic partnership between
Australia and Japan, hydrogen strategies, COP26

Interview period：February, 2021
Interviewer : Kozue Sekijima（NIRA Research Coordinator,
Researcher）

This is a translation of a paper originally published in Japanese. NIRA bears full responsibility for the translation presented here.
Translated by Michael Faul.
Copyright Ⓒ 2021 by Nippon Institute for Research Advancement

My Vision No.53
2021.4
About This Issue

The Many Challenges Towards the Realization of a Carbon-Neutral Society– Sketching Out Scenarios and Responding Steadily Along the Time Axis
In October 2020, in his policy speech to the Diet, Japan’sPrime Minister Yoshihide Suga declared the goal of making Japan
carbon neutral by 2050. Following this, the government
formulated its “Green Growth Strategy.” Prime Minister Suga’s
declaration was received favorably both within Japan and abroad.
A number of trends lie behind this declaration, as discussed below.
First, under the Paris Agreement, reached by the 21stConference of the Parties to the United Nations Framework
Convention on Climate Change in 2015, signatories must “[Hold]
Yuri Okina
the increase in the global average temperature to well below 2°C
NIRA Executive Vice President／
above pre-industrial levels and [pursue] efforts to limit the
Chairperson, The Japan Researchtemperature increase to 1.5°C above pre-industrial levels.” Japan
Institute, Limited
has begun to move toward achieving a balance between
greenhouse gas emissions and the use of carbon sinks. In international financial markets, there has
been an increasing tendency towards the attempt to fulfill social responsibilities, for example in thefact that numerous institutional investors have recently signed the UN Principles for Responsible
Investment (2006), and ESG investment has been expanding. Furthermore, the spread of COVID-19
since 2020 has significantly changed people's values. The awareness of biodiversity and the risk ofclimate change has increased even at the consumer level, and contributing to the achievement of theSDGs (“Sustainable Development Goals” set with a view towards 2030), adopted at the United Nations
General Assembly in 2015, has attracted increased attention.

Europe accelerates decarbonization, the United States returns to the fold. It is now an
irreversible movement
Against the background of the spread of COVID-19, the movement to balance the protection of
the environment and growth through green recovery (a way of thinking that focuses on rebuilding the
economy while controlling climate change) is further accelerating, in particular in Europe. The EU has
already set a binding target of achieving a carbon-free society by 2050 in its “European Green Deal” of
2019, and has set this as a growth strategy. In 2020, the EU established the enormous EU
Reconstruction Fund in order to further promote the strategy. In Europe, the shift to renewable energy
such as solar power, hydropower, and wind power is already underway, but what is accelerating more
recently is joint public-private efforts towards the realization of hydrogen energy that also utilizes
renewable energy and other energy sources. China has also declared that it will achieve
decarbonization by 2060. In addition, Joe Biden, the new President of the United States, hasrecommitted to the Paris Agreement, which the US left during the Trump administration, and plans toprovide significant financial support. In Japan, the achievement of carbon neutrality has been adifficult goal, but the movement towards it is already irreversible. Given this, in this issue of My Vision,
we asked Japanese and foreign experts with detailed knowledge of these issues how they view the pathto achieving carbon neutrality and what challenges face its achievement.

Towards the supplementation of renewable energy by decarbonized thermal power, theelectrification of industry and households, and the design of price mechanisms
In relation to Japan’s next Energy Basic Plan, which is currently under discussion, Professor
Takeo Kikkawa of the International University of Japan tells us that with regard to energy supply, thekey to the realization of decarbonization will be whether it is possible to steadily increase the volume
of decarbonized thermal power generated by the combustion of ammonia and thus compensate theThis is a translation of a paper originally published in Japanese. NIRA bears full responsibility for the translation presented here.
Translated by Michael Faul.
Copyright Ⓒ 2021 by Nippon Institute for Research Advancement

