Briefing Paper“WHY stakeholders need to engage with JERA? -smoke and mirrors of ‘JERA Zero Emission 2050’”

About JERA: Background●JERA is a Japanese electric power company as a 50/50 joint venture between TEPCO
Fuel & Power, Inc. and Chubu Electric Power Co., which combines the thermal power
generation businesses of the two companies. JERA is involved in a wide range ofbusinesses, from engineering and consulting in the thermal power sector torenewable energy, gas and LNG businesses.

●In October 2020, the company made its “JERA Zero CO2 Emissions 2050”
announcement. JERA is a member of the Public-Private Council on Fuel Ammonia
Introduction and is promoting the introduction of ammonia and hydrogen as
so-called “zero emission fuels.”1

JERA and the coal power business●JERA is the largest electric power producer in Japan, with generating capacity of 70
GW,2 of which coal power generation makes up 12.4 GW, or 17.7%.3●

Coal power generation in Japan amounts to 58.94 GW, of which JERA’s coal power
generation has the largest share at 20.4%.

●The company is also involved in power generation overseas, at a total generation
capacity of 9.40 GW (consolidated output),4 of which coal accounts for 3.34 GW.5

Source: Japan Beyond Coal (as of October 2021)
1

METI, “List of members of the Public-Private Council on Fuel Ammonia Introduction” (in Japanese)
https://www.meti.go.jp/shingikai/energy_environment/nenryo_anmonia/pdf/001_03_00.pdf
2
JERA “At a glance” (in Japanese, last accessed 26th Oct 2021) https://www.jera.co.jp/corporate/infographics
3
Japan Beyond Coal “Map and Data” (in Japanese, last accessed 26th Oct 2021)
https://beyond-coal.jp/map-and-data/#tab2_tab-data3
4
JERA “At a glance” (in Japanese, last accessed 26th Oct 2021) https://www.jera.co.jp/corporate/infographics
5
From the JERA website.

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Briefing Paper“WHY stakeholders need to engage with JERA? -smoke and mirrors of ‘JERA Zero Emission 2050’”

JERA Zero Emissions 2050
●On October 13, 2020, the company announced a “JERA Zero CO2 Emissions 2050
Roadmap for Business in Japan.”6 The roadmap states that thermal power generation
with “zero emission fuels” including hydrogen and ammonia, as well as renewableenergies, will be used with the aim of reaching zero CO2 emissions in 2050. In addition,
CO2 emissions from power plants that cannot operate with 100% zero emission fuels in2050 will be handled with offset technologies and CO2-free LNG, etc.

●As for coal-fired power plants owned by JERA, the company says it will shut down anddecommission all inefficient (below supercritical) coal-fired power plants by 2030, andaim to start 20% co-firing with ammonia in 2030, and 100% ammonia-fired by 2040.
However, as of September 2021, JERA does not own any coal power plants that use
below supercritical technology. In addition, starting 20% ammonia co-firing in 2030
means that coal will continue to be used as fuel after 2030, which is inconsistent withinternational requirements (see the next section). Furthermore, regarding theYokosuka Thermal Power Station Units 1 and 2, which are currently under construction
and are scheduled to start operation after 2023, despite inquiries from local residents,
the path to zero-emission thermal power generation has not been shown.

●Fuel ammonia is assumed to be imported
from Australia and Saudi Arabia. Hydrogen,which is the raw material for ammonia, isproduced by reforming natural gas.
Hydrogen is planned to be "blue hydrogen"by using CO2 emitted during natural gas
mining and reforming to promote crude oilrecovery (CO2 EOR).However, the carbon
footprint of but blue hydrogen is higher
than coal (see the figure on the right), and it
can be said that blue ammonia produced
from "blue hydrogen" is not suitable as asolution for climate change.7●As for renewable energy, the company says that it will mainly promote thedevelopment of offshore wind energy but at present, projects (including those at aplanning stage) in which JERA is participating domestically amount to 1.12 GW or lessthan 10% of the company’s coal power holdings.8 JERA has not announced any future
generation targets for renewable energy.

