Technology Strategy Center ReportComprehensive R&D Principle
for Sustainable Society 2020

February 2020

3 Essential Social Systems for Sustainable Society
Prepared by Technology Strategy Center, NEDO (2020)

New Energy and Industrial Technology Development Organization
Technology Strategy Center (TSC)Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

Executive Summary
Chapter

1 Toward Realizing Sustainable Society● Vision of Future
NEDO aims to build a future in which the international society is economically rich, environmentally friendly,
coexists with nature, maintains and develops nature and ecosystem diversity, and creates a better society for future
generations while satisfying the social needs of the current generation. To achieve this vision, climate change is achallenge to be overcome and it is required to pursue the realization of a sustainably developing society.
● Movement for Realizing Decarbonized Society
The Paris Agreement in 2015 requires the parties to limit the global average temperature increase to well below 2℃ (the2℃ target ) as well as to pursue efforts to limit the temperature increase to 1.5℃ (the 1.5℃ non-binding target ), in orderto realize a decarbonized society in the second half of the 21st century.
Based on the Long-term Strategy under the Paris Agreement (approved by the Cabinet in June 2019 ), theEnvironment Innovation Strategy was established in January 2020 with an aim to establish innovative technologies toachieve global carbon neutrality as well as CO2 reduction on stock basis (beyond zero ) by 2050.
It is very important to address technical development for realizing a decarbonized society and the social
implementation toward resolving the issue of climate change.
● 3 Essential Social Systems for Sustainable Society
A key to realizing a sustainable society is the integrated and organized promotion of 3 Essential Social Systems:◆ Circular Economy,◆ Bioeconomy, and◆ Sustainable Energy.
It is important to get an integral perspective on these 3 Essential Social Systems to bring about discontinuous
innovation and to realize the social implementation with economic rationality.

3 Essential Social Systems for Sustainable Society● Objective of this Comprehensive Principle
For integrated and organized promotion of 3 Essential Social Systems and identification of innovative technologies
contributing to resolution of climate change issues, this Comprehensive Principle, with an eye toward 2050, has apurpose of helping assess innovative technologies to be developed and demonstrated by proposing to conduct generalobjective evaluation of technologies effective in CO2 reduction and by providing specific estimations along their
grounds for several of those innovative technologies. It should be noted that this Principle begins discussion withemission reduction of CO2 , which is the highest GHG emission contributor.

2Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

Chapter

2 GHG Emissions and Total Abatement Cost

The marginal abatement cost to achieve GHG emission reduction by about 40 GtCO2 would be more than
$1,000/tCO2 only with an extension of conventional technologies. This means that about $10 trillion would be annuallyneeded as the total abatement cost to achieve just a 40 GtCO2 reduction and, furthermore, an even higher abatement
cost would be needed to achieve carbon neutrality.
This huge annual total abatement cost cannot be lowered to a globally acceptable level only with an extension of
conventional technologies. It is indispensable to bring out discontinuous innovation.

Chapter

3 Evaluation of Innovative Technologies

With an eye toward 2050 , this Comprehensive Principle proposes to conduct general objective evaluation oftechnologies effective in CO2 reduction and provides CO 2 reduction potential and CO 2 reduction cost estimates along
their grounds, which are needed for the evaluation, for several of those innovative technologies.
These estimates may vary depending on technical factors such as technology development speed and discontinuous
innovation as well as social environment variations including government policies for introducing technologies andsocial acceptability. Therefore, it is indispensable to verify such estimates by gathering findings from those concerned.

Chapter

toward Creation of Framework
4 Expectation
for Facilitating Innovation

To realize a sustainable society, it is also indispensable to develop a scheme to encourage innovation in technicalfields for resolving the issue of climate change and accelerate the social implementation.
To this end, Japan should develop attractive research schemes and environments where industry and academia
can intensively put together their knowledge and wisdom under significant technical themes, promote international
cooperation for technical development, and offer support programs to implement innovative technologies. It is
important to have continual nationwide discussion on how the country can develop these institutional environments/
schemes and to improve them as appropriate.

Chapter

5 Conclusion

To realize a decarbonized society , discontinuous innovation is indispensable. For integrated and organizedpromotion of 3 Essential Social Systems to realize a sustainable society, it is important to have discussion for
determining innovative technologies to be developed and demonstrated based on quantitative evaluation of CO 2
reduction potential and other factors.
Efforts to be addressed in the future include the consideration of items that have not been subject to estimation inthis Principle and discussion on the possibility of improving CO2 reduction effects by merging/integrating different
technologies.
Working hand-in-hand with the Government and related institutes, NEDO, as one of the parties to the series ofefforts and also as an innovation accelerator , is committed to continuously trying to develop innovative technologies,
contributing to global GHG emission reduction.

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Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

Table of Contents
INTRODUCTION 

5CHAPTER 1 TOWARD REALIZING SUSTAINABLE SOCIETY 

6

1-1 Vision of Future 

6

1-2 Movement for Realizing Decarbonized Society 

61-3 Social System from Viewpoint of Carbon Cycle 7

1-4 3 Essential Social Systems for Sustainable Society 

91-5 Objective of This Comprehensive Principle 11

CHAPTER 2 GHG EMISSIONS AND TOTAL ABATEMENT COST 

12

2-1 Current Status of GHG Emissions 

122-2 Prospects for GHG Emissions 

13

2-3 Estimations of Marginal Abatement Cost and Total Abatement Cost 14

CHAPTER 3 EVALUATION OF INNOVATIVE TECHNOLOGIES 

16

3-1 Approach for Evaluating Innovative Technology 

16

3-2 Methods for Estimating CO2 Reduction Potential and CO2 Abatement Cost 17

3-3 Example of CO2 Reduction Potential Estimation 

19

3-4 Examples of CO2 Abatement Cost Estimation 

22

3-5 Promoting Strategical Development of Innovative Technology 

27

CHAPTER 4 EXPECTATION TOWARD CREATION OF
FRAMEWORK FOR FACILITATING INNOVATION 

28

CHAPTER 5 CONCLUSION 

29

APPENDIX 

30

4Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

Introduction
The world’s average ground-level atmospheric temperature has continuously increased since the commencement of
the Industrial Revolution in the second half of the 18th century and the increase from 1880 to 2012 is about 0.85℃ (Figure

Average temperature deviation(1986–2005)（℃）

1).

Annual average

se

crea

in
85˚C

0.

12）

‒20

80
（18

Multiple color-coded line graphs show different observation data sets.

（Year）
Figure 1 World’s average ground-level atmospheric temperature (land and sea) deviation (1850 to 2012)

Source: Prepared by Technology Strategy Center, NEDO, 2020, based on Climate Change 2014 Synthesis Report Figure SPM.1 (a)(IPCC, 2014)

According to the Intergovernmental Panel on Climate Change (IPCC), this temperature increase is very likely
attributable to human-induced emission of greenhouse gases (GHGs). It is pointed out that, if GHGs continue
increasing as they are, the temperature may increase by up to 4.8℃ by the end of the 21st century1 . Furthermore, thistemperature increase may induce aggravation and/or prolongation of heavy rain and heat waves that have brought
serious impacts throughout the world and would be even more serious at the end of the 21st century.
Climate change due to human-emitted GHGs is a challenge for the entire world. It is necessary for the internationalsociety to make a concerted effort to substantially reduce the global GHG emissions and try to achieve carbon
neutrality. Today, the concept of global sustainability, not limited to climate change, has gradually become popular ininternational society as is seen in, for example, the unanimous adoption of Sustainable Development Goals (SDGs) andestablishment of common goals toward 2030 for the international society in the United Nation’s Summit in 2015.
Japan is now required to properly identify the global trend toward these environmental issues and promote
implementing discontinuous innovation that can help resolve global environmental issues while bringing them into
agreement with SDG elements other than the issue of climate change, thereby actively contributing to GHG reduction
both at home and abroad.

1

Climate Change 2014 Synthesis Report (IPCC,2014)5

Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

Chapter●

1 Toward Realizing Sustainable SocietyA ddressing technical development to build a decarbonized society and realizing the social

implementation by 2050 including the establishment of an innovative technology to achieve beyond
zero are very important for resolving the issue of climate change. Discussion here begins with emission
reduction of CO2 , which is the highest GHG emission contributor.
● To realize a sustainable society, it is indispensable to ensure integrated and organized promotion of 3
Essential Social Systems: Circular Economy, Bioeconomy and Sustainable Energy.

1 -1 Vision of Future
The human future is infinite.
・To keep the international society economically rich, environmentally friendly and coexisting with nature after ahundred years, two hundred years and even thereafter;
・To ensure that nature and ecosystem diversity are maintained and continuously developed in the future;・T o meet the social needs of the current generation and not impede on the social needs of future generations,rather, to pass on a better society to future generations;
Climate change is a challenge that humans have to overcome. Even if considerable difficulty exists, humans need toaim at building a society where they can overcome the issue of climate change, ensure harmonization among theenvironment, economy and society, continue creating new values, and keep evolving in a sustainable way, namely, asustainable society .

1 -2 Movement for Realizing Decarbonized Society
In the 21st Session of the Conference of the Parties to the United Nations (UN) Framework Convention on Climate
Change (COP21) held in Paris in 2015, the Paris Agreement was adopted on the basis of the scientific findings aboutclimate change presented by the Intergovernmental Panel on Climate Change (IPCC). The Paris Agreement requires
the participating countries to limit the global average temperature rise to well below 2℃ compared to pre-industrial
levels (the 2 ℃ target ) as well as to pursue efforts to limit the temperature increase to 1.5℃ (the 1.5 ℃ non-binding

target ). To this end, the Paris Agreement calls for the parties to aim at achieving an equilibrium between emissions
from human-induced GHG sources and GHG removal (i.e., global carbon neutrality) in the second half of the 21st
century.
In Japan, the Council for Science, Technology and Innovation (CSTI) established the National Energy &Environment Strategy for Technological Innovation toward 2050 (NESTI 2050) in 2016 accompanied by a list oftechnologies for which research and development should be promoted even more intensively along with theirchallenges, in order to achieve drastic global GHG emission reduction by around 2050 from a long-term point of view.
According to this NESTI 2050, the 2 ℃ target cannot be achieved unless the global GHG emissions are reduced toabout 24 GtCO2 by 2050.

6

Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

In 2018, IPCC published a Special Report describing what effects and risks would be expected in case of global
warming of 1.5℃. The report forecasts that health, living, food and security risks associated with climate change
would be aggravated in the global warming scenario of 1.5℃ and more seriously aggravated in the scenario of 2.0℃.
It also predicts that human-induced CO2 emissions need to be zero net around 2050 if they are released through the
GHG emission routes that were exemplified to limit the temperature increase to 1.5℃.
With the increasingly severer prospects for future climate change risks, the Cabinet of Japan approved the Longterm Strategy under the Paris Agreement. Proclaiming a decarbonized society as the ultimate goal, the Long-term
Strategy aims at ambitiously realizing a decarbonized society as early as possible during the second half of thiscentury by setting a long-term target of 80% GHG emission reduction by 2050. Based on the Long-term Strategy, the“Environment Innovation Strategy”was established in January 2020 in order to implement discontinuous innovationin the energy and environment sectors, to determine the socially implementable cost, and to diffuse it throughout
the world. With an aim of establishing an innovative technology to achieve global carbon neutrality and global CO2
reduction on stock basis (beyond zero ) by 2050, the Strategy set out to realize the social implementation toward thegoals set in the Strategy itself.
In addition, the concept of global sustainability, not limited to the issue of climate change, has become popular
in international society. The 2015 United Nation’s Summit unanimously adopted Sustainable Development Goals(SDGs) and established common goals toward 2030 for international society. Under such situation, it is required topromote climate change measures in agreement with other SDG elements. In addition, many countries are more
active in addressing environmental issues including climate change. For example, European countries including theU.K., France and Germany announced a policy of banning the sale of internal combustion engine cars. Investment incompanies with considerations given to environmental, social and cooperate governance issues (ESG investment ) is
expanding. In addition, recent global trends including development of a sharing economy, problems caused by highvolume introduction of renewable energy, and marine pollution with plastic debris are also a significant point.
With these circumstances taken into account, addressing technical development to realize a decarbonized society
and the social implementation is very important in the process toward resolving the issue of climate change. NEDO
understands that it is its own duty to accelerate innovation in this field to realize a sustainable society.