My Vision No.53
2021.4fluctuating output of renewable energy, which will become the main power source in the future. In
order to achieve this, it will be essential to secure a supply of ammonia and reduce costs. Hisahide
Okuda, an executive of JERA, Japan’s largest power generation company, believes that this strategy isa realistic approach, and discusses in this issue the necessity for expanding the use of renewable energy
while utilizing existing technologies and equipment, at the same time as ensuring a smooth changeoverto the use of new technologies in response to technological advances. Although it is difficult to predictthe progress of technological innovation in the future, with regard to the Basic Energy Plan, we canindicate the importance of establishing a rational plan for the year 2050, and strategicallydecarbonizing while modifying multiple scenarios in response to technological innovation.
Professor Toshihiro Matsumura of The University of Tokyo points out the importance of“electrification,” a process in which electricity replaces other energy sources on the demand side,
concurrent with the implementation of measures on the energy supply side. This will necessitate thepromotion of electrification in the industrial and household sectors. Professor Matsumura emphasizes
the importance of system design that ensures the natural survival of cost-effective measures in orderto advance the utilization of a variety of forms of energy towards the reduction of CO2 emissions. He
indicates that in addition to a transition from feed-in tariffs to market-linked prices for renewableenergy, the introduction of carbon pricing, in which the entities responsible for carbon emissions bear
the costs associated with them, will be the most important policy direction in the future. It might besaid that the realization of carbon neutrality is dependent on determining how to design systems of thetype suggested by Professor Matsumura at the same time as gaining the understanding of companies.

Mobilize all policy measures in order to achieve the goal
Keisuke Sadamori, Director of Energy Markets and Security for the International Energy
Agency (IEA), points out that the number of countries announcing that they will seek to achieve netzero CO2 emissions by 2050 is increasing together with dramatic declines in the cost of renewableenergy, and the movement towards research and development in this area is extremely rapid
throughout the world. Looking at these international trends, the fact that it will not be easy for Japanto achieve net-zero emissions without mobilizing all technologies and measures must sound an alarm,
and it is necessary in particular to pay attention to Mr. Sadamori’s emphasis on the importance ofgovernment support for technological development. David Lowe, Minister-Counsellor (Economic) of theAustralian Embassy to Japan, tells us that while Australia has not yet declared a specific net-zeroemissions target, the nation has a strong commitment to the Paris Agreement, and is steadily making
efforts towards decarbonization while maintaining a balance with the national economy. Mr. Loweanticipates that the cooperative relationship between Australia and Japan, for example in a hydrogenstrategy that makes optimal use of the country's resources, will become even more important in thefield of new energy in the future. Professor Kikkawa also emphasizes the importance of strengthening
cooperation with Australia, a resource-rich country, for Japan's decarbonization. While there are issues
regarding carbon border adjustments for each nation involved, it remains the case that Japan will be
required to adopt more strategic measures internationally in the future.
We face many challenges in achieving carbon neutrality. It will be extremely important that
we respond not only on the energy supply front, but also on the demand side, in the industry,transportation, and household sectors. What will be required is not only a national commitment totechnological innovation, but also, in addition to the promotion of changes to the industrial structure
and reform of social systems, the offering of attention and support to those affected. Furthermore, thepublic will be required to change its behavior, looking towards the realization of a circular economy
through actions such as the reuse of resources. The government will be required to draw up scenarios
for social transition towards carbon neutrality together with local governments and private companies,
respond to issues along the time axis, and steadily realize a carbon-free society with the involvementof the public.
Dr. Okina is an Executive Vice President of the Nippon Institute for Research Advancement (NIRA) and the Chairpersonof The Japan Research Institute, Limited. She holds a Ph.D. in Economics from Kyoto University. Dr. Okina serves innumerous public positions, including as a member of the Industrial Structure Council of the Ministry of Economy, Tradeand Industry.
This is a translation of a paper originally published in Japanese. NIRA bears full responsibility for the translation presented here.
Translated by Michael Faul.
Copyright Ⓒ 2021 by Nippon Institute for Research Advancement