6JERA “JERA Net zero emission” (last accessed 26th Oct 2021) https://www.jera.co.jp/english/corporate/zeroemission
Robert W. Howarth,Mark Z. Jacobson, 12 August 2021, “How green is blue hydrogen?”, Energy Science andEngineering, https://onlinelibrary.wiley.com/doi/full/10.1002/ese3.956
8JERA,“Submission and Public Review of the Primary Environmental Impact Consideration Document for theSouthern Tsugaru Offshore Wind Power Generation Project”, March 8, 2021
https://www.jera.co.jp/english/information/20210308_645; “Submission and Public Review of the Planning Phase
Environmental Impact Statement for the Ishikari Bay Offshore Wind Farm Construction Project.”, August 24, 2021,
https://www.jera.co.jp/english/information/20200824_524
7Friends of the Earth Japan（https://www.foejapan.org/en/）

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Briefing Paper“WHY stakeholders need to engage with JERA? -smoke and mirrors of ‘JERA Zero Emission 2050’”

JERA’s predicament●As serious damage from climate change intensifies, the world does not have theluxury of allowing GHGs emissions to increase any further. To prevent further damage
from climate change and to achieve the 1.5C target under the Paris Agreement, JERA
needs policies that will lead to a rapid and credible reduction in GHG emissions.

●At their meeting in June 2021, G7 leaders recognized that coal power is the largest
emitter of GHG emissions, and committed their countries to large-scaledecarbonization of their domestic power systems, and [promised to take concrete
steps toward an absolute end to new direct government support for unabatedinternational thermal coal power generation.

●

Upon publication of the Working Group 1 contribution to the IPCC’s Sixth Assessment
Report (The Physical Scientific Basis) released in August 2021, UN Secretary General
António Guterres made an appeal for the following.9○

No new coal-fired power plants are to be constructed after 2021.

○

OECD countries must phase out existing coal power plants by 2030, and allother countries by 2040.

○

All countries should end all new fossil fuel exploration and production, andshift fossil fuel subsidies into renewable energy.

Financial industry trends relating to coal●

As a part of climate initiatives by financial institutions, a growing wave of investors areconducting engagement or divestment targeting companies that continue to invest
in and finance coal power.

●For example the Asia Investor Group on Climate Change (AIGCC) is targeting
numerous power utilities in Asia for engagement to promote decarbonization,including Chubu Electric Power Co and J-POWER.10●Urgewald, a German environmental NGO, publishes the Global Coal Exit List of theworld’s top companies in the coal business. The list has been used as a tool fordivestment actions, and Chubu Electric Power Co and TEPCO are both on the list.11

9

UN “Secretary-General's statement on the IPCC Working Group 1 Report on the Physical Science Basis of the Sixth
Assessment” Aug 9th 2021
https://www.un.org/sg/en/content/secretary-generals-statement-the-ipcc-working-group-1-report-the-physical-scienc
e-basis-of-the-sixth-assessment
10
AIGCC “New investor-led engagement program launched to drive net zero emissions transition in Asian electricutilities” n.d.
https://www.aigcc.net/new-investor-led-engagement-program-launched-to-drive-net-zero-emissions-transition-in-as
ian-electric-utilities/
11
Urgewald, Global Coal Exit List 2021 (last accessed 26th Oct 2021) https://coalexit.org/

Friends of the Earth Japan（https://www.foejapan.org/en/）

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3Briefing Paper“WHY stakeholders need to engage with JERA? -smoke and mirrors of ‘JERA Zero Emission 2050’”●

Norway’s sovereign wealth fund is increasingly divesting from companies that get
their revenues from coal-related businesses. In 2017, Japanese companies affected
included J-POWER, Chugoku Electric Power, and Hokkaido Electric Power.12, 13

The required role of JERA as a “global leader thatsupports our energy future”●To achieve the 1.5˚C target of the Paris Agreement, we need measures that lead torapid and credible GHG emission reductions. JERA’s Zero Emissions 2050 planrelies on supposedly zero-emissions thermal power that requires the newexploration and production of fossil fuels. This is exactly what people could call“zero emissions washing.”●

JERA should actually be moving toward a complete phase out of the coal power
in its portfolio by 2030. As a first step, JERA is urged to stop building the Yokosuka
coal-fired power plant that is currently under construction.

●

Rather than chasing an illusion of “zero emission” thermal power by relying onhydrogen and ammonia produced through more exploration and production offossil fuels, JERA should be aiming for true CO2 zero emissions by 2050 by relying
on renewable energy.

Yokosuka power plant under construction (Kanagawa Prefecture, Japan, photo Sept. 24, 2021

12

Nikkei “Norway Pension fund divest Japanese companies” March 3 2017,https://www.nikkei.com/article/DGXMZO13593800S7A300C1X93000/ (in Japanese)
13
NBIM, “Observation and exclusion of companies” (Last accessed 26th Oct 2021)
https://www.nbim.no/en/the-fund/responsible-investment/exclusion-of-companies/

Friends of the Earth Japan（https://www.foejapan.org/en/）

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