Prospects on East Asia’s Peace & Prosperity

1
Development of Decarbonization Technology Key
to Achieving Energy Security & Environmental
Protection in East Asia
By Guo Sizhi
Introduction
We are currently undergoing an energy crisis triggered by the
Russian invasion of Ukraine and the conflict in the Middle East, inparallel with increasing damage caused by climate change. In thesecircumstances, the trend toward decarbonization in East Asia isdrawing increasing attention. In this article, after a survey on the
Industrial Revolution and the decarbonization revolution so far, I
introduce some observations on the principal characteristics in thedevelopment of decarbonization technologies towards a carbon
neutral economy in Japan, China, South Korea and Taiwan. I alsomention my outlook on the creation of an alliance of decarbonizedsupply chain green industries to achieve carbon neutral economy inEast Asia.

Industrial Revolution & Decarbonization
Revolution
The decarbonization revolution is the transformation of recent
industrial activity to realize a carbon neutral economy, involving
technological innovation, new production patterns and attitudes ineveryday life, and new industrial organization and management
models for the reduction of carbon emissions. Decarbonization’s
technological domains are energy, transportation, manufacturing,and home and office related industries as shown in Charts 1 & 2. We
are currently witnessing the arrival of this decarbonization revolution,
which is the next generation industrial revolution towards a carbon
neutral economy initiated by decarbonization technology.
It is notable that previous industrial revolutions benefited from theinfluence of newly invented technologies that were passed on fromgeneration to generation. There was a continuous succession of
invented technologies superimposed at different periods. For
example, in the second half of the 19th century, the second industrial
revolution’s “period of emergence” with heavy and chemicalindustries was superimposed on the “period of maturity” of the firstindustrial revolution (railroads and postal services). Likewise, the“period of emergence” of the third industrial revolution with the IT
industry was superimposed on the “period of maturity” of thesecond industrial revolution with the services industry.
With those three industrial revolutions, the invention anddevelopment of technologies and products needed for humancivilization and society were mostly exhausted, and so it is thought
https://www.jef.or.jp/journal/

Author Guo Sizhithat it would not be easy to have further revolutionary innovations,and the opportunities to implement them would be restricted.
However, since the beginning of the 2010s, the Fourth Industrial
Revolution has been starting in areas like IoT, AI, and new energy.
Innovations in this revolution are now starting to have a big influence
upon economic society in the 21st century, and on human beings’
production patterns, lifestyles and values.
The commonality among industrial revolutions so far has been thedriving force of each revolutionary process. Coal and steam engines
were the driving force of the first industrial revolution; in the second
revolution it was petroleum, the internal combustion engine andelectric motors; and in the third, nuclear power or renewable energy,
and information and automation technologies were highlighted. The
driving force of the fourth industrial revolution is technology for
utilizing Big Data such as AI and IoT and technologies enabling fossil
fuel and non-fossil fuel energy to co-exist with the network capacityand fossil fuels as the main players.
Each industrial revolution’s core technology was considered
critical. But it was necessary to manufacture products by machinesthat embodied that technology. In each industrial revolution, productmanufacturing was achieved by a mechanical system using the coretechnology. For example, the steam engine – the core technology
and detonator of the first industrial revolution – produced textile

CHART 1CO2 emission amounts by sector
Others30 million tons

90% of CO2 emissions fromenergy transformation sector are
from electric power (the rest fromoil refineries, etc.)

Industrial process
50 million tons
Home sector
50 million tons

Transportation
sector
200 million tons

Office sectors
60 million tons

CO2 Emissions
1,110 million tons

Energytransformation
430 million tons

Industrial sector
280 million tons

Source: “White Paper on Energy” 2020, Agency for Natural Resources and Energy, METI

Japan SPOTLIGHT • July / August 202449

CHART 2

Decarbonization technology-related industries
Japan and the other key nations are actively involved in development of decarbonization technologies in the industrial activities, mobility and life-relatedareas, and the energy & electricity area.