My Vision No.53
2021.4
Expert Opinions

Realize Scenarios Based on Decarbonized Thermal Power
Prime Minister Suga's announcement on October 26
last year that Japan would seek to achieve net-zero CO2emissions in 2050 was accepted as possessing a certain degree of
persuasive power. This is because JERA, Japan's largest
thermal power generation company, had recently declared its
vision of "decarbonized thermal power," based on the burning ofammonia. With this, the social implementation of net-zeroemissions in the “electric sector” became a realistic possibility at
one fell swoop. If decarbonized thermal power can beincorporated in the energy system, there will be significant
Takeo Kikkawa
change in commonsense notions of power generation in Japan.
Professor, Graduate School ofInternational Management,
The issues in the case of decarbonized thermal power
International University of Japanare securing a sufficient quantity of ammonia and reducing costs.
If ammonia-fired thermal power is realized as indicated, a hugedemand for ammonia will develop. The creation of a stable supply chain will be an important turning
point in securing an adequate volume of supply. In addition, there are only four carbon dioxide captureand storage (CCS) facilities, by means of which CO2 generated in the ammonia production process
would be captured and stored underground, in the world either in operation or planning, and there isalso a problem in terms of cost. Furthermore, in Japan, the potential storage area for CO2 recoveredby CCS is limited. If Japan were to rely on other countries for storage, the establishment of “bilateralcredit,” determining how to allocate the amount of CO2 reduction achieved to one’s own country, would
represent a significant hurdle.
In the power source composition of 2050, decarbonized thermal power can be considered torepresent about 40% in relation to the main renewable energy. The government estimates that the totalof thermal power and nuclear power will be 30 to 40%, but if the use of decarbonized thermal power
grows and compensates for the volatility of the output of renewable energy, the use of renewable energy
as a main power source will increase, and the proportion of nuclear power may decline. I do not thinkthat this point represents a significant difference of opinion with the government.
On the other hand, the“non-electric sector,”which accounts for 60% of Japan's energy demand,
does not even have a long-term outlook. This sector is yet to formulate its responses. While promoting
the electrification of automobiles and household energy, the fuels employed will be changed to hydrogenand ammonia. The gas industry will use a technology called “methanation” that produces methane,
which is the main component of natural gas, from hydrogen and CO2, and the petroleum industry willuse “e-fuel,” a synthetic hydrogen and CO2 fuel, as an alternative to gasoline. In addition, how should
we approach hydrogen power generation? These are important shifts towards decarbonization.
Relations with resource-rich countries, especially Australia, will be an important factor inprocuring resources, using CCS, and utilizing abundant wind/solar and coal/natural gas resources.
Geopolitically, Australia will become a key nation in the distribution of resources in the Indo-Pacificregion given the context of the decoupling of the US and China. Cooperation between Japan andAustralia will be indispensable in enabling Japan to make its decarbonization scenario a reality.
Professor Kikkawa specializes in Japanese business history and energy industry theory. He has held his current position
since 2020, following terms as a Professor in The University of Tokyo’s Institute of Social Science, a Professor in the
Hitotsubashi University Graduate School of Commerce and Management, and a Professor in the Tokyo University of
Science’s Graduate School of Innovation Studies. Professor Kikkawa studies the Japanese energy industry from abusiness administration perspective, and has a deep knowledge of energy policy. He has served as a member of councils
in the Agency for Natural Resources and Energy of the Ministry of Economy, Trade and Industry, and is a member of
the Strategic Policy Committee of the Advisory Committee for Natural Resources and Energy. Professor Kikkawa holds
a Ph.D. in Economics (The University of Tokyo).
This is a translation of a paper originally published in Japanese. NIRA bears full responsibility for the translation presented here.
Translated by Michael Faul.
Copyright Ⓒ 2021 by Nippon Institute for Research Advancement