1 -3 Social System from Viewpoint of Carbon Cycle
In terms of CO2 , which makes up the majority of GHG emissions, it is important to aim to realize a society where thewhole social system is sustainable from the viewpoint of carbon cycle. The concept of carbon cycle embraces emission
reduction, storage/immobilization, and recycling.

7

Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

CO2

Direct CO2 capture（DAC）

Released
to the atmosphere

Biomass

CO2
Circular
EconomyImmobilized

CCS・EOR
storage

Bioeconomy

Sustainable energy

Fossil fuelImmobilized

Renewable energy
and hydrogen

CCU

EnergyDemand saving

Figure 2 Conceptual Image of Social System from Viewpoint of Carbon Cycle
Source: Prepared by Technology Strategy Center, NEDO, 2019

Then, the conceptual image of a social system from the viewpoint of carbon cycle shown in Figure 2 was created.
Based on the image, a roadmap to build a sustainable society was discussed. The figure indicates that CO2 emissions
from the energy demand sector shown in blue can be reduced by improving energy saving. CO2 emission reduction
can also take place when the fossil fuel usage is reduced by the use of renewable energy and hydrogen as well as
the utilization of biomass energy. Thus, it is essential to implement a sustainable energy-based social system thatcan maximize the use of sustainable energy including the promotion of energy saving, in order to achieve lower CO2
emissions.
Secondly, it is important to capture CO2 released during energy consumption as much as possible and then to
store it underground through CCS2 and EOR3 as well as reuse it for chemicals through CCU4 . Moreover, CO2 can beseparated and stored through Direct Air Capture, mineralization or other technology. These technologies can beused to substantially reduce CO2 emissions in the atmosphere and to reduce the energy/material demand throughrecycling or sharing. Thus, it is essential to implement a circular economy-based social system that can maximize
recycling of material resources, in order to reduce CO2 emissions.
Furthermore, atmospheric CO2 can be immobilized in plants through photosynthesis. Using carbon-neutral biomass
as energy or for material production will also allow for CO2 emission reduction. Thus, it is essential to implement a
bioeconomy-based social system that can make the most of biomass and reduce atmospheric CO2 , in order to reduce
CO2 emissions.
The discussion above has now provided an overview of social systems from the viewpoint of carbon cycle. Insummary, for lower CO2 emissions, it is essential to implement 3 Essential Social Systems: Sustainable Energy,
Circular Economy, and Bioeconomy.

2

Carbon dioxide Capture and Storage

4

Carbon dioxide Capture and Utilization

3

Enhanced Oil Recovery

8Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

1 -4 3 Essential Social Systems for Sustainable Society
As mentioned in the previous section, on the basis of the movement for realizing a decarbonized society , it isindispensable to continuously develop 3 Essential Social Systems: (1) Circular Economy, (2) Bioeconomy, and (3)Sustainable Energy. It is important to get an integral perspective on 3 Essential Social Systems, to bring about
discontinuous innovation, and to realize the social implementation with economic rationality. Figure 3 represents how
the 3 Essential Social Systems, which are indispensable to realizing a sustainable society, can continue developing,
relate with each other, affect each other, and are optimally harmonized. The following explains these 3 Essential Social
Systems.

Figure 3 3 Essential Social Systems for Sustainable Society
Source: Prepared by Technology Strategy Center, NEDO, 20209

Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

(1) Circular Economy (Blue)
Humans use various material resources existing on the Earth to carry out socioeconomic activities. Circular
Economy refers to a social system in which recycling of material resources is maximized and consumption thereofis minimized. Even embracing the concept of a sharing economy, a Circular Economy has a goal of maximizing
utilization of material resources produced from the Earth. The figure expresses Circular Economy in blue thatsymbolically represents the Earth.
Typical measures of Circular Economy include Reduce, Reuse and Recycle (3Rs). It was originally intended to mainly
pursue resource saving, resource security and waste reduction, but recent attention has been paid to the 3Rs and thesharing economy as potential reduction measures in the manufacturing sector where radical CO2 emission reduction
is more difficult than in the power sector. For example, material recycling can lead to CO2 reduction by around 80%
for plastic and around 90% for aluminum, according to an estimate5 . With their effect of reducing material/productproduction, the 3Rs are expected to be effective CO2 emission reduction measures in the steel, cement, chemical andnon-ferrous metal manufacturing sectors involving high-volume CO2 emissions. Another potential CO2 reduction
measure is carbon recycling that recovers CO2 and reuses it as various carbon compounds based on an idea that CO2
is a carbon resource. Besides these, some other CO2 reduction measures based on new business models on the demandside, including the sharing economy, are being studied for their effects. In this way, CO2 reduction by, for example,
optimizing transportation systems during the phase of material/product consumption, in addition to during the phaseof production thereof, is also expected to be a potential measure6 .
(2) Bioeconomy (Green)
Besides the human race, other various forms of life live on the earth. These organisms coexist with each other as
they produce materials useful to others in their life-support activities. Bioeconomy is a social system in which the useof materials produced by these organisms are maximized and the load on the ecosystem is minimized. The objectiveof Bioeconomy is to maximize the ecosystem performance and the contribution of biological resources. The figure
expresses Bioeconomy in green that symbolically represents organisms.
In 2009, the Organization for Economic Co-operation and Development (OECD) published a report titled“TheBioeconomy to 2030”, projecting that the biotechnology industry would expand to account for 2.7% of the grossdomestic product (GDP) (about $2.0 trillion scale) in 2030 (less than 1% in the 2000s). Since then, many countries
have drafted their own Bioeconomy strategy. In Japan, Biotechnology Strategy 2019 was approved in the Integrated
Innovation Strategy Promotion Council in June 2019. The Strategy considers Bioeconomy as an indispensable elementof the new sustainable socioeconomic system and describes how such Bioeconomy can be implemented.
Bioeconomy can help reduce CO2 emissions by replacing petroleum-derived materials/products with organic ones
and by using biomass into which atmospheric CO2 has been immobilized by photosynthesis (considered as carbon
neutral). Biotechnology has the potential for producing innovative approaches including discontinuous innovation. It
could also capture and store CO2 that has been released in the biomass utilization process, contributing to negativeemissions7 .

5
6

The Circular Economy–A Powerful Force for Climate Mitigation (SITRA, 2018)
ITF Transport Outlook 2017 (OECD,2017)7	Negative emission technologies refer to capture and immobilize or store CO2 released to and accumulated in the atmosphere. Specifically, they include Bio-Energy with
Carbon dioxide Capture and Storage (BECCS) that promotes plantation to immobilize CO2 in plants or capture and store CO2 released during biomass power generation

and Direct Air Capture (DAC) that directly recovers CO2 from the atmosphere and then immobilize or store it.

10Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

(3) Sustainable Energy (Orange)
Besides fossil fuel, there exist on the Earth many other natural energy sources based on the solar radiation to the
Earth or the Earth’s internal heat, such as sunlight, wind, geothermal heat and oceans. The sustainable energy-basedsocial system means that the use of these natural energy sources is maximized and the load on the global environmentis minimized. The purpose of such society is to implement long-term stable energy supply and consumption. The
figure expresses it in orange that symbolically represents energy.
Since the Industrial Revolution, most of the rapidly increasing energy demand has been met by fossil fuels
including coal, petroleum and natural gas. These are depleting resources that produce a large amount of GHGs
when they are exploited or burnt. Therefore, the conventional energy supply system using fossil fuels needs to beconverted to a sustainable energy system in order to realize a sustainable society. Specifically, it is important topromote development of renewable energy utilization technologies in terms of primary energies, secondary energy
technologies to convert, transport and store the primary energies, energy management technologies to integrate
the secondary energy technologies for optimal energy utilization, and energy saving technologies to use energy as
efficiently as possible, thereby achieving cost reduction and preparing the way for the social implementation as earlyas possible.

1 -5 Objective of This Comprehensive Principle
This Comprehensive Principle was established based on the idea that it is very important to ensure integrated
and organized promotion of 3 Essential Social Systems (Circular Economy, Bioeconomy and Sustainable Energy) andto address technical development for globally achieving carbon neutrality and realizing the social implementation,
toward the resolution of the issue of climate change.
To identify innovative technologies that can contribute to resolution of the issue of climate change, it is needed
to get a bird’s eye view of technologies related to Circular Economy, Bioeconomy or Sustainable Energy and toquantitatively assess which technologies can achieve how much CO2 reduction at what cost and at which timing. It
is particularly important to have quantitative discussion with an eye toward the future based on estimations of CO 2

reduction potential and CO 2 abatement cost of technologies that can contribute to CO2 reduction.
Then, with an eye toward 2050 , this Principle has a purpose of helping assess innovative technologies to be
developed and demonstrated by proposing general objective evaluation of technologies effective in CO2 reduction
and by providing specific estimates along their grounds for several of those innovative technologies. It should be
noted that this Comprehensive Principle begins discussion with emission reduction of CO2 which is the highest GHG
emission contributor.
As stated in the“Environment Innovation Strategy”, many technologies other than those discussed in this Principle
need to be discussed in order to establish innovative technologies that can realize global carbon neutrality as well as
global CO2 reduction on stock basis (beyond zero ) by 2050. These technologies helping resolve the issue of climatechange should be subjected to quantitative evaluation including CO 2 reduction potential assessment according to thisPrinciple so that they can be further narrowed down. The resulting Japanese original innovative technologies are
expected to be widely spread and used throughout the world, contributing to resolution of the issue of climate change.
NEDO has brought about innovation through a variety of technical developments and demonstration projects sofar. By presenting and newly issuing what should be a guideline for use in discussing domestic efforts for innovation
toward the resolution of the Earth’s environment issues, NEDO will strengthen its own role as an innovation
accelerator to further help resolve global challenges.

11Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

Chapter●

2 GHG Emissions and Total Abatement Cost

In discussing the relationship between GHG reduction measures and their cost efficiency, assume thatabout 40 GtCO2 must be reduced annually. In this case, it costs more than $1 thousand to reduce 1 tonof CO2 .

●This means that about $10 trillion would be needed annually as the total abatement cost to reduce 40
GtCO2 .

●

T o lower this huge total abatement cost to a globally acceptable level, discontinuous innovation isindispensable.

2 -1 Current Status of GHG Emissions
The global greenhouse gas (GHG) emissions in 2010 were about 49 GtCO2 . Of these, 76% is attributable to CO2 ,followed by CH4 (16%), N2 O (6%) and fluorine gases including CFC8 (2%) (Figure 4). Figure 5 shows Japan’s GHG
emissions in FY2013, although the year is different from that of the global data9 .

N2O,
O,6%
6%
N
2

Others, 2%
2%
Others,

N2O,
O,2%
2%
N
2
CH4,,3%
3%
CH

OthersOthers

4

CH4,,
CH
4
16%
16%

1.408
1.408
GtCO2
GtCO
2
(2013)(2013)

49GtCO
GtCO2
49
2(2010)(2010)

CO2,,
CO
2
76%
76%

Figure 4 Global GHG emissions

CO2,,
CO
2
93%
93%

Figure 5 Japan’s GHG emissions10

Source: Prepared by Technology Strategy Center, NEDO,
2020, based on Climate Change 2014 Synthesis Report (IPCC,
2014)

Source: Prepared by Technology Strategy Center, NEDO,
2020, based on the Ministry of Environment’s Annual Reporton the Environment, the Sound Material-Cycle Society andBiodiversity in Japan 20158	Many fluorine-containing gases including alternative CFCs are included in the controlled substance list of the Montreal Protocol on Substances that Deplete the Ozone
Layer. Promoting the development of refrigerants with low Global Warming Potential (GWP) will contribute to GHG reduction.