Growth areas will expand from now
until 2030 and 2050
Energy-related industry①Offshore wind powerindustry
Windmill, components,
floating offshore wind energy

Transportation・Manufacturing-related industry⑤Automobiles/batteries
industry

EV, FCV, next generation batteries⑥Semiconductors,
information andtelecommunication industry
Data centers,
energy saving semiconductors(raised efficiency on demand side)②Ammonia fuel industry
Burner for power generation(fuel in transition towardshydrogen society)③Hydrogen industry

Turbines for power generation,hydrogen reduction steelmaking,transportation ships,
water electrolysis equipment④Nuclear power industry

SMR (Small Modular Reactors)・
hydrogen producing nuclear power⑦Shipbuilding industry
Fuel Cell ships, EV ships andgas fuel ships etc.
(hydrogen and ammonia)⑨Food and agriculture,
fishing and forestry industry
Smart agriculture, skyscrapers
in woods, blue carbon⑧Logistics, movement ofpeople, civil engineeringand infrastructure industry
Smart traffic, drones for logistics,
fuel cell powered construction
equipment

Home and Office-relatedindustry⑫Housing, constructionindustry/next generation
solar industry(Perovskite solar cell)⑬Resources recycle relatedindustry
Biomaterials, recycled materials,
waste power generation⑭Lifestyle-related industry
Decarbonized business in the local
community⑩Aircraft industry
Hybrid electric aircraft,hydrogen aircraft⑪Carbon recycle industry
Concrete, biofuel,plastic raw materials

Source: Agency for Natural Resources and Energy, METI

goods by operating spinning machines through a system oftransmission to make them work as precisely as possible.
Likewise, the internal combustion engine and electric motors inthe second revolution helped create products and vehicles byactivating transportation machines and machine tools. Automation
control and computing technology, as keys of the third revolution,
provided operating machines with computing capacities and memory
equipment and thus enabled them to produce more efficiently.
In the fourth industrial revolution, the key innovative technology of
IoT combines IT with machines and goods, and thus realizes
Internet-connected production and distribution in the economy. Its
main areas of application are manufacturing, health care, logistics,
agriculture and traffic. As this revolution proceeds, decarbonizationis accelerated towards a carbon neutral economy. Table 1 lists manyof the new technologies and R&D towards decarbonization that theworld can look forward to.
The driving force of the decarbonization revolution is the
50 Japan SPOTLIGHT • July / August 2024

development and utilization of new and renewable energy sourcesand decarbonization technology in sectors like industries andmobility. Above all, technology to store green energy, such as a next
generation battery, will be a vital part of future industrial policy.
My own view is that the driving force technology of industrial
revolutions has become increasingly complex, diversified andcomprehensive.
It took more than 100 years since the first revolution to have asecond one. Around another 100 years was needed from the second
one until the third one. But it took only about 50 years from the third
one to the fourth. This is because technological innovation has been
accelerated significantly. The fourth industrial revolution and thedecarbonization revolution that has just begun are even more closelyinterconnected and the interval between them will be shortened
further.
Though the next-generation industrial revolution is still in the earlystages, we are starting to see its key technology, driving force andTABLE 1

55 notable technologies concerning decarbonization
CO2 circulation

Artificial Photosynthesis

Water Electrolysis

E-Fuel (Synthetic Fuel)

Lithium-Ion Secondary
Batteries

PEM (Polymer Electrolyte
Membrane) Water
Electrolysis

SOEC (Solid Oxide
Electrolysis)

Methanation

Hydrogen Engine

Lithium Titanate Negative
Electrode Lithium-Ion
Batterie

Power to Chemicals

Amine Absorbed CO2
Collected

CO2 Separation Membrane

Replaceable Battery

Metal Lithium Negative
Electrode Secondary
Batteries

Hydrogen Firing

Hydrogen Gas Turbine

Ammonia Gas Turbine

MaaS (Mobility as a service)

Silicon Negative Electrode
Secondary Batterie

Liquid Ammonia Firing

Gas Turbine Combined
Cycle

High Temperature Gas
ReactorMicro EV

Aqueous Lithium-Ion Battery

Small Modular Reactor

Renewable Energy Selfconsignment

Ammonia (NH3)