My Vision No.53
2021.4
Expert Opinions

Fulfillment of Our Responsibility for Decarbonization
Based on Realistic Approaches
JERA, Japan’s largest power generation company,
has a considerable responsibility for the achievement of zeroCO2 emissions. It owns approximately half of Japan’s thermal
power plants and supplies 30% of the nation’s electricity. The
company’s CO2 emissions represent 10% of total emissions inJapan. Last year, we presented three approaches to therealization of decarbonization by 2050 in order to clarify ourstance on this goal.
The first approach is to combine renewable energy
Hisahide Okuda
with “zero-emission thermal power.” Zero-emission thermal
Corporate Vice President /power is thermal power generation that does not emit CO2.
Managing Executive Officer,
Because current thermal power generation uses fossil fuels
Chief Operating Officer, Corporatesuch as coal and natural gas for power generation, it produces
Strategy Department, JERA Co., Inc.
CO2. The fuel for power generation will gradually be replacedwith ammonia and hydrogen. The second approach is toimplement roadmaps that match the circumstances of the specific country or region, such as its stageof economic growth, geographical conditions, and infrastructure status. For example, emerging Asian
nations in which electricity demand is growing will find it difficult to accept the European model of
100% renewable energy due to the existence of newly-built coal-fired power generation facilities. The
third approach is to achieve smooth transitions according to the technological level. While making thebest use of existing equipment and technology, we would rapidly move to the next step as soon as
technological development progresses.
The Japanese roadmap offers a path for implementation based on these assumptions. First,
technology for co-firing ammonia, which does not emit CO2 during combustion, with fossil fuels will be
put into full-scale operation by the latter half of the 2020s. The technology is currently at thedemonstration stage, and we will gradually increase the co-firing rate, aiming to generate electricity
using only ammonia by 2050. At the same time, this thermal power will be combined with renewableenergy. The output of renewable energy is affected by natural conditions such as sunshine and wind,
but its supplementation with thermal power will allow a smooth expansion of the use of these energy
sources. Even if fossil fuels are replaced with ammonia, it will be possible to use existing assets suchas power plants and power transmission lines, enabling the achievement of low-carbonization anddecarbonization at an early stage at low cost. Furthermore, we will proceed with the study of “floating”
offshore wind power facilities that can be installed at sea even close to Japan. This type is more suited
to Japan than the bottom-fixed type that is fixed to the seabed, because the nation has few shallow
waters. We will also seek to reduce costs by mass producing equipment.
There is more than one prescription for achieving decarbonization by 2050. Many European
businesses are aiming towards operation using 100% renewable energy. However, we believe that thestrategy of combined use of renewable energy and thermal technologies is optimal for Japan. This is arealistic scenario, and will certainly reduce CO2 emissions. That is our approach to decarbonization.
Mr. Okuda has led the business strategy behind the Decarbonization Declaration announced by JERA in advance of thegovernment’s declaration, including the formulation of “JERA Zero CO2 Emissions 2050.” After joining Chubu ElectricPower Co., Inc., he served in positions including Manager of the Business Strategy Group, Corporate Strategy
Headquarters, Manager of the Alliance Promotion Office, Corporate Headquarters, and Director of the Corporate
Strategy Department and Managing Executive Officer for JERA Co., Inc. JERA was established in 2015 via investment
by Tokyo Electric Power Co., Inc. (as the company was known at that time) and Chubu Electric Power Co., Inc., and isengaged in energy business in Japan and overseas. Mr. Okuda is one of the key persons on the Chubu Electric Powerside who was instrumental in establishing JERA. He is a graduate of the Waseda University Faculty of Political Scienceand Economics.
This is a translation of a paper originally published in Japanese. NIRA bears full responsibility for the translation presented here.
Translated by Michael Faul.
Copyright Ⓒ 2021 by Nippon Institute for Research Advancement

My Vision No.53
2021.4
Expert Opinions

It Will Be Vital to Create Systems That Allow Highly
Cost-Effective Measures to Survive
The achievement of net-zero CO2 emissions by 2050 iscertainly not merely a pipe dream. The most feasible scenario is the“electrification scenario”. What this means is that our source ofenergy will be changed to electricity to the greatest extent possible,
and that electricity will be produced by a zero-emission powersource such as renewable energy. In addition to this, power demandthat cannot be satisfied by electricity will use sources including
zero-emission hydrogen and bioenergy. Carbon capture, storage
and utilization (CCSU), a process which recovers the CO2 that is
Toshihiro Matsumura
generated and either stores it or utilizes it as a raw material, is also
Professor, Institute of Social
a powerful means of achieving zero emissions. Even if CO2 is still
Science, The University of Tokyo
emitted in certain fields, these emissions will be able to be offset by
negative emissions produced by activities such as forest conservation and afforestation, the capture of
CO2 from the atmosphere, and a combination of zero-emission biopower generation and CCSU, among
other approaches. Combinations of these strategies will enable net-zero CO2 emissions to be achieved.
The way to move forward will not be to set out detailed target values for the future
electrification rate, power source types, or ratio of renewable energy and other sources. The correct
path towards the realization of net-zero emissions will be to create mechanisms by means of whichthose numerical figures that most efficiently realize net-zero emissions are selected naturally inresponse to the outcomes of future innovation. It will be essential to create electric power and energy
systems in which optimal combinations are naturally selected, by developing mechanisms that allow
entities which perform desirable functions such as stably supplying electricity and energy to attract
remuneration commensurate with their social value, and in which, in addition, those which can supply
this value at low cost survive based on competition. If we decide on specific numbers and continually
implement policies that are doomed not to achieve them, it is unclear as to how much the burden on
the public will increase. Subsidies and other government support should be provided only to thoseentities which respond to social values such as external economies, rather than targeting specific powersources, etc. After clarifying the nature of externalities, we should provide fair support to those entities
which satisfy them, and thus realize an efficient society through fair competition.
From this perspective, the transition from feed-in tariffs (FIT) to a market-linked approach(feed-in premiums, or FIP) represents a step forward. FIP, which adds a premium unit price (as support
from the government) to market prices which fluctuate depending on the social value of electricity, is asystem of remuneration that is more commensurate with social value, more transparent, and fairer
than FIT.
The most important policy towards the realization of an ultra-low carbon society is “carbon
pricing,” which makes the entities responsible for carbon emissions bear the social costs associated withemissions. Even if there is strong resistance from various sectors, this is the fundamental requirement
for the realization of such a society. We must consider bold reforms for the radical redesign of the energy
tax system, such as unifying the existing distorted energy taxes into a carbon tax.
Professor Matsumura specializes in the study of industrial organizations and public economics. He has held his current
position since 2008, following terms in positions including Associate Professor in the Department of Social Engineeringof the Tokyo Institute of Technology, and Associate Professor in the Institute of Social Science of The University of Tokyo.
While analyzing the governing principles of public enterprises in mixed oligopolistic markets and their relationship withregulatory reform, Professor Matsumura also conducts research on energy markets such as the electricity and city gas
markets. He is a member of official bodies including the Procurement Price Calculation Committee of the Ministry of
Economy, Trade and Industry, the Strategic Policy Committee of the Advisory Committee for Natural Resources andEnergy, and the Specialized Meeting for Policy Design of the Electricity and Gas Market Surveillance Commission.
Professor Matsumura holds a Ph.D. in economics from The University of Tokyo.
This is a translation of a paper originally published in Japanese. NIRA bears full responsibility for the translation presented here.
Translated by Michael Faul.
Copyright Ⓒ 2021 by Nippon Institute for Research Advancement

