By Motoko Hasegawa

October 5, 2020 - Japan's trade and industry ministry (Meti) is seeking an increased budget to drive a low-carbon transition and possible phasing out of inefficient coal-fired power plants, as Covid-19-induced greenhouse gas emissions cuts prompt a further acceleration towards the country's decarbonization.

Meti has requested to increase the budget for the country's transition to greener energy to ¥490.2bn ($4.65bn) in the April 2021-March 2022 fiscal year, up by 15.2pc compared with ¥425.7bn initially allocated in 2020-21. The amount accounted for 34.2pc of the ministry's total budget request of ¥1.4 trillion. The request was submitted on 30 September to the finance ministry.

The budget request included ¥24.4bn, up by 25.8pc from a year earlier, to push forward a plan to phase out inefficient coal-fired power plants by 2030. Meti is looking to installing integrated gasification fuel cell combined-cycle technology by 2022 and realising a 20pc mixture of ammonia at coal-fired power plants by 2024.

Japan is promoting the use of CO2-free ammonia as a power generation fuel, saying a 10-20pc mix at a coal-fired power plant will not require any large-scale refurbishment. The country has started buying from Saudi Arabia's state-controlled Saudi Aramco blue ammonia, which is produced by converting hydrocarbons to hydrogen and then to ammonia. Aramco last month shipped 40t of blue ammonia to Japan, to be co-fired with gas and coal to generate electricity.

Meti has increased its 2021-22 budget request for development of carbon capture utilization and storage technology and carbon recycling by 21.3pc to ¥53bn. It has also allocated ¥231bn, up by 16.2pc, to further develop energy saving and renewable power technology. The ministry allocated ¥1.5bn to promote the use of domestically-supplied woody biomass for power generation.

The budget request for the energy transition also included ¥84.8bn to realise a hydrogen-based society and ¥137.1bn for nuclear innovation, up by 21.1pc and 5.5pc compared with the 2020-21 budget.

Meti has also increased its budget request for 2021-22 to secure natural resources, such as oil, natural gas, methane hydrates and rare earths, up by 8.4pc to ¥125.6bn.