Bearing for EV

Perovskite Solar Cell

Floating Offshore Wind
EnergyCarbon Pricing

Hydrogen Storage Alloy

Next-Generation Power
Semiconductor

Cellulose Nano Fiber

SE leadCO2 Free Natural Gas
Modification

Methylcyclohexane (MCH)All Solid State battery

Biomass Plastic

High Voltage Direct
Current (HVDC)

Green Hydrogen

Hydrogen Sensor

All polymer Battery

Pararesin

Nuclear Fusion Reactor

Hydrogen Reduction
Steelmaking

FCV (Fuel Cell Vehicle)

Lithium Sulfur Secondary
Battery

Hydrogen Reduction

Space Solar Power

Supercritical Geothermal
Power Generation

VPP (Virtual Power Plant)

Photonics -Electronics
Convergence Technology

Wireless Power Supply

Sources: Compiled by the author on the basis of the ”Remarkable Carbon Neutral Technologies 50” ·”100 technologies transforming the world 2024”, Nikkei BP
TABLE 2principal energy sources. I believes they will be
Relations between each industrial
hybrid. Its key technology and driving force are therevolution’s key technology & its objects
utilization of IoT and AI and additionally nextThe First Industrial Revolution
steam engine(prime mover) → conduction
generation new and non-fossil energy technology(1760s-1860s)
mechanism → operational machine– more specifically, electric power and energy
internal combustion engine(prime mover) → conduction
The Second Industrial
conservation technology such as all solid statemechanism → operational machine
Revolution (1860s-first half of
20th century)
batteries co-existing with IoT and AI, and alsohydrogen engines. Their energy sources will be
automatic control, computer (core technology) → objects,
The Third Industrial Revolution
conduction machine → operational machine(second half of 20th centurynon-fossil energy like renewables.
beginning of 21st century)
The common factor among industrial
The Fourth Industrial Revolution
IoT, AI (core technology) → objects, conduction
revolutions so far was that through their core
(after 2010s)
machine → operational machinetechnologies – the driving force behind each one –Decarbonization Industrial
IoT, AI plus storage of electricity, hydrogen engine, new
the revolutions were realized by combining
Revolution (after 2020s)
energy and non-fossil energy technology (complex coretechnology) → objects, conduction machine-operational
manufacturing machinery equipment with nonmachine
manufacturing services. The impact of such
Sources: “History of Industrial Revolutions – Changes of International Order as seen in innovation” (Guo Sizhi,
industrial revolutions depends upon how closely
Chikuma, 2021)
they are combined and the quality of the combined
elements (Table 2). In other words, if the quality of
those objects like machines and facility equipment is low, the impactof the driving force and key technology would be limited.
It is expected that the decarbonization revolution will play aleading role in the next-generation industrial revolution as a driving
force and detonator, a common technological characteristic among
the industrial revolutions so far.
Japan SPOTLIGHT • July / August 2024

51

Developed Decarbonized Technology in East
Asia & Their Characteristics
1. Main Examples of Developed Decarbonized Technologies inJapan, China, South Korea & Taiwan
In recent years, with decarbonization in progress, East Asia has
been actively working on technological development and the social
implementation of decarbonization in aquariums, power
semiconductors, all solid state batteries, and Carbon dioxide
Capture, Utilization and Storage (CCUS). Above all, the development
and introduction of hydrogen has been drawing attention all over theworld. Here are some specific examples of hydrogen development
and application.
In Japan, an “Association for the Promotion of a Hydrogen Value
Chain” was established in December 2020, aiming at building an
alliance among organizations working on hydrogen. Some 250
companies had joined by August 2021. Mitsubishi Heavy Industries
Ltd., in its pursuit of early commercialization of a hydrogen gas
turbine with hydrogen as fuel, founded the “Takasago Hydrogen
Park” where it can test all technologies ranging from hydrogenproduction to power generation. It plans to commercialize products
produced in a large gas turbine through mixed combustion with 30%of the used fuel being hydrogen, and in small and medium-sized gas
turbines which use 100% hydrogen fuel. The park was built next to a
combined cycle power station for demonstration and Mitsubishi has
started trials and demonstrations of technologies for hydrogenproduction and storage, and also burning hydrogen in a gas turbine.
Meanwhile, a new big electric power company, eREX Co., Ltd. hascollaborated with Hydrogen Technology (HT) and started continuous
operation of a hydrogen power station with around 320 kilowatts
constructed in the city of Fujiyoshida in Yamanashi Prefecture in
April 2022. They have started power generation of 270 Nm3 (normal
cubic meter) of hydrogen per hour provided by HT. Incidentally, in a
New Energy and Industrial Technology Development Organization(NEDO) project, Obayashi Corp. and Kawasaki Heavy Industries, Ltd.
succeeded, for the first time in the world, in providing heat andpower by gas turbine generation with 100% hydrogen fuel in the cityin their demonstration on April 19 and 20 in 2018.
In China, Ningxia Baofeng Energy Group Co., Ltd. in Ningxia has
started water electrolysis hydrogen production using solar power. In
the first stage of the project, in April 2020, they started constructionof a 100 megawatt power generation plant and electrolyzed water
device with a 10,000 Nm3/hour hydrogen supply capacity, and thosefacilities started to work in April 2021. At the end of February 2022,
this company started to operate 30 facilities for water electrolysis forthe production of green hydrogen. It imported those facilities.
Currently, its produced hydrogen, around 33 million tons per year, isthe largest in volume in the world, but mostly originally coming from52 Japan SPOTLIGHT • July / August 2024