My Vision No.53
2021.4
Expert Opinions

Governments Must Strengthen Policies Quickly to
Achieve Climate Goals
In the eight years since I joined the IEA, policy development
has been rapid in the fields of energy and response to climate change
throughout the world. An increasing number of countries, including
Japan, have set the goal of achieving net-zero CO2 emissions by 2050.
The decarbonization of the electricity sector has become
realistic due to the declining cost of renewable energy. However, IEA
analysis shows that the existing and announced policies ofgovernments throughout the world are far from the level required in
Keisuke Sadamori
order to achieve the goals of the Paris Agreement. In fact, the COVIDDirector, Energy Markets
19 crisis led to a 6% decline in CO2 emissions in 2020 compared to theand Security, International
previous year, but CO2 emissions recorded a 2% year-on-year increase
Energy Agency (IEA)
in December 2020 as a result of economic recovery. It is particularly
difficult to decarbonize sectors other than electricity. These sectors account for 60% of the world's CO2
emissions. No viable methods or technologies for decarbonization have been fully developed for industry
sectors such as steelmaking, which uses blast furnaces requiring an enormous amount of coal, and formodes of long-distance transportation such as airplanes and ships, which use oil-based fuels. Half ofthe emission reductions required to achieve net-zero emissions by 2050 would have to come fromtechnologies that have not yet been commercially deployed.
In addition, if existing elements of energy infrastructure such as factories, buildings, andpower plants continue to operate as they have in the past, it would lock in sufficient emissions to cause
a temperature rise of 1.65 degrees.
It will be essential for governments to be actively involved in driving technological innovationand ease the risks of research and development for private sector companies. One area for suchgovernment support is “Green hydrogen,” which is hydrogen produced by splitting water using
renewable electricity. The world's largest factory for the production of green hydrogen is located in
Fukushima Prefecture. A production facility of this scale needs to be added every hour until 2050 toreach the volume of low-carbon hydrogen required to achieve the target for 2050. The role ofgovernments will be to establish policies to facilitate deployment of these new technologies in themarket. The IEA plans to publish a roadmap for achieving net-zero emissions worldwide by 2050 in
May 2021, and will support governments’ efforts to accelerate decarbonization of their economies.
This represents a significant technological challenge, but research and development in thisarea is progressing at a tremendous pace throughout the world. This should be seen as an opportunity
for Japan, which lacks oil and gas resources. Net-zero emissions involve technologies for energy
efficiency, renewable energy, CCUS, hydrogen, nuclear power, and technologies for enabling stablesupply of electricity. All technologies and measures must be mobilized in order to achieve net zero
emissions. We do not have the luxury to choose which one to use.
Mr. Sadamori has held his current position since October 2012. He is responsible for the analysis of energy market trends
in areas including oil, gas, coal, electricity, renewable energy and energy efficiency, in addition to energy security. After
entering the Ministry of International Trade and Industry (now the Ministry of Economy, Trade and Industry), he held
various positions in the Government of Japan, not only in METI but also in the Japanese Embassy to the United States
and the Cabinet Secretariat, among others. He served as one of the direct assistants to the Prime Minister when the
Great East Japan Earthquake happened, and worked on the response to the Fukushima Daiichi Nuclear Power Plant
accident. Mr. Sadamori is a graduate of the Faculty of Law, The University of Tokyo.