9	The reference year for setting 2030 targets was set to 2010 by IPCC or 2013 by Japan. The global GHG emissions have increased by 6% in 2013 and by 7% in 2016 from the2010 level. (CLIMATEWATCH, https://www.climatewatchdata.org/)

10	Japan’s GHG emissions have decreased. The total GHG emissions in FY2017 were 1.292 GtCO2 . (Ministry of the Environment, Annual Report on the Environment, the Sound
Material-Cycle Society and Biodiversity in Japan 2019)12

Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

CO2 accounts for 93% (about 1.3 GtCO2 ) of the total GHG emissions, which is higher than the global average. Japan’s
GHG emissions only account for a relatively small fraction of the global emissions, but it is very important for thecountry to contribute to lower GHG emissions not only domestically but also globally as climate change issues are a
global scale concern11 . This Comprehensive Principle mainly discusses reduction of CO2 emissions, which account for
about 80% of the total GHG emissions, although reduction of other GHGs than CO2 is also a future significant challenge.

2 -2 Prospects for GHG Emissions
Since there is climate sensitivity uncertainty about the relationship between future GHG emissions and theearth’s average temperature, it should be noted that the prospects for GHG emissions vary greatly. International
research institutes have assumed various scenarios based on several GHG emission routes and have analyzed energy
consumption, CO2 emissions, abatement cost and other factors for each scenario.
This Comprehensive Principle mainly analyzes ETP 201712 scenarios presented by the International Energy
Agency (IEA). ETP 2017 provides three scenarios limited to CO2 : Reference Technology Scenario (RTS), 2℃ Scenario(2DS) and Beyond 2℃ Scenario (B2DS). Among these, RTS is to promote CO2 reduction by improving and proliferating
renewable energy and energy saving technologies. This scenario assumes that the global CO2 emissions will be about
40 GtCO2 in 2050, which is based on an estimation that about 15 GtCO2 reduction in 2050 will be achieved throughproliferation of conventional technologies from the level achieved with the 6℃ Scenario (6DS) in which no special
measures are taken13 . For 2DS and B2DS, further CO2 emission reduction will take place with economic rationality
because of technical development. These scenarios are shown in Figure 6.

60.0

6℃ scenario(6DS)

50.0
Referencetechnology
scenario(RTS)

40.0
30.0

2℃ scenario(2DS)

20.0
Beyond 2℃scenario(B2DS)

10.0
0.0
2010

2020

2030

2040

2050

Figure 6 Typical IEA Scenarios

2060

Source: Prepared by Technology Strategy Center, NEDO, 2020, based on Energy Technology Perspectives 2016 andEnergy Technology Perspectives 2017

11 This means that when a country emits or reduces CO2 , it will affect the whole world.
12 Energy Technology Perspectives 201713 Business As Usual (BAU) scenario included in Energy Technology Perspectives 201613

Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

2 -3 Estimations of Marginal Abatement Cost and Total Abatement Cost
International research institutes working on climate change issues have simulated several scenarios to present the

Marginal abatement cost, $/tCO2

relationship between CO2 emissions (or GHG emissions) and marginal abatement cost. The term marginal abatement
cost refers to the cost incurred to reduce an additional 1 ton of CO2 emissions expressed in the unit of $/tCO2 . Thismarginal abatement cost represents how high the hurdle for CO2 reduction from a given emission level is from theviewpoint of economic rationality. It is an important index for setting a target of technical development for future CO2
reduction (for more information, see Chapter 3).
To get a bird’s eye view of global average marginal abatement cost, this section covers estimations of global GHG
emissions and marginal abatement cost published by some international research institutes, i.e., the United Nations
Intergovernmental Panel on Climate Change (IPCC), International Energy Agency (IEA) and Japan’s ResearchInstitute of Innovative Technology for the Earth (RITE). Based on the estimations, regression analysis has been
made and the results are shown in Figure 714 . As indicated by approximate values on and around the blue line, as the
GHG emissions decrease, the marginal abatement cost exponentially increases and exceeds $1 thousand/tCO2 before
achieving 40 GtCO2 reduction.

10000

1000

100

〇 IEA
△ RITE

10◇ IPCC

1
50

40

30

20

10

0

GHG emission, GtCO2-eq/year
Figure 7 Relationship between GHG Emissions and Marginal Abatement Cost

Source: Prepared by Technology Strategy Center, NEDO, 2020, based on Global warming of 1.5˚C (IPCC, 2018),World
Energy Outlook 2018 (IEA, 2018), and Analyses on Japan’s GHG Emission Reduction Target for 2050 in light of the 2˚CTarget Stipulated in the Paris Agreement (RITE, 2017).

14	Any cost data by the research institutes that is based on different reference years has been corrected with the relevant inflation rate. The IEA data, which is limited to CO2 ,has been added with estimated valued for other GHGs than CO2 based on the IPCC data on GHG emissions released from multiple emission routes.
The relationship between marginal abatement cost and GHG emissions can be approximately expressed by the equation:
Marginal abatement cost [$/tCO2 ] = exp (-0.008363G + 7.748); G: GHG emissions [0.1 GtCO2 ]14

Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

The cost borne by the whole world for abatement measures (hereinafter, referred to as the total abatement costand expressed in the unit of $/year) can be determined as the area under the line indicating the marginal abatementcost. Figure 8 shows the relationship between the total abatement cost and GHG emissions. According to the figure,the global total abatement cost to reduce emissions to 40 GtCO2 is about $10 trillion/year. The total abatement cost toachieve 0 (zero) emissions, which can be determined through extrapolation, is estimated to be $27 trillion/year.
A $10 trillion/year scale of total abatement cost is equivalent to 12 % of the world’s GDP15 . This means thatthe total abatement cost being discussed is too high for society to accept, implying an extremely high hurdle forthe implementation. Therefore, discontinuous innovation to lower this huge cost to a globally acceptable level is
indispensable.

Total abatement cost, billion$/year

100000

10000

1000

100

10

50

40

30
20
GHG emission, GtCO2-eq/year

Figure 8 Relationship between GHG Emissions and Total Abatement Cost

10

Source: Prepared by Technology Strategy Center, NEDO, 2020, based on the analysis results in Figure 7

15 The global GDP (2018) was $84,825.6 billion. (Source: IMF, World Economic Outlook Database)

15

0Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

Chapter

3 Evaluation of Innovative Technologies● CO 2 reduction potential and CO 2 abatement cost are two important evaluation factors for the objective
assessment of technologies across various fields.
● N EDO has estimated the CO2 reduction potential and CO2 abatement cost of each innovativetechnology which NEDO can measure their impacts.
● I t is important to continuously validate these estimations by applying various stakeholders’insights since these figures may go up or down depending on changes to the environment, such as
implementation policies or social acceptance, as well as technical factors.

3 -1 Approach for Evaluating Innovative Technology
In order to evaluate technologies by their contribution to reducing CO2 emissions, both CO 2 reduction potential andCircular

EnergyFast-growing/elite tree

Switch to biomass-based raw
material

Aircraft

VehiclesHydrogenPower electronics

Wind power generation

Geothermal power generation

PV generation(EOR and CCS)CO
CO2separation and capture2

Advanced recycling of plastics
and other resources

8
7
6
5
4
3
2
1
0

Highly efficient recycling of metaland other materials

CO2 abatement estimate, GtCO2/year

CO 2 abatement cost must be measured quantitatively.
In this Chapter, NEDO has estimated the CO2 reduction potential and CO2 abatement cost of each innovativetechnology, with a focus on the approaches that NEDO is familiar with their research and development efforts and forwhich it is equipped to measure their impacts. These estimates have helped further discussion over the“Environment
Innovation Strategy.”In this estimation, the CO2 reduction impact of each technological approach in the“Environment
Innovation Strategy”has been calculated based on the social implementation of innovative technologies, together
with the development of next-generation innovative technologies and their social implementation. Since NEDO’s goal
is to solve the social issues by driving technological development, it has also estimated the CO 2 reduction potential
portion of next-generation innovative technologies that need to be developed further. Figure 9 shows part of the CO2
reduction estimates
for the technological approaches that are discussed in this Principle.
これが正ですBiotechnology

Figure 9 CO2 reduction potentialspotential of technological approaches inthe “Environment Innovation Strategy” (excerpted)
Source: Prepared by Technology Strategy Center, NEDO, 2020, based on the “Environment
Innovation Strategy” (the Cabinet Office, 2020）16

Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

for Estimating CO Reduction Potential
3 -2 Methods
and CO Abatement Cost
2

2

The innovative technologies discussed in this Principle are at different levels of perfection and have different social
contexts. Based on these differences, the CO2 reduction potential of these target technologies has been estimated using
the following four methods.
A）Calculation based on estimated penetration of each technology
B）Calculation based on estimates by specialist institutionsC）Calculation based on targets and outlooks set out by the government and industriesD）Calculation based on the maximum penetration of technology or installation of equipment
CO2 reduction potential may go up or down depending on changes to the environment, such as implementation
policies or social acceptance, as well as technical factors such as speed of technological evolution and disruptive
innovations. In cases where these uncertainties can be predicted, NEDO used different scenarios for penetrationand other relevant elements for each technology and applied the following formula for estimating the CO2 reduction
potential in 2050.
CO2 reduction potential [tCO2 ]＝introduction amount [specific unit*]* (emission intensity of traditional technology−emission intensity of innovative technology) [tCO2 /specific unit*]*Specific unit: Wh, J, t, and so on
Appendix shows the estimated CO2 reduction potential of the innovative technologies discussed in this Principle,
together with the basis of the calculation.
The total figure for CO2 reduction potential derived in this Principle must be handled carefully since the target
technologies have different levels of perfection and may compete with each other in some areas. As alreadymentioned, these estimations are also limited to the technologies that NEDO could comprehend their research anddevelopment status and calculate their impact. Not all the technologies that can help reduce CO2 are covered in thisPrinciple.
Nevertheless, the CO2 reduction potential of each technology discussed here can be high at 0.1–10.0 Gt, indicatingthat CO2 emissions can be dramatically reduced by promoting technological development.

17Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

CO2 abatement cost is the price for reducing one ton of CO2 emissions, measured in the unit of ¥/tCO2 . In thisPrinciple, the CO2 abatement cost for socially implementing innovative CO2 reduction technologies developed in the
future has been estimated using the formula below.
CO2 abatement cost [¥/tCO2 ] =innovative technology’s unit price－traditional technology’s unit price [¥/specific unit*]
Traditional technology’s CO2 emission intensity－innovative technology’s CO2 emission intensity [tCO2 /specific unit*]*Specific unit: kWh, GJ, t product, and so on
Technological development can sufficiently lower the cost of innovative technologies, accelerate their social
implementation, resulting in a dramatic reduction of CO2 emissions.
The innovative technologies discussed in this Principle have varying degrees of perfections and different social
backgrounds, as well as differences in their CO2 reduction potential. Each CO2 abatement cost is estimated based on
the following patterns.
A）Based on past learning curves: next-generation photovoltaics
B）Based on the target and outlook set out by the government and industries: hydrogen power generation
C）Based on estimates by specialist institutions: CCS and plastics recyclingD）Other patterns: next-generation battery for EV

18

Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

3 -3 Example of CO Reduction Potential Estimation
2① Next-generation photovoltaics (PV)Innovative PV technologies’ CO2 reduction potential at 2050 is estimated at around 7.0 Gt. This figure is also quoted
in the“Environment Innovation Strategy.”
IEA ETP 2017 estimated that a deeper penetration of innovative technology will result in up to 3,345 TWh worth of
PV introduced by 2050. This introduction amount and the CO2 intensity in 2050 are the basis for estimating the CO2
reduction potential of 2.2 Gt.
Next, based on 2DS16 and other figures in IEA ETP 2017, the total power generation capacity of PV and other nextgeneration innovative technologies in 2050 are estimated at 8,000 TWh. The 4,655 TWh difference between these
8,000 TWh and 3,345 TWh figures are assumed to be the additional power supply coming from next-generation PV
technologies, leading to the 3.0 Gt estimate for their CO2 reduction potential.
Further advances in technology, next-generation PV modules that are, among their properties, super-light, superefficient, and have high-quality design can bring them to building walls and production plant roofs, places that havebeen thought impossible with traditional technologies. Advanced installation methods can also open ways to PV
modules placed on water or farmland. PV introduction amount can be expected to grow dramatically in the future
through these innovations in technology. Estimates for the introduction amount of next-generation PV by applicationin 2050 are 2.02 TW for floating, 1.68 TW for side wall, 3.01 TW for farmland, and 0.56 TW for vehicle-mounted
systems, with the total CO2 reduction of almost 4.8 Gt. Adding this to the 2.2 Gt already mentioned results in 7.0 Gt
reduction across all innovative technologies. By developing offshore facilities, solar road, electric aircraft, and othernew applications, as well as introducing policy measures such as setting rules for net-zero energy buildings (ZEB), theCO2 reduction potential may grow even larger.
② Hydrogen power generation
Hydrogen technology can theoretically reduce CO2 emissions dramatically because this material that does not emit
CO2 during its usage can replace fossil fuel. Since some hydrogen production methods generate CO2 , technologies
must be developed for capping total CO2 emissions from production to consumption.“Hydrogen scaling up”(Hydrogen
Council, 2017 ) says that 6 .0 GtCO2 reduction can be achieved in the future by extensively using hydrogen inutility, transportation, and other industries. This section will discuss hydrogen power generation as an example oftechnologies leveraging hydrogen.
According to IEA, the global supply of electricity generated by natural gas power stations in 2050 will be 10,586
TWh/year. By assuming that 5 .0 –15 % of this amount can be replaced by hydrogen power generation, the CO2
reduction potential can be 0.19–0.58 Gt. Note that this estimation is only for final consumption of hydrogen. The CO2
emissions for producing, transporting, storing, and supply hydrogen have not been calculated in this Principle.

16 IEA World Energy Outlook 201819

Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

③ Next-generation battery for EV
A next-generation battery can help reduce CO2 emissions dramatically by storing electricity with low CO2 emission
intensity and extending its usage. In the“Environment Innovation Strategy,”the reduction of CO2 emissions fromvehicles and aircraft are estimated at 6.0 Gt and 2.0 Gt respectively, after all measures, including electrification andswitching to low-carbon fuels, are applied. The next-generation battery has higher energy density per weight aswell. Electric vehicles (EV) carrying a 100 kilogram pack of next-generation batteries are expected to have a rangeof around 500 kilometers per charge, mostly on par with gasoline cars. Usages for next-generation batteries outside
driving mobility machines may include power supply adjustment. Still, the CO2 reduction potential of these batteries
on passenger EVs was chosen for estimation.
According to IEA ETP 2017’s RTS, the total driving distance of light duty vehicles (LDV) stocks per year will be
63.9 trillion kilometers in 2050, with the CO2 emissions set at 5.47 Gt. The components of each passenger car stock inthis RTS are 12 percent for EVs (including plug-in hybrid (PHEV) and fuel-cell (FCEV) types) against 88 percent forcars with internal-combustion engines (ICEV, including hybrids (HV)). By assuming that 40–60% of ICEV are replaced
by EV with a next-generation battery, the esitimated CO2 reduction potential will be 0.27–0.91 Gt.
④ Enhanced oil recovery (EOR), CO2 capture and storage (CCS)This is a technology for separating, capturing, and storing CO2 emissions from power stations, steel mills, and otherfacilities generating CO2 with higher concentration. EOR plants have already been commercially operational as thismethod has an economic advantage over CCS, which simply stores CO2 . There will be further social implementations
for EOR in sites with better conditions (such as high CO2 concentrations or favorable locations). Nevertheless,innovative technologies for separating, capturing, transporting, and storing CO2 must be developed to offer introduce
this method at affordable costs in disadvantaged sites with lower concentration or geographical limitations for deeper
penetration.
In this Principle, the maximum possible amount that can be deduced from multiple IEA scenarios is taken as thebasis for the CO2 reduction potential estimate of 8.0 Gt.
⑤ Plastic recycling
Burning used plastics emits almost the same amount of CO2 generated by all the processes combined from raw
material extraction and product manufacturing. Recycling these plastics can dramatically reduce CO2 . While plastics
are already being recycled, many processes still involve methods that are not efficient for reducing CO2 . Developing
innovative technologies for each process, from sorting to material recycling, chemical recycling, and retrieving energy
can be expected to have a large CO2 reduction potential.
By assuming that, with the annual plastic production (for PE, PP, PET, and PS) reaching 0.4 Gt17 in 2050, of which
0.04–0.12 Gt (10–30 percent) recycled with innovative technologies, the CO2 reduction potential is estimated at 0.11–0.32
Gt. This figure covers the burning as well as production processes of plastics.

17 The future of Petrochemicals（IEA, 2018）20

Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

⑥ Bioplastic
Bioplastics derived from biomass-based raw material are carbon neutral since they have no impact on atmospheric
CO2 levels even when burned. The Ellen MacArthur Foundation report,“The New Plastics Economy: Rethinking the
Future of Plastics,”estimates the plastic production in 2050 at 1.124 Gt. The report also says that, by switching fromoil-based to biomass-based plastics, CO2 can be reduced by 140–200 percent in terms of weight.
By assuming that 20–30 percent of globally produced plastics can be switched to biomass-based types in 2050, andalso assuming that CO2 reduction impact can be as high as 200 percent of weight, then the CO2 reduction potential
can be estimated at 0.45–0.67 Gt.

21

Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

3 -4 Examples of CO Abatement Cost Estimation
2① Next-generation PV
More PV systems are being installed in Japan as mega-solar (commercial use) and rooftop applications. The cost ofgenerating power has been steadily falling, coming closer to the government target of ¥14/kWh by 2020 and ¥7/kWhby 2030. The power generation cost after 2030 is expected to achieve generation parity (¥7/kWh, on par with baseload power sources). Simultaneously, new research and development activities for next-generation PV technologies
giving the panels dramatically higher efficiency, lighter weight, flexibility, and many advanced properties, areexpected to bring new applications in diverse fields such as side wall systems for ZEB and vehicle systems. Figure 10
shows examples of CO2 abatement cost estimations for commercial applications as well as side wall and car-mounted
systems. The expectation for side wall and car-mounted applications is that they will be introduced to the market in
2030, followed by a steady drop in power generation cost (CO2 abatement cost) with advances in technology and massproduction effects. The power generation cost for side wall systems, projected at ¥129/kWh in 2030, will drop to ¥14/
kWh in 2050, lowering the CO2 abatement cost from ¥336,000/tCO2 to −¥4,000/tCO2 , For car-mounted systems, thepower generation cost of ¥98/kWh in 2030 will drop to ¥14/kWh in 2050, bringing down the CO2 abatement costfrom ¥217,000/tCO2 to −¥33,000/tCO2 . These figures must be handled carefully since the estimations are dependenton implementation requirements and many other conditions.

CO2 abatement cost ¥/tCO2

600,000

Commercial

Cars

500,000
400,000
300,000
200,000
100,000
0-100,000

1994

2001

2009

2017 2020
Year

Figure 10 Drop in PV CO2 abatement cost (estimate)
Source: Prepared by Technology Strategy Center, NEDO, 2019300
発電コスト 円/kWh

Side Wall

250
200
150
100
50

22

2030

2040

2050

Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

In this section, the CO2 abatement cost for PV in Japan is estimated. The CO2 abatement cost outside Japancannot be calculated in a uniform manner, since different countries have different power generation costs, energy
compositions, or CO2 emission intensities. The expectation is that Japan and other countries will all follow identicaltrajectories, with generation parity achieved for commercial and rooftop PV in most areas of the world by 2030. Evenin areas where innovative technologies are required, such as ZEB, floating, farmland, and car-mounted systems, thegrid parity is projected to be achieved by 2050. It is therefore reasonable to set the cost target per kWh for 2050
below the cost levels of current power sources. PV has large CO2 reduction potential. Its role will be dramaticallywider by lowering the cost for next-generation PV technologies through technological innovation. Note that gridconnection and battery costs for introducing PV are not included in this estimation, since PV systems are used indifferent environments and for different purposes in different parts of the world.
② Hydrogen power generation
In the“Strategic Roadmap for Hydrogen and Fuel Cells”(revised March 2019, METI), relevant goals are set as
follows:“¥30/Nm3 has been set as a target for the cost of hydrogen (plant delivery) to be achieved by around 2030,
with plans to further reduce costs to around ¥20/Nm3 in the future.”In terms of power generation costs, they aretranslated as ¥17/kWh and ¥12/kWh respectively. This policy targets have been used to forecast the CO2 abatement
cost for hydrogen power generation in Japan (see Table 1), which will be nearly ¥14,700/tCO2 in 2030. In the future(2050), if the traditional LNG power generation is to be switched to hydrogen power generation, the power generation
cost for the latter must be on par with the former. This means that by the time the hydrogen cost of ¥20/Nm3 (power
generation cost of ¥12/kWh) is achieved, the CO2 abatement cost will be as low as ¥0/tCO2 .
In order to achieve this, development of not only hydrogen power generation technology (advanced combustion
chambers and much higher efficiency), but also of supplying hydrogen (production, transportation, or storage,
for example) is important. It must be also noted that, if renewable energy-based electricity is used for producing
hydrogen with water electrolysis, then the hydrogen cost will be highly sensitive to the cost of that renewable energybased electricity.
Table 1 Example of estimated CO2 abatement cost for hydrogen power generation
Hydrogenpowerpower
generation
Hydrogengeneration
Type

Type

3 *1
3 *1
¥30/Nm¥30/Nm(2030 target)(2030 target)

Power generation
costPower generation
cost(¥/kWh) (¥/kWh)17.0 17.0

Hydrogencost3)(¥/Nm3)
Hydrogencost (¥/Nm

30

30

0

0

CO2 emissions
CO2 emissions(g/kWh)(g/kWh)
CO2 abatementcost
CO2 abatementcost(¥1,000/tCO2)(¥1,000/tCO)
2

LNGLNG
thermalthermal(referenced
traditional(referenced
traditional
technology)
technology)

3 *1 3 1¥20/Nm*¥20/Nm(futuretarget)(futuretarget)

*2,3

*2,3

*4

*4

14.7 14.7

12.012.0
20 20
0 0
0

0

*2,3 *2,3

*4

*4

12.0
12.0

- 340340

*5 *5

- -

*1 “Strategic Roadmap for Hydrogen and Fuel Cells” (METI, 2019)*1 “Strategic Roadmap for Hydrogen and Fuel Cells” (METI, 2019)*2 The cost for hydrogen power generation does not cover port facilities or any other infrastructures, land, or technology developments.
*2 The cost for hydrogen power generation does not cover port facilities or any other infrastructures, land, or technology developments.
*3 The energy efficiency of hydrogen power generation is set at 59 percent (LHV), with costs other than the fuel being on par with
*3 The energy efficiency of hydrogen power generation is set at 59 percent (LHV), with costs other than the fuel being on par with
LNG thermals (Power Generation Cost Validation WG)
LNG thermals(Power
Generation Cost Validation WG)*4 The CO
2 emissions from hydrogen power generation is set at zero, with only the emissions inside Japan being considered.
*4 The CO2 The
emissionsfrom hydrogen
power generationis setat zero,hydrogenwith onlyare
thenotemissions
CO2 emissions
from producing,transporting,or storing
included.inside Japan being considered.
The COemissionsfromproducing,transporting,or Stations”
storing hydrogenare not
included.
*52From“Higher
Efficiency
for Fossil-fuel
Power(METI, 2015),
usedduring the 18th meeting of the Strategic Policy*5 From “Higher
Efficiency
forAdvisory
Fossil-fuelPower Stations”
2015),
usedduring the 18th meeting of the Strategic Policy
Committeeof theCommittee
for Natural(METI,
ResourcesandEnergyCommittee of the Advisory Committee for Natural Resources and Energy
Source: Prepared by Technology Strategy Center, NEDO, 202023

Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

③ Next-generation battery for EV
In this section, the CO2 abatement cost for EV has been estimated based on the assumption that traditional vehicles
will be replaced by EV. In this calculation, the EV CO2 abatement cost is defined as the additional cost for replacing
traditional vehicles with EV divided by the amount of CO2 emissions reduced. In the following formula for calculating
the CO2 abatement cost for EV,“ICEV”stands for traditional vehicles with internal-combustion engines (including
HV).