fossil fuel and industrial by-products, which is called grey hydrogen.
In South Korea, a “Korea H2 Business Summit” was held in
September 2020. Twelve large enterprises like Hyundai, SK, Hanwha,
GS, PSCO, and Lotte Chemical participated. All the participatingcompanies plan to invest 43 trillion, 40 billion won by 2030 and start
to build up and secure a hydrogen supply chain covering hydrogenproduction, storage, and Fuel Cell Vehicles. In May 2022, Lotte
Chemical HQ, the largest ammonia distributor in South Korea, andSumitomo Corporation initiated a test project for hydrogenproduction through ammonia decomposition for the first time in theworld by using Syzygy’s photocatalytic reactor.
In Taiwan, in February 2020, a “New Generation Energy ResearchTeam” consisting of Taiwan University, the University of Science andTechnology in Taiwan and Tokai University, with planned support
from the Science and Technology Department of the Taiwanese
government, succeeded in developing new photo-electrochemistryhydrogen production technology combining ultra-thin atomic layermaterial, graphene and silicon material and thus contributed to thecreation of clean hydrogen energy from solar energy, and that
resulted in raising the efficiency of conversion by 20%. The high costof hydrogen production still remains a serious challenge.
National Sun Yat-sen University in Taiwan and Kaaz Corporation in
Okayama Prefecture in Japan which specializes in agricultural
machinery concluded a joint research agreement on hydrogenenergy in 2022. They are working on development of an engine usinghydrogen as fuel based on a small gasoline engine developed by
Kaaz, aiming at its completion in 2027.

2. Characteristics of Decarbonization in Japan, South Korea,
Taiwan & China
Each of the four nations has its own characteristics regarding
social institution and stage of economic and industrial development.
In Japan, decarbonization technology such as hydrogen, electricity
storage technology, power semiconductors and CCUS is the best in
the world in terms of stock base. So its decarbonization technology
knowhow and its accumulation gives it some advantages.
South Korea’s hydrogen, solid state battery and power
semiconductor development is more advanced than in China andTaiwan and it is now getting seriously engaged in such developmentwith closer collaboration between the government and the businesssector.
In Taiwan, its uniqueness is in R&D in the national research
institutes and universities and also its collaborative engagement withJapan. However, it needs to promote further applications and reduce
production costs, as well as strengthen its international
competitiveness.
In energy decarbonization, Japan excels in technologies for coalfired power generation or hydrogen power generation, but it stillfaces high costs of renewable energy development and solar power
generation (the cost of solar panels and their facilitation is higher
than in Europe).
In China, the government and private sector together promotedecarbonization technology development mainly among national

