JAPAN

For Germany, Japan is one of the most important partners in Asia, in terms of economic relations and common values. In addition to the determination to maintain and enhance the multilateral order together, there is also the desire for closer cooperation in future technologies. Japan and Germany face similar challenges, particularly with regard to the future of manufacturing and the demographic development of their societies.

In both countries, businesses share a growing interest in collaborating onin key technologies, such as artificial intelligence, digitalisation, mobility and renewable energies. Japan is also Germany’s second most important trading partner in Asia. The volume of trade between Germany and Japan has grown continuously since 2009 (BMWi).

The free trade agreement between the EU and Japan, which came into force at the beginning of 2019, also offers great opportunities to further expand this close economic relationship.

The agreement also contains a separate sustainability chapter, giving both countries the opportunity for joint action in the future. Climate protection is no longer a niche topic in Japan: in October 2020, the government announced that Japan would achieve climate neutrality by 2050.

Japan clearly feels the consequences of climate change. Climate protection goals will not be achieved without a drastic change in policy. The Japanese government’s energy plan also stipulates the need to develop more efficient and connected energy systems. However, judged by the already available technologies, the challenges and costs to implement such systems remain high. Herein lies enormous potential for cooperation: joint solutions that offer innovative and flexible integration of different energy sources. Such solutions are the key to converting traditional energy sources into renewable ones. Joint research into technologies for energy storage, batteries, grid regulation and hydropower could be important components of the cooperation between the two countries.

Currently, the Russian war of aggression against Ukraine demonstrates how important partnerships are that are based on mutual trust and common values. Especially when what is at stake is the independence of energy supply chains from Russia. The trip by Chancellor Olaf Scholz to Japan in April 2022 has shown that Japan ranks high on the foreign policy agenda of the federal government, especially when it comes to energy. During his two-day visit to Japan, Scholz repeatedly emphasised the significance of the future hydrogen cooperation between Germany and Japan. Massive investment in building up a broad hydrogen supply chain is a key element of Japanese government policy.

Energy security as well as stable and affordable electricity prices are priorities for Japan’s policy-makers and the Japanese population. Therefore, the government – under the leadership of the conservative LDP – will hold on to fossil fuels for quite some time and gradually power up the reactors that were shut down after the disaster in Fukushima. For the time being, nuclear power and coal will initially remain integral parts of Japan’s energy supply. However, de-carbonisation is steadily gaining more political ground in Japan. Energy security, economic growth and climate protection – can all these objectives be reconciled in the future?

In trying to come up with an answer to this question, Japan is looking towards Germany. With its “energy transition“, Germany has set an example to the world and is recognised, in Japan and elsewhere, as a pioneer of renewable energy technologies.

In line with the March 2022 G7 summit declaration on the situation in Ukraine, the Japanese government has announced that it will gradually reduce coal and oil imports from Russia. Unlike Germany, Japan imports only roughly 4 percent of its oil, 11 percent of its coal and less than 9 percent of its natural gas from Russia. Japan is by far not as dependent on Russian energy as Germany, which sourced roughly 55 percent of its imported gas from Russia until the start of the war.

In the past, Japan was not exactly the country to which Germany turned to in search of energy and climate protection partnerships. Japan’s reliance on nuclear energy and coal seemed too much of a given. However, in order to reduce CO2 emissions in the future, the Japanese government is promoting the development of alternative and climate-friendly forms of energy more and more actively.

That is why Japan is breaking new ground in the production of domestic hydrogen and considers itself a global pioneer. By having hydrogen as its main energy source in the future, Japan wants to achieve the Paris climate protection goals and significantly reduce its dependence on imported fossil fuels. By 2040, Japan plans to shift the energy supply of its entire industry to hydrogen, and by 2050, to reduce its greenhouse gas emissions by 80 percent.

Hydrogen generation has, by now, attracted a lot of attention in Germany. The question remains, however, which production methods can be defined as climate-neutral. This is a stumbling block for German-Japanese hydrogen cooperation. Contrary to opinions within the EU, the German three-party coalition has stated that hydrogen can only be considered climate-neutral if it is generated by using fully renewable energies (“green“ hydrogen). Japan, however, promotes so-called “blue“ hydrogen, which it defines as climate-neutral, referring to the re-use of greenhouse gases emitted during the production process.

The war in Ukraine has considerably boosted the importance of hydrogen for Japan and Germany. Both heads of government consider hydrogen development based on Japanese-German cooperation to be an important factor for creating broad-based prosperity. The potential for this cooperation, however, remains limited, because the generation of “blue“ hydrogen is controversial within the German government. Japan relies on this production technology as a necessary step in order to mitigate the consequences of the energy transition, before the generation of “green“ hydrogen can be scaled up.

According to Japanese researchers, trains and aircraft will soon be hydrogen-powered. Toyota is sponsoring research on the use of hydrogen in tractors, refrigerated transporters, large long-haul trucks and in heavy-duty harvesting machines. The energy density of a filled hydrogen tank is between 100 and 200 times higher than that of a lithium-ion battery.

Today, hydrogen is already being used in fuel-cell vehicles and in industrial applications. However, it would not make much sense to use hydrogen as a fuel for motor vehicles alone. Rather, it is much more useful as an intermediate storage medium for renewable energy. According to experts, the use of hydrogen is only effective in the context of expanding new energy sources.

The war in Ukraine has triggered a necessary and accelerated debate on energy security. Despite the current interest expressed by both sides, there is still a lack of specific, fully spelled out joint projects, although the rallying cry is “independence“. The current debate in Japan and Germany shows how difficult it is for the two countries to wean themselves off Russian energy and acquire new energy partners. Germany is rightly focusing on the accelerated development of renewable energies. Costs for final consumers and financial burdens should not be ignored – an aspect that weighs heavily in determining Japanese energy policy. Costs and climate protection are emotional issues that energy policy must accept to be judged by. 

Mutual declarations of intent on more innovation, higher competitiveness, sustainable development and permanent employment in the energy sector should be turned into jointly operated research and technology centres, an institutionalised debate at relevant technical levels and