In this formula, the numerator, actually the additional cost incurred when ICEV are replaced by EV, is the sum of
the price of electricity used by EV over the total driving distance subtracted by the price of fuel consumed duringthat time (tax excluded ) and EV purchasing price subtracted by ICEV purchasing price . The denominator, whichis the CO2 emission reduction when ICEV are replaced by EV, is the sum of the total CO 2 emissions from ICEV for
covering the total driving distance subtracted by the total CO 2 emissions from EV for covering the same distance andthe CO 2 emissions from ICEV production subtracted by the CO 2 emissions from EV production.
Table 2 shows all the assumptions behind this estimate. The future ICEV fuel mileage and EV electricity mileage
are taken from the IEA report, putting them at 19.6 km/L for HV and 5.3 km/kWh (battery charging efficiency set at
95 percent) for EV in 201818 . The fuel cost is based on the IEA RTS figure of ¥86/L19 (with ¥100 for one US dollar).
The electricity price comes from Japan’s level of ¥24/kWh20 , which is close to the median value for electricity price in
10 major countries (¥10–¥35) in 2016 as reported by the Central Research Institute of Electric Power Industry (CRIEPI).
The total driving distance of 200,000 kilometers21 is the maximum range used for calculations by Volkswagen. The (EVpurchasing price−ICEV purchasing price ) in the formula can be anywhere between zero to ¥1,000,000 because, while
the price remains higher for EV than ICEV, battery prices are dropping, closing the price gap between both types ofvehicle. As for the (CO 2 emissions during ICEV production−CO 2 emissions during EV production) part, the fact that
EV production emits more CO2 than ICEV, mostly because of CO2 emissions for producing batteries, had to be taken
into account. For the estimation in this Principle, the value has been factored in as a range between −5.0 t to 5.0 t,
with the bottom range taken from the Volkswagen report stating that one EV emits 5.0 t more CO2 than ICEV21 , while
the top range comes from the assumption that this will be reversed when the CO2 emissions from battery production
dropped in the future, with EV production process emitting 5.0 t less CO2 than ICEV.
Figure 11 shows the estimation results. The CO2 abatement cost is dependent on the differences between
purchasing prices and CO2 emission during production, having a ¥2,000/tCO2 –¥146,000/tCO2 range.

18 Global EV Outlook 201919 Energy Technology Perspectives 201720 Data comparing electricity prices in different countries, 2018

21 Volkswagen website (https://www.volkswagenag.com/en/news/stories/2019/04/from-the-well-to-the-wheel.html)

24Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

Table 2 Assumption behind estimations for CO2 abatement cost of EV
Assumption

Value

ICEV fuel mileage

19.6 km/L

EV electricity mileage

5.3 km/kWh

Fuel price¥86/L

Electricity priceTotal driving distanceEV purchasing price−ICEV purchasing priceCO2 emissions for ICEV
production−CO2 emissions for EV
production

Description
HV data for 2018 in IEA report18 was used as the future average.
EV data for 2018 based on battery charging/discharging efficiency of 95 percent18
was used.
IEA RTS model value19 is used, at the rate of ¥100 to one US dollar.

¥24/kWh

Japan’s electricity price is used because it was close the median value for ten
major countries (¥10–¥35) in the 2016 CRIEPI report20.

200,000 km

The maximum running distance of 200,000 kilometers used by Volkswagen for
calculation21 is used.

¥0–¥1,000,000

This figure is adopted to account for the fact that EV price is still higher than ICEV
even though the gap is closing because of the dropping battery price.

−5–＋5 tThis figure is adopted taking into account the Volkswagen report claiming that one
EV emits 5.0 t more CO2 than an ICEV21.

Source: Prepared by Technology Strategy Center, NEDO, 2020

CO2 abatement cost, ¥10,000/tCO2

15

10

CO2 emissions from EV production per unit
is 5.0 t more than ICEV

5

CO2 emissions from EV production per unit
is 5.0 t less than ICEV

0

0

20
40
60
80
(EV purchasing price−ICEV purchasing price), ¥10,000

Figure 11 Example of CO2 abatement cost when switching from ICEV to EV
Source: Prepared by Technology Strategy Center, NEDO, 2020

25

100

Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

④ CCS
Table 3 shows extracts from the Global CCS Institute report offering a detailed analysis on the CO2 abatement costof CCS. Excluding the ammonia production with a particularly high level of CO2 concentration and accompanying
gases, the current CO2 abatement cost level is ¥7,050–¥12,400/t CO222 (at ¥100 to one US dollar), which is expected to
go down by 20–30 percent in the future through technological development.

Table 3 CO2 abatement cost by emission source23 ($/tCO2 )Power generation

Manufacturing
Accompanying
gasSupercriticalpulverized
coalSupercritical
oxy-fuel
combustion

Traditional
technology

78.5

70.5

97.0

89.0

77.0

124.0

25.4

21.5

Future

55.0

52.0

46.0

43.0

65.0

103.0

23.8

20.4

IGCC

NGCC

Steel

CementAmmonia

Source: Prepared by Technology Strategy Center, NEDO, 2020, based on “Global costs of carbon capture and storage 2017”⑤ Plastic recycling (recycling and reusing)According to an EU estimate24 , the costs of various measures for recycling plastics to reduce CO2 can be relatively
low, ranging from −¥10,000/tCO2 to ¥5,700/tCO2 (at ¥100 to one US dollar). The method with the lowest cost is
the reuse of agricultural wrapping at −¥10,000/tCO2 , followed by chemical recycling at ¥5,500/tCO2 and reuse ofcontainer packaging at ¥5,700/tCO2 . Retrieving and reusing plastic products without additional chemical synthesis orforming processes will cost less than producing them from virgin plastic (a conventional method), and the reduction
cost will be negative value by definition. This means that this approach can reduce CO2 while maintaining economic
rationality.

22 The target in“Roadmap for Carbon Recycling Technologies”is ¥1,000/tCO2 or less after 2050 just by CSS.

23 Inside the USA, assuming pipeline transportation and CSS.

24 The Circular Economy–A Powerful Force for Climate Mitigation（SITRA, 2018）26

Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

3 -5 Promoting Strategical Development of Innovative Technology
As described in the previous Chapter, the marginal CO2 abatement cost of reducing CO2 emissions by 40 Gt solely
by traditional methods will exceed the level of ¥100,000/tCO2 , burdening the world with a cost of $10 trillion. This is
the reason why CO2 abatement cost must be reduced quickly.
Figure 12 shows the relationship between the CO2 abatement cost of a target technology (red line) and themarginal CO2 abatement cost of its counterpart traditional technology (blue line). With the introduction of innovativetechnologies, the CO2 abatement cost as well as marginal CO2 abatement cost can be dramatically lowered. This, inturn, will enable the social implementation schedule to be brought forward, helping dramatically reduce action costs.
Figure 12 is just an example for one innovative technology. In order to reduce CO2 emissions by 40 Gt, innovations
must be achieved for many more innovative technologies.
The key to future technological developments is to have higher performance, lower cost, reliability, better safety,
and other basis for competitive industry in scope, with additional analysis of factors such as CO2 reduction potential,
CO2 abatement cost, introduction timeline, and effectiveness of technological development to make comprehensive
judgments, culminating in a focused and strategic approach.
Still, a decarbonized society cannot be realized single-handedly by Japan. It is important to socially implement
innovative technologies already available in Japan while helping them be introduced to other parts of the worldin need of those technologies. Japan is expected to help move the entire world toward a sustainable society by

CO2 abatement cost, marginal CO2 abatement costdeveloping advanced technologies.

2020

Bringing
introduction
schedule
forwardFurther reductionof CO2 abatement
cost withaccelerated
development ofinnovativetechnology

Marginal CO2 abatement costlowered by deeper penetrationof innovative technology

2030

Year

2040

Figure 12 Relationship between technological development and cost reduction
Source: Prepared by Technology Strategy Center, NEDO, 2019

27

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Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

Chapter●

toward Creation of Framework
4 Expectation
for Facilitating Innovation

A sustainable society cannot be built without creation of a framework for facilitating technologicalinnovations aimed at solving climate change challenges as well as accelerating their social
implementation.

●

I t is important that Japan mobilize the entire nation to continuously discuss how to systematicallyestablish a favorable and attractive research environment and programs for advancing an innovativetechnology agenda through concerted and focused efforts by businesses and academia, improving themas required, together with promoting international partnerships for developing, as well as supporting
the implementation of, those innovative technologies.

In order to solve climate change challenges and build a sustainable society, initiation and social implementation of
disruptive innovation is indispensable. For this to be realized, programs for triggering accelerated innovation, such as
a comprehensive and objective evaluation system to identify promising technologies for solving climate change issues,
will become vital. At the same time, for ensuring that the disruptive innovation thus realized is socially implemented,
frameworks and systems for supporting the social implementation of innovative technologies also need to be built.
There are technology agendas that need to be tackled globally and quickly, such as climate change issues. Thosechallenges should be addressed by continuously developing programs and environment for research where allbusinesses’and academia’s resources can be concentrated.
Climate change is a global challenge that should be countered by initiating, leveraging, and introducing innovativetechnology throughout the world. This requires a continuous tracking of trends in technology and the status of theirdevelopment. Japan must be fully aware of its role in the global society and promote international partnerships.
The key to addressing these challenges is that all government, industry, and academia stakeholders steadily playtheir parts. Furthermore, since a sustainable society cannot be built without addressing serious challenges to thesociety, of which climate change is the most typical, promoting united efforts by industry, government, and academia
will be equally crucial. The government and other public authorities are expected to play a significant role to drive
this concerted effort that must involve all members of society.
In January 2020, the government of Japan authorized the“Environment Innovation Strategy,”with the aim ofmaking the most of its strength in the fields of energy and environment to initiate disruptive innovation in theseareas, make them affordable for social implementation so that they can be introduced globally, with action plans basedon the“Long-term Strategy under the Paris Agreement”and“Integrated Innovation Strategy 2019.”All stakeholders
must steadily work together in line with these Strategies. Also important is continuous discussions on building aframework for encouraging disruptive innovations so that systems can be continuously updated.