enterprises. In areas like renewable energy development andtransformation of electric power or EV, they have achieved
remarkable progress with the largest market share in the world (windpower generation capacity: 329 gigawatts and 39.9% of the world
total; solar power generation capacity: 306.4 gW, 36.3% of the world
total). However, their decarbonization inindustries or technological development
TABLE 3and application have not yet reached theComparison of decarbonization in Japan, China,
South Korea & Taiwan
level of Japan, South Korea and Taiwan.
Energy and resource-intensive industries
Japan
China
South Korea
Taiwanlike steel and chemicals are the leading
Primary energy
76.1
237.7
168.6
181.8
consumption per GDP
industries in their manufacturing, but their(Toe/ US$ million)
carbon productivity is lower than in Japan,
CO emission per GDP
South Korea and Taiwan (Table 3). They
225.9
689.0
336.7
427.4
(CO t/ US$ million)
suffer from a lack of accumulated
knowledge of decarbonization
Carbon productivity (GDP/
58.6
11.7
25.2
21.9
GHG emission) (100technologies.
2

2

million / million CO2 ton)

Source: Compiled by the author on the basis of the Institute of Energy Economics, Japan & BP Statistical Review of World Energy
2023
TABLE 4External dependency on oil & energy in the East
Asia region
(%)
Oil’s external
dependency

Oil’s dependency
on the Middle
East

Natural gas’s
external
dependency

Coal’s external
dependency

Japan

99.9

92.5%

97.8

99.6

China

71.2

49

41.0

-4.3

South Korea

99.1

86

100.0

99.3

Taiwan

97.3

91.2

92.2

100.0

Sources: Compiled by the author on the basis of the Governmental Energy Statistics and BP Statistics
TABLE 5Comparison of choke points between East Asia &the West
Choke point ratio (%)

2000s

2015

2021

France

71.8

65.5

62.6

Germany

45.0

58.4

56.8

UK

12.7

8.5

7.9

US

48.3

42.5

22.2

China

142.5

149.6

152.0

Japan

177.8

167.7

183.2

Soth Korea

163.6

175.8

183.2

Taiwan

175.0

180.8

185.0

Note 1: Percentage of sums of oil imports by quantity passing through choke points to total imports is calculated as chokepoints ratio. In the case of the nations passing through choke points more than twice, the numbers are counted eachtime, thus this ratio could exceed 100%.
Note 2: As this ratio is lower, there must be more oil imports without passing these choke points, which means the country
faces a lower risk.

Sources: METI “Energy White Paper 2023”, Taiwan’s choke point ratio is estimated on the basis of this White Paper.

3. Feasibility & Need for Regional
Alliance
As shown in Table 3, in East Asia eachnation’s primary energy sources’ relation
to GDP, CO2 emissions per GDP, andcarbon productivity differ from each other.
Above all, it is notable that China’s
performance is much worse than any
others. I think that from now on these four
nations should try to reduce theirgreenhouse gases (GHG) through thedivision of labor, or through mutual
complementarity to achieve decarbonizedindustrialization, while taking advantage ofeach nation’s strength in technology,
knowhow, human resources, markets, andfinancial capacity.
On the other hand, it should also be
noted that East Asia is vulnerable inenergy supply. As shown in Table 4,
external dependency for oil and energy inJapan, South Korea and Taiwan is very
high, more than 90%, and even in China,
external dependency on oil and natural gas
has been rising recently, having
respectively reached 71% and nearly 50%.
Thus, in comparison to Europe and theUnited States, energy dependency of thesefour nations on the Middle East comeswith a high geopolitical risk (Table 5 &Japan SPOTLIGHT • July / August 2024

53

CHART 3

Choke points in the world
Straits of Denmark

Straits of Turkey
Straits of Hormuz

Suez Canal

Straits of Bab-el-Mandeb

Panama Canal
Straits of Malacca

Cape of Good Hope

Sources: METI “Energy White Paper 2023”, Taiwan’s chokepoint ratio is estimated on the basis of this White Paper.

Chart 3).
In addition, it should be noted that the East Asia region is muchoriented towards coal-fired power generation (Chart 4). The
percentage of coal-fired power generation among the four nations ismuch higher than the 20.4% among the OECD nations. Above all, thepercentage in China alone is 63.3%. Thus, it is urgent for these four
to expand decarbonization, renewables and new energy sources, andreduce their external dependency on fossil fuels like oil and coal.
Through cooperation or alliances, they could reduce their GHG
emissions and achieve energy security, environmental protection andeconomic growth in the period of transition to decarbonization. It ishugely important that they restrict coal consumption, which ismainly responsible for the GHG emissions in the region, and jointly
expand the use of renewable power generation as a whole region.