This is a translation of a paper originally published in Japanese. NIRA bears full responsibility for the translation presented here.
Translated by Michael Faul.
Copyright Ⓒ 2021 by Nippon Institute for Research Advancement

My Vision No.53
2021.4
Expert Opinions

Australia and Japan Will Enter a New Era of Energy
Relations
Australia is a country at the frontline of climate change,
as can be seen for example from the enormous bushfires that
occurred last year. The nation’s commitment as a signatory to theParis Agreement is unwavering, and reflecting this agreement,
Australia is committed to achieving zero CO2 emissions by thelatter half of the 21st century. The issue of energy and CO2
emission reduction is not an ideological one. It will be important
to make steady progress balancing both the economy andachieving emissions reduction outcomes. Australia will continue
David Loweto achieve results despite not having declared a specific net-zero
Minister-Counsellor (Economic),emissions target.
Australian Embassy to Japan
Fossil fuels continue to occupy an important position inAustralia’s economy, and Australia is focusing its efforts oninnovation in low-emissions technologies. In addition to expanding the utilization of existing
technologies, we will support the creation of new technologies with a high level of practicality,
expandability, and commercial viability. If we can continue to innovate on low-emissions technology
over the next 30 years, we can expect great results. In the 15 years from 2005 to last year, Australia
has already reduced emissions by a little less than 17 per cent. Our investment in new renewableenergy per capita is progressing 10 times faster than the world average.
Australia and Japan have a special strategic partnership in which our nations sharefundamental values, and our two nations have deepened cooperation in a diverse range of areas overthe course of many decades. In the case of mining and energy, Japanese investment in coal and ironore in the 1960s and 1970s, and in LNG in the 1980s, contributed significantly to the development ofAustralia's export industries. Australia provides a stable supply of resources for Japan, and the twocountries have an extremely complementary relationship. Building on this, I believe that a new era ofenergy cooperation between our two nations will soon begin.
Australia has a considerable untapped potential to generate renewable energy, including windand solar. Furthermore, cooperation between Australia and Japan is already underway to develop
technology to utilize the nation’s resources. In particular, an increasing number of governments andcompanies are developing hydrogen strategies, and a project to build a hydrogen energy supply chain
from the state of Victoria to Japan is at the demonstration stage. Plans for CO2 capture and storage in
Victoria are also underway. In the future, we have great expectations that investment from and offtakeagreements with Japan for green hydrogen and green ammonia will grow in prominence.
If you look globally, much of the increase in CO2 emissions from here on will come from China
and other emerging and developing nations. Collaboration between Australia and Japan ininternational discussions such as COP26 this fall will be important in ensuring that these nations
become more involved in emission reduction efforts. I believe that Australia-Japan relations willcontinue to be very important in a variety of ways as we work to achieve decarbonization.
Mr. Lowe has held his current position since January 2019, after serving as a policy economist with Australia’s Treasury.
He also serves as the representative of the Australian Treasury in Japan. He has also served as an economist at the
Department of Foreign Affairs and Trade and the Australian Productivity Commission. Across those roles, he has been
involved in areas including tax policy, R&D policy, international economic analysis, medium- to long-term economic andfiscal projections, screening of inbound foreign investment, trade policy, and competition policy. Since first arriving inJapan to study at the age of 17, he has had the desire to become a bridge between Australia and Japan in the areas ofboth the economy and society. Mr. Lowe holds a bachelor’s degree in Economics from Yokohama National University anda master's degree in Economics from the Australian National University.

This is a translation of a paper originally published in Japanese. NIRA bears full responsibility for the translation presented here.
Translated by Michael Faul.
Copyright Ⓒ 2021 by Nippon Institute for Research Advancement