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Chapter

5 Conclusion

The aim of this“Comprehensive R&D Principle for Sustainable Society 2020”is to offer a comprehensive andobjective assessment of technologies that can effectively reduce CO2 . To that end, this Principle has estimated theessential CO 2 reduction potential and CO 2 abatement cost for a number of innovative technologies, provided theestimates with their underlying logic, in order to help further evaluation of innovative technologies that should be
developed and tested.
The world must solve its common issue of climate change caused by greenhouse gas, if it is to remain a prosperous
and eco-friendly society living together with its natural environment. As the United Nation’s Sustainable Development
Goals (SDGs) adopted by the 2015 Summit shows, focusing on sustainability has now become mainstream in theinternational society. For the purpose of resolving global environment issues while balancing SDGs requirements
other than global climate change, Japan is expected to drive developing technologies that can initiate disruptive
innovation, leading the way in creating a sustainable society.
The key to building a sustainable society is to facilitate the establishment of the three social systems (circular
economy, bioeconomy, and sustainable energy ) in a unified and organic manner, manage these technologies
comprehensively, toward their social implementation with economic rationality in mind.
The cost estimate for CO2 reduction shows that relying solely on traditional methods for offsetting 40 GtCO2
emissions will still incur some $10 trillion every year. This cost cannot be lowered without developing innovativetechnologies that can trigger innovation.
Another critical condition for a creating a sustainable society is the development of a framework that can accelerateinnovation and facilitate its social implementation. It is important that Japan engage all its citizens in continous
discussions on how to systematically establish a research environment and programs for advancing key technology
agenda through concerted and focused efforts by businesses and academia, improving them as required, together withpromoting international partnerships for developing, as well as supporting the implementation of, those innovativetechnologies.
The next steps will begin with evaluating the data that was not part of this Principle’s estimation, while theestimates already available will also be updated in steps. For this purpose, the latest technological developments inJapan and elsewhere will be tracked and partnerships with external institutions will be built, so that the evaluation
methods offered can be improved and made more objective. Also important is to consider the potential for further
CO2 reduction through merging and combining different technologies. While this Principle has focused on reducing
CO2 , which is 80 percent of greenhouse gas, reduction potential for other emissions such as CH4 or N2 O must also be
estimated.
NEDO will use these evaluation criteria in its technology strategies and other projects for quantitative assessment,so that results and methods acquired through these efforts can be applied for evaluation in many different fields.
The institution will also leverage this Principle for supporting its various research and development projects, fromembryonic initial-stage researches to initiatives for fast-tracking social implementation.
Lastly, NEDO will continue to play its role as an innovation accelerator that can actually deliver innovation to thesociety and strive to solve global climate change challenges as well as help build a sustainable society .

29Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

Appendix
Table. Examples of CO2 reduction potential and underlying logic*Estimation pattern

A: calculation based on estimated penetration of each technology
B: calculation based on estimates by specialist institutions

C: calculation based on targets and outlooks set out by the government and industries

D: calculation based on the maximum penetration of technology or installation of equipment
Technology

CO2 reduction
potential

GtCO2 /year
0.07–0.1

Estimation
pattern (*)
A

Basis for estimating CO2 reduction potentiala) emission intensity of innovative techs; b) emission intensity of traditional techs (tCO2 per specific unit);c) introduction amount (specific unit)–specific units are kWh, GJ, kg, t, and so on; d) description.
(7.2 tCO2 /t−0.3 tCO2 /t Aluminum) * 0.0106–0.0147 Gt/year = 0.07–0.1 GtCO2 /yeara) 0.3 tCO2 /t Aluminum

Aluminum recyclingb) 7.2 tCO2 /t Aluminumc) 0.0106–0.0147 Gt/yeard) Emission intensity values are for post-distribution stages. The emission intensity value for traditional
technology include impacts of efficiency improvement and fuel de-carbonization (currently 12 tCO2 /t, 7.2

tCO2 /t in 2050, Emission intensities based on “The Circular Economy 2018” (SITRA)).

Aluminum demand estimate of 0.211 Gt for 2050 is based on 2017 result and also the annual growth rateof 2.41% derived from 2040 forecast in World-Aluminum website (http://www.world-aluminium.org/).

Introduction amount is based on the assumption that innovative technology will increase the usage ofmanufactured material by 5.0–7.0%.
0.11–0.32

Ａ(4.48 tCO2 /t−1.85 tCO2 /t plastic) * (0.04–0.12 Gt/year) = 0.11–0.32 GtCO2 /yeara) 1.85 tCO2 /t plasticb) 4.48 tCO2 /t plastic

Plastic recyclingc) 0.04–0.12 Gt/yeard) 25 % of retrieved plastics is assumed to be sent to material recycling, another 25 % to chemical
recycling, with the remaining 50% going to energy recycling.

Emission intensities of innovative technologies (1.27, 0.48, and 2.83 tCO2 /t) are weighted averages basedon the above percentage for each method. Emission intensities of traditional technologies (3.72, 3.28,
and 5.46 tCO2 /t) are calculated using the same logic (The basic emission intensity for each method isbased on NEDO-TSC estimate).

The introduction amount range of 0.04–0.12 Gt is equal to 10–30% of 0.4 Gt/year, the projected plastic

EOR and CCS

output (PE, PP, PET, and PS) for 2050 in “The future of Petrochemicals” (IEA, 2018).
8.0Bd) Based on reduction potential estimates in the following literature.

8.0 Gt/year is taken as the maximum potential for CO2 reduction, based on several scenarios presented in

IEA ETP 2017 for estimating reduction impact. The maximum cumulative storage capacity has been set at
360 GtCO2 , after the “Storing CO2 through enhanced oil recovery” by IEA. It will take 51 years to exhaust

this reserve when emissions are stored at the rate of 7.0 GtCO2 /year.

30Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

Table. Examples of CO2 reduction potential and underlying logic (continued)*Estimation pattern

A: calculation based on estimated penetration of each technology
B: calculation based on estimates by specialist institutions

C: calculation based on targets and outlooks set out by the government and industries

D: calculation based on the maximum penetration of technology or installation of equipment
Technology

CO2 reduction
potential

GtCO2 /year
7.0

Estimation
pattern (*)
A, BBasis for estimating CO2 reduction potentiala) emission intensity of innovative techs; b) emission intensity of traditional techs (tCO2 per specific unit);c) introduction amount (specific unit)–specific units are kWh, GJ, kg, t, and so on; d) description.
644.7 gCO2 /kWh * 3,345 TWh/year = 2.2 GtCO2 /year

644.7 gCO2 /kWh * 4,655 TWh/year = 3.0 GtCO2 /year

644.7 gCO2 /kWh * 6,700 TWh/year + 300 gCO2 /kWh * 1,620 TWh/year = 4.8 GtCO2 /yeara) 0.0 gCO2 /kWhb) 644.7 gCO2 /kWh (floating and farmland); 300 gCO2 /kWh (wall and car)

Next-generation PVc) 11,665 TWh/yeard)・2.2 Gt: ETP 2017 RTS puts PV power supply at 3,345 TWh・3.0–4.8 Gt

3 .0 Gt: ETP 2017 2 DS and other figures formed the basis for assuming 8 ,000 TWh from PV in 2050 ,including the impact of next-generation innovative technologies. The difference of 4,655 TWh between

this 8,000 TWh and 3,345 TWh in RTS is understood to be the potential of next-generation innovativetechnologies.

4.8 Gt: By assuming further advances in technology and introduction of next-generation PV systems, thefollowing figures are derived: 2.02 TW for floating; 3.01 TW for farmland; 1.68 TW for side wall; 0.56 TW for

car-mounted. Facility utilization rates are set at 15.2% for floating and farmland combined, 9.6% for side
wall, and 8.7% for car-mounted.
B

Next-generation wind power

6.5c) 10,123 TWh/year

generation
power generationa) 0.0 gCO2 /kWhb) 644.7 gCO2 /kWhd)・3.4 Gt: ETP 2017 RTS sets wind power at 5,252 TWh.
・1.9–3.1 Gt

1.9 Gt: The 2,927 TWh gap between the 8,179 TWh wind power forecast for 2050 in ETP 2017 2DS and the5,252 TWh in RTS is assumed to be the potential of next-generation innovative technologies.

3.1 Gt: “Floating Offshore Wind: Market and Technology Review” (2015) sets that Japan, Europe, and the
US may potentially introduce floating offshore wind farms with total capacity of 6,950 GW. 20% of thispotential is the assumed target of this innovative technology, with facility utilization estimated at 40%.
0.7

Next-generation geothermal

644.7 gCO2 /kWh * 10,123 TWh/year = 6.5 GtCO2 /yearB

644.7 gCO2 /kWH * 1,094 TWh/year = 0.7 GtCO2 /yeara) 0.0 gCO2 /kWhb) 644.7 gCO2 /kWHc) 1,094 TWh/yeard)・0.4 Gt: ETP 2017 RTS sets geothermal power at 621 TWh・0.2–0.3 Gt

0.2 Gt: The 310 TWh gap between the 931 TWh geothermal power forecast for 2050 in ETP 2017 2DS andthe 621 TWh in RTS is assumed to be the potential of next-generation innovative technologies.

0.3 Gt: The bottom line is the projected 355 TWh for Deep EGS in GeoVision 2019 (https://www.energy.
gov/sites/prod/files/2019/06/f63/GeoVision-full-report-opt.pdf ). On top of this, it is also assumed thataround 50 more 300,000 kW-class Deep EGS or supercritical geothermal power stations will be built inJapan, Europe, and other locations.

31Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

Table. Examples of CO2 reduction potential and underlying logic (continued)*Estimation pattern

A: calculation based on estimated penetration of each technology
B: calculation based on estimates by specialist institutions

C: calculation based on targets and outlooks set out by the government and industries

D: calculation based on the maximum penetration of technology or installation of equipment
CO2 reduction
potential

GtCO2 /year
0.25–0.38

Estimation
pattern (*)
B

Basis for estimating CO2 reduction potentiala) emission intensity of innovative techs; b) emission intensity of traditional techs (tCO2 per specific unit);c) introduction amount (specific unit) – specific units are kWh, GJ, kg, t, and so on; d) description.

644.7 gCO2 /kWh * 381–590 TWh/year = 0.25–0.38 GtCO2 /yeara) 0.0 gCO2 /kWhb) 644.7 gCO2 /kWhgeneration

Ocean energy power

Technologyc) 381–590 TWh/yeard) 0.25 Gt: The 381 TWh gap between the 478 TWh ocean power forecast for 2050 in ETP 2017 2DS andthe 97 TWh in RTS is the assumed potential of this technology.

0.38 Gt: According to “Powering Homes Today, Powering Nations Tomorrow” (2018), ocean energy may
provide 1,181 TWh worldwide by 2050. 50% of this capacity is assumed to be actually introduced.
0.86–1.32

A((0.363 kgCO2 /kWh−0.295 kgCO2 /kWh) * 3,176–5,082 TWh/year)+ ((0.835 kgCO2 /kWh−0.650 kgCO2 /kWh) * 3,481–5,293 TWh/year) = 0.86–1.32 GtCO2 /year

High efficiency thermal power generationa) 0.295 kgCO2 /kWh for LNG and 0.650 kgCO2 /kWh for coalb) 0.363 kgCO2 /kWh for LNG and 0.835 kgCO2 /kWh for coalc) 3,176–5,082 TWh/year for LNG and 3,481–5,293 TWh/year for coald) With mass introduction of renewable energy, future thermal power plants must be equipped with

innovative technologies for improving their performance with features such as agility and partial or
minimum load operations. Based on the LNG and coal technologies described in “Technology Roadmap

for Next-Generation Thermal Power Generation,” the emission intensity of innovative technology for LNG
is from the average of GTCC and GTFC (with 60% efficiency) while that of coal is from the average of IGCC
and IGFC (50% efficiency).

The emission intensity value for traditional technology is taken from ETP 2017 RTS.

ETP 2017 RTS estimates are 10 ,586 TWh for LNG thermal and 11 ,604 TWh for coal thermal. The

introduction amount has been derived by assuming that 30–50% of these capacities will be replaced byinnovative technologies.

Note that impact from performance improvements in areas such as agility or partial/minimum load

operations are not accounted for in this estimation, although they will result in more fluctuating
renewable energy sources such as PV being introduced.

Hydrogen power generation

0.19–0.58

A, C

0.363 kgCO2 /kWh * 529.3–1,587.9 TWh/year = 0.19–0.58 GtCO2 /yeara) 0 kgCO2 /kWh (only for when hydrogen is used)b) 0.363 kgCO2 /kWhc) 529.3–1,587.9 TWh/yeard) The “Environment Innovation Strategy” sets the total CO2 reduction potential of hydrogen at nearly 6.0

Gt for production, transportation, storage, usage, and power generation combined (based on “Hydrogenscaling up” by Hydrogen Council, 2017). The above estimate covers just the power generation stage.

The emission intensity of hydrogen power generation is assumed to be 0 kgCO2 /kWh. The emission
intensity of traditional technology is taken from the LNG thermal figure in ETP 2017 RTS.

Power produced by LNG thermal in 2050 (without CCS) is estimated at 10,586 TWh/year (RTS). Of thiscapacity, 5.0–15% is assumed to be replaced by hydrogen power generation (529.3–1,587.9 TWh/year).
CO2 emissions from hydrogen production, transportation, or storage are not included.

32

Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

Table. Examples of CO2 reduction potential and underlying logic (continued)*Estimation pattern

A: calculation based on estimated penetration of each technology
B: calculation based on estimates by specialist institutions

C: calculation based on targets and outlooks set out by the government and industries

D: calculation based on the maximum penetration of technology or installation of equipment
Technology

CO2 reduction
potential

GtCO2 /year
0.06–1.2

Estimation
pattern (*)
A, CBasis for estimating CO2 reduction potentiala) emission intensity of innovative techs; b) emission intensity of traditional techs (tCO2 per specific unit);c) introduction amount (specific unit)–specific units are kWh, GJ, kg, t, and so on; d) description.
(86 gCO2 /km−15–75 gCO2 /km) * 5,620–16,900 Gkm/year = 0.06–1.2 GtCO2 /yeara) 15–75 gCO2 /kmb) 86 gCO2 /kmc) 5,620–16,900 Gkm/year (total driving distance of fuel cell vehicles)d) The “Environment Innovation Strategy” sets the total CO2 reduction potential of hydrogen at nearly 6.0

Gt for production, transportation, storage, usage, and power generation combined (based on “Hydrogen

Fuel cell vehicle

scaling up” by Hydrogen Council, 2017). The above estimate covers only the passenger types of fuel cellvehicles (FCV).

The emission intensity figures for FCV have been adopted from the “Hydrogen scaling up” (Hydrogen
Council, 2017): 15 gCO2 /km for green or clean hydrogen (based on renewable energy) and 75 gCO2 /km

for hydrogen produced by reforming LNG. The emission intensity of traditional technology is the average
figure derived from ETP 2017 RTS data for light duty vehicles (LDV), putting their CO2 emissions at 5.47
Gt/year and total driving distance at 63,900 Gkm/year.

Of the total LDV stock (2.4 billion units), 88% are ICEV (including HV) and 12% are EV (including PHEV and

FCEV). In this estimation, ICEV are assumed to be replaced by EV. The total driving distance for the ICEV tobe replaced is 56,200 Gkm/year. Another assumption underlying the total driving distance of FCV is that
their penetration will be 10–30% of ICEV.
(Total driving distance of all FCV)= (total driving distance of ICEV per year) * (FCV penetration)
5,620–16,900 Gkm/year = 56,200 Gkm * 10–30%

33Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

Table. Examples of CO2 reduction potential and underlying logic (continued)*Estimation pattern

A: calculation based on estimated penetration of each technology
B: calculation based on estimates by specialist institutions

C: calculation based on targets and outlooks set out by the government and industries

D: calculation based on the maximum penetration of technology or installation of equipment
Technology

CO2 reduction
potential

GtCO2 /year
0.27–0.91

Estimation
pattern (*)
A

Basis for estimating CO2 reduction potentiala) emission intensity of innovative techs; b) emission intensity of traditional techs (tCO2 per specific unit);c) introduction amount (specific unit)–specific units are kWh, GJ, kg, t, and so on; d) description.
(86 gCO2 /km−59–74 gCO2 /km) * (22,500–33,700 Gkm/year) = 0.27–0.91 GtCO2 /yeara) 59–74 gCO2 /kmb) 86 gCO2 /kmc) 22,500–33,700 Gkm/year

EV Next-generation battery for EV(total driving distance of EV with next-generation fuel cell)d) The “Environment Innovation Strategy” estimates that CO2 emissions can be reduced by 6.0 Gt after

taking all actions, such as electrification and fuel de-carbonization. The target of this Principle’s estimate
for the CO2 reduction potential of the next-generation battery is passenger type EV.

The emission intensity figure for EV is based on electricity used per unit distance by EV in 2018, 0.19–0.24
kWh/km (with 5.0% battery charging loss, see “IEA Global EV Outlook 2019”), and the emission intensityof electricity, 0.309 kgCO2 /kWh (ETP 2017 RTS).

(EV emission intensity) = (electricity used per unit distance by EV)* (emission intensity of electricity)

The emission intensity of traditional technology is the average figure derived from ETP 2017 RTS data forlight duty vehicles (LDV), putting their CO2 emissions at 5.47 Gt/year and total driving distance at 63,900

Gkm/year.

Of the total LDV stock (2.4 billion units), 88% are ICEV (including HV) and 12% are EV (including PHEV and

FCEV). In this estimation, ICEV are assumed to be replaced by EV with next-generation battery. The total
driving distance for the ICEV to be replaced is 56,200 Gkm/year. Another assumption underlying the total
driving distance of EV with next-generation battery is that their penetration will be 40–60% of ICEV.
(Total driving distance of all EV with next-generation battery)= (total driving distance of ICEV per year)* (penetration of EV with next-generation battery) 22,500–33,700 Gkm/year = 56,200 Gkm * 40–60%

34Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

Table. Examples of CO2 reduction potential and underlying logic (continued)*Estimation pattern

A: calculation based on estimated penetration of each technology
B: calculation based on estimates by specialist institutions

C: calculation based on targets and outlooks set out by the government and industries

D: calculation based on the maximum penetration of technology or installation of equipment
Technology

CO2 reduction
potential

GtCO2 /year
1.4

Estimation
pattern (*)
A

Basis for estimating CO2 reduction potentiala) emission intensity of innovative techs; b) emission intensity of traditional techs (tCO2 per specific unit);c) introduction amount (specific unit)–specific units are kWh, GJ, kg, t, and so on; d) description.

0.309 kgCO2 /kWh * 4,602 TWh/year = 1.4 Gt/yearc) Global electricity reduction: 4,602 TWh/yeard) The global electricity reduction in 2050 has been extrapolated from electricity reduction in Japan.
Global electricity reduction= (electricity reduction in Japan) * (global power generation in 2050 by RTS) / (power generation in
Japan in 2050)= 74.36 TWh/year * 45,000 TWh/year / 727 TWh/year= 4,602 TWh/year

Electricity reduction in Japan（１）Household appliance (air conditioner and refrigerator): 3.16 TWh（２）Hybrid vehicle and EV: 64.86 TWh（３）Industrial inverter replacement: 1.1 TWh（４）Computer-related: 0.91 TWh
Next-generation power electronics（５）Uninterruptible power supply (UPS): 0.1 TWh（６）Inverter for distributed power source: 0.58 TWh（７）Further introduction of inverter: 3.65 TWh（１）Household appliance (air conditioner and refrigerator)

In order to calculate the level of power savings, electricity used by these appliances per unit in 2050 is

estimated at 950 kWh for air conditioner and 520 kWh for refrigerator, while their stock volumes were set
at 100 million units for air conditioner and 60 million units for refrigerator. Performance improvement

rate with SI being replaced with SIC is estimated at 2 .5 % (“Next-Generation Energy Saving Device
Technology Survey”, Research and Development Association for Future Electron Devices (FED), March
2008), while also assuming that the transition to SIC will be 100% by 2050.

3.16 TWh = (950 kWh * 100 million units + 520 kWh * 60 million units) * 2.5%

（２）Hybrid vehicle and EV

Maximum motor output is estimated at 60 kW (from the Toyota website, data for Prius battery capacity)with average power output of 40 % (24 kW ) for 500 hours of driving per year (FED 2004 research
report and the 2005 NEDO survey and research on the introduction and acceptance strategy for SIC

power electronics). From the total vehicle stock of 79 million units in 2050 (Automobile Inspection &Registration Information Association website, number of registered vehicles as of April 30, 2012), 60%,

or 47 million units, is assumed to be next-generation cars (long-term energy supply and demand outlook

by the Supply and Demand Committee of the Advisory Committee for Natural Resources and Energy,
first announced in May 2008, revised in August 2008). In order to calculate the level of power savings,

performance improvement rate achieved for next-generation vehicles by switching from SI to SIC is
assumed to be 11.5% (“Next-Generation Energy Saving Device Technology Survey”, FED, March 2008),

while also assuming that the transition to SIC will be 100% by 2050.
64.86 TWh = 24 kW * 500 hours * 47 million units * 11.5% * 100%35

Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

Table. Examples of CO2 reduction potential and underlying logic (continued)*Estimation pattern

A: calculation based on estimated penetration of each technology
B: calculation based on estimates by specialist institutions

C: calculation based on targets and outlooks set out by the government and industries

D: calculation based on the maximum penetration of technology or installation of equipment
1.4A（３）Industrial inverter replacement

Power demand in 2010 was some 350 GkWh for industrial and some 200 GkWh for commercial usages (actual

power demand in 2010 by the Federation of Electric Power Companies of Japan, April 2012). Almost 70%of the former and 60% of the latter are presumably used by motors (“Survey on the Current Status andNear-Future Development of Power Consumption by Electric Devices and Equipment,” Fuji Keizai Group,

March 2009). Based on these data, the amount of electricity used by motors (“Survey on the Current
Status and Near-Future Development of Power Consumption by Electric Devices and Equipment,” Fuji

Keizai Group, March 2009 ) is estimated at 365 GkWh. Since 15 % of generic three-phase motors canbe assumed to have inverters, the amount of electricity used by inverter-equipped motors is set atapproximately 55 GkWh. In order to calculate the level of power savings, performance improvement
rate achieved for motors by inverters is assumed to be 2.0% (“Next-Generation Energy Saving Device
Technology Survey,” FED, March 2008), while also assuming that the transition to SIC will be 100% by
2050.

1.1 TWh = 55 GkWh * 2.0% * 100%

Next-generation power electronics (continued)（４）Computer-related

Production volume is estimated at 21.5 million units, their stock volume at 65 million with a three-year

life cycle, 150 W power consumption, and 2,000 hours of annual usage. In order to calculate the level ofpower savings, performance improvement rate achieved by switching from SI to SIC is assumed to be 4.7%(“Next-Generation Energy Saving Device Technology Survey,” FED, March 2008), while also assuming thatthe transition to SIC will be 100% by 2050.

0.91 TWh = 0.15 kW * 2,000 hours * 65 million units * 4.7% * 100%（５）Uninterruptible power supply (UPS)

Basic assumption for UPS is that it uses 300 W power, is used 8,760 hours per year, around 200,000 units

are built each year (from METI production volume statistics), and last five years, resulting in a stock levelof one million units. In order to calculate the level of power savings, performance improvement rateachieved by switching from SI to SIC is assumed to be 4.1% (“Next-Generation Energy Saving Device
Technology Survey,” FED, March 2008), while also assuming that the transition to SIC will be 100% by
2050.

0.1 TWh = 0.3 kW * 8,760 hours * 1.0 million units * 4.1% * 100%（６）Inverter for distributed power source

The capacity of PV facilities is estimated at 28,000,000 kW and their utilization rate at 12%. In order tocalculate the level of power savings, performance improvement rate achieved by switching from SI to SIC
is assumed to be 2.0% (“Next-Generation Energy Saving Device Technology Survey,” FED, March 2008),
while also assuming that the transition to SIC will be 100% by 2050.
0.58 TWh = 28,000,000 kW * 365 days * 24 hours * 12% * 2.0%

（７）Further introduction of inverter

As in the case of industrial inverter replacement (see (3) above), motor power usage is estimated at 360
GkWh. Switching from SI to SIC has a benefit of making devices smaller, which can be an incentive for

introduction of inverters to small pumps. Building upon the current inverter penetration of 15%, thepotential for further inverter penetration is estimated at 20% (“Survey on the Current Status and NearFuture Development of Power Consumption by Electric Devices and Equipment,” Fuji Keizai Group, March2009), of which 5.0% is assumed to be SIC inverters in 2050.
3.65 TWh = 365 GkWh * 20% * 5.0%36

Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

Table. Examples of CO2 reduction potential and underlying logic (continued)*Estimation pattern

A: calculation based on estimated penetration of each technology
B: calculation based on estimates by specialist institutions

C: calculation based on targets and outlooks set out by the government and industries

D: calculation based on the maximum penetration of technology or installation of equipment
Technology

CO2 reduction
potential

GtCO2 /year
0.072–0.17

Estimation
pattern (*)
A

Basis for estimating CO2 reduction potentiala) emission intensity of innovative techs; b) emission intensity of traditional techs (tCO2 per specific unit);c) introduction amount (specific unit)–specific units are kWh, GJ, kg, t, and so on; d) description.
(0.195–0.455 GtCO2 /year) * (1.0−(381 gCO2 /kWh / 603 gCO2 /kWh)) = 0.072–0.17 GtCO2 / yeara) 381 gCO2 /kWhb) 603 gCO2 /kWhc) 0.195–0.455 GtCO2 /yeard) The “Environment Innovation Strategy” sets CO2 reduction potential in the aviation sector at 2.0 Gt(METI estimate) when the measures based on IATA long-term targets, such as electrification and fuel decarbonization, are implemented. In this section, the impact of electrified aircraft is estimated, based on an

operation model for electric aircraft using next-generation batteries for domestic flight. These batteries,
once connected to the grid and charged, can let the aircraft cover a distance of around 1,000 km without

any other energy source. In order to ensure that the energy used for flight is taken into account, theenergy used by the electric aircraft is assumed to be the same as conventional aircraft.

The emission intensity of electric aircraft has been calculated based on the emission intensity of
Next-generation battery for aircraft

electricity, 0.309 kgCO2 /kWh (ETP 2017 RTS), while assuming that the electric aircraft’s energy efficiency
will be 81% (by also assuming the motor efficiency of 95%, energy conversion efficiency of 95%, andbattery discharge efficiency of 90%).

(Emission intensity of electric aircraft)= (emission intensity of electricity) * (energy efficiency of electric aircraft)

The emission intensity of traditional aircraft is set at 0 .0671 tCO2 /GJ, based on the carbon emission
intensity of jet fuel, 0.0183 tC/GJ (Ministry of the Environment document at https://www.env.go.jp/

council/16pol-ear/y164-04/mat04.pdf ). The energy efficiency of jet engine is assumed to be 40%, with aconversion rate of 0.278 Wh/kJ.

(Emission intensity of traditional technology)= (emission intensity of jet fuel) / (energy efficiency of jet engine) / 0.278 Wh/kJ

Estimate for CO2 emissions from jet fuel in 2050 is based on the official statement from EU in September

2019 (https://www.europarl.europa.eu/RegData/etudes/ATAG/2019/640169/EPRS_ATA (2019) 640169_
EN.pdf ) quoting the 2016 ICAO agreement that said the emissions are “expected to increase by a further

300-700%” against 2005 levels, and IATA data putting the CO2 emissions from jet fuel in 2005 at 0.65 Gt(“IATA Airline Industry Economic Performance,” https://www.iata.org/publications/economics/Reports/

Industry-Econ-Performance/Central-forecast-mid-year-2018-tables-v1.0.pdf, 2018)

CO2 emissions from jet fuel in 2050 will reach between 1.95 GtCO2 /year, if rate of increase from 2005 is

300%, and 4.55 GtCO2 /year if this rate is 700%. The assumption behind the energy consumption of 10%

is that electric aircraft will be used only for domestic flights, and then only for 25% of them. The energy
consumption rate for domestic flights is set at 40% of the total energy consumption (2017 IATA report,
https://www.iata.org/pressroom/pr/Pages/2017-09-06-01.aspx).
(CO2 emissions from jet fuel to be replaced)= (CO2 emissions from jet fuel in 2050) * (penetration of electric aircraft)

0.195–0.455 GtCO2 /year = 0.65 GtCO2 /year * (300–700%) * 10%37Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

Table. Examples of CO2 reduction potential and underlying logic (continued)*Estimation pattern

A: calculation based on estimated penetration of each technology
B: calculation based on estimates by specialist institutions

C: calculation based on targets and outlooks set out by the government and industries

D: calculation based on the maximum penetration of technology or installation of equipment
Technology

CO2 reduction
potential

GtCO2 /year
0.64–1.5

Estimation
pattern (*)
A

Basis for estimating CO2 reduction potentiala) emission intensity of innovative techs; b) emission intensity of traditional techs (tCO2 per specific unit);c) introduction amount (specific unit)–specific units are kWh, GJ, kg, t, and so on; d) description.
(0.0671 tCO2 /GJ−0.0302 tCO2 /GJ) * 17.5–40.7 EJ/year = 0.64–1.5 GtCO2 /yeara) 0.0302 tCO2 /GJb) 0.0671 tCO2 /GJc) 17.5–40.7 EJ/yeard) The “Environment Innovation Strategy” sets CO2 reduction potential in the aviation sector at 2.0 Gt(METI estimate) when the measures based on IATA long-term targets, such as electrification and fuelde-carbonization, are implemented. In this section, the impact of bio-jet fuel is estimated, based on theassumption that bio-jet will be widely used and power all international flights (mixture rate 100%) in

2050 (making up 60% of total consumption, according to 2017 IATA data in https://www.iata.org/conten
Bio-jet fuel for aircraft

tassets/9faa9f69011d46c484d93e6dd97a7f52/passenger-analysis-jul-2017.pdf ).

The CO2 emission intensity of bio-jet fuel is based on CO2 emission intensity of existing jet fuel, 0.0671

tCO2 /GJ, and assumed to be 45 % of this figure. Since Japan has yet to define regulatory values for

reducing CO2 emission from bio-jet fuel, the maximum CO2 emission allowed for bio-methanol, which is

45% of fossil-based fuel, has been applied.

The CO2 emission intensity of current jet fuel is set at 0.0671 tCO2 /GJ, based on the carbon emission

intensity of jet fuel, 0.0183 tC/GJ (Ministry of the Environment document at https://www.env.go.jp/
council/16pol-ear/y164-04/mat04.pdf ).

Estimate for CO2 emissions from jet fuel in 2050 is based on the official statement from EU in September

2019 (https://www.europarl.europa.eu/RegData/etudes/ATAG/2019/640169/EPRS_ATA(2019)640169_
EN.pdf ) quoting the 2016 ICAO agreement that said the emissions are “expected to increase by a further

300-700%” against 2005 levels. This 300–700% range has been directly applied here. This means that CO2
emissions from jet fuel, 0.65 GtCO2 /year in 2005 (https://www.iata.org/en/iata-repository/publications/

economic-reports/airline-industry-economic-performance---2018-mid-year---table/), in 2050 will reach

between 1.17 GtCO2 /year if rate of increase from 2005 is 300%, and 2.73 GtCO2 /year if this rate is 700%.

When the CO2 emission intensity of 0.0671 tCO2 /GJ is applied, the energy consumption will be 17.5–40.7
EJ/year.

Cellulose nanofiber

0.22–0.27

A

1.5 tCO2 /unit * (1.8–2.2 billion units) / 12.44 years = 0.22–0.27 GtCO2 /yeard) The “Environment Innovation Strategy” estimates that CO2 emissions can be reduced by 6.0 Gt after
taking all actions, such as electrification and fuel de-carbonization.

This section has estimated the CO2 reduction potential of light-weight composite material produced from

cellulose nanofiber (CNF) and plastic. According to research data, CO2 emissions of a vehicle throughout
its lifecycle can be lowered by 1.5 tCO2 per unit (J. Jpn. Inst. Energy, 95, 8, 2016), with a vehicle’s lifetime
set at 12.44 years.

A PricewaterhouseCoopers forecast puts the number of vehicles in 2050 at 2.01 billion units. Allowing forvariances of 0.2 billion units in both directions has resulted in the 1.8–2.2 billion range.

38Technology Strategy Center ReportComprehensive R&D Principle for Sustainable Society 2020

Table. Examples of CO2 reduction potential and underlying logic (continued)*Estimation pattern

A: calculation based on estimated penetration of each technology
B: calculation based on estimates by specialist institutions

C: calculation based on targets and outlooks set out by the government and industries

D: calculation based on the maximum penetration of technology or installation of equipment
Technology

CO2 reduction
potential

GtCO2 /year
0.45–0.67

Estimation
pattern (*)
A

Basis for estimating CO2 reduction potentiala) emission intensity of innovative techs; b) emission intensity of traditional techs (tCO2 per specific unit);c) introduction amount (specific unit)–specific units are kWh, GJ, kg, t, and so on; d) description.
1.124 Gt/year * 20–30% * 2.0 tCO2 /t plastic = 0.45–0.67 GtCO2 /yearc) 20–30%d) The Ellen MacArthur Foundation report “The New Plastics Economy: Rethinking the future of plastics”

Bioplastic

estimates plastic production level in 2050 at 1.124 Gt/year, while Japan Organics Recycling Association’s

projection for CO2 emission reduction impact from switching to petroleum-based plastics to biomass-

based types is around 140–200% of the plastics’ weight.

Assumption behind the CO2 reduction potential of 0 .45 –0 .67 GtCO2 is that, by 2050 , 20 –30 % of allplastics are switched to biomass-based material, and also that the CO2 reduction will be 200% of theForestation

plastics’ weight.
3.6–3.8

Bd) These estimates are taken from study by the Mercator Research Institute on Global Commons andClimate Change and other researchers (Environ. Res. Lett., 13, 2018), and another study by the United
Nations Environment Programme (UNEP) (The Emissions Gap Report 2015).

39

Technology Strategy Center ReportComprehensive R&D Principle
for Sustainable Society 2020
February 2020

New Energy and Industrial Technology Development Organization
Technology Strategy Center (TSC)■ Executive Director

MISHIMA Yoshinao■ Director General

NISHIMURA Hidetaka■ Publishing Members of Comprehensive Principle
IEMURA Shozo, UENO Nobuko, EGAWA Hikaru, OHKUBO Hiroaki,
KAWAKAMI Hiroshi, KAWARADA Kensuke, DOHI Hideyuki, NAGASHIMA Masaki,
NIKI Shigeru、HASEGAWA Mami, HATANO Junichi, HAYASHI Naoyuki,
MASUDA Miyuki, MORI Noriyuki, YANAGIDA Yasuhiro, YABE Akira●Contact for this report
Tel. +81-44-520-5150（Technology Strategy Center）●This report can be downloaded from the URL below.
https://www.nedo.go.jp/library/foresight.html

This report is based on the interpretation of the Technology Strategy Center.
The contents of this report may be quoted, reprinted, and reproduced in whole or in part aslong as such actions are permitted under the Copyright Act for private use, quotation or otheruse, with clear indication of the source in an appropriate way.
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