Conclusion: Challenges & Prospects for the
FutureAt this moment, Japan, China, South Korea and Taiwan need to
54 Japan SPOTLIGHT • July / August 2024

cope with the expanding climate change crisis and geopolitical risks
by reducing their CO2 emissions and their dependency on fossil fuelenergy through decarbonization.

1. Challenges in East Asia
It will be important to resolve the challenges in the area of
decarbonization facing the four nations. Those challenges are as
follows:
First, they need to promote further application of patents for
decarbonization technology in the region and thus lower the cost oftechnological development.
Second, they must secure human resources related todecarbonization and promote the application of decarbonization
technology overseas and strengthen its international competitive
advantage.
Third, they need to enhance the added value of industries andupgrade technologies, as well as strengthen decarbonization
technology development and implementation in traditional energyintensive industries, as in China with intra-regional collaboration.

CHART 4

Proportion of power generated by electricity among the different nations
Coal
Japan

Oil

Natural gas

31.0

34.3

Taiwan

6.8

0.1

1.3

20.4

20%

30%

40%

8.0

17.0

2.5

18.4

50%

10.9

15.2

39.0

30.2

46.3

10%

4.8

Others

26.0

2.0

1.7

3.1

7.6

31.3

42.0

Non-OECD
0%

34.6

63.3

South Korea

Solar power・wind power

Water power

3.7

China

OECD

Nuclear power

60%

13.0

5.5

11.5

2.0

0.5

5.2 1.4

3.0

5.0 1.0

13.5

5.2

16.5

70%

80%

4.2

8.5

90%

2.8

100%

Sources: Compiled by the author on the basis of the IEA world energy outlook 2023, Taiwan Energy Statistics
TABLE 6

Proportion of exports & imports
among the 4 nations to total exports& imports (%) 2022
Proportion of mutual
Proportion of mutualexports among the four imports among the four
nations to total
nations to total
Japan

38.1

74.4

China

19.9

23.2

South Korea

35.1

32.8

Taiwan50.4

40.7

Source: Compiled by the author on the basis of the JETRO “White Paper on the World Tradeand Investment” 2023

Finally, by improving the quality of technology development rather
than the quantity by creating a good R&D environment among
private companies, they should develop new technologies to address
the shortcomings of decarbonization technology. They should learn
from each other’s advantages and strengths and jointly cope withrisks and issues.

2. Prospects
In the East Asia region, exports and imports among these four
nations, and their mutual dependency through trade, are high (Table
6). Against this background, intra-industry divisions of labor or intrafirm divisions of labor achieved by multinationals are promoted in

the domains of renewable and new energy, EVs, batteries, hydrogenelectrolyzers, power semiconductors, and decarbonization
technologies like CCUS.
Expanded trade among decarbonized industries and the build-up
of supply chains could be achieved by taking advantage of each of
the four nations’ comparative strengths. They should consolidate
industrial divisions of labor or complementarity in decarbonizedindustries and their supply chains by utilizing East Asia’s existing
trade and industrial division pattern.
Under private sector initiatives, they should strengthen alliancesamong East Asia’s decarbonization and green industries, and in thenear future should try to create an East Asia Decarbonization
Community, including ASEAN countries.
Article translated from the original Japanese by Naoyuki Haraoka.


Dr. Guo Sizhi is Specially Appointed Professor at Teikyo University Okinaga
Research Institute; Consulting Fellow at the Japan Economic Foundation(JFE).
He specializes in the international economy, the energy economy, and theChinese economy. His current research focuses on the transformation of theinternational political and economic order, new energy, and economic security
toward carbon neutrality, and decarbonization technology innovation. He is theauthor of numerous books, including A History of the Industrial Revolution: The
Transition of the International Order as Seen Through Innovation and The
Decarbonizing Industrial Revolution.

Japan SPOTLIGHT • July / August 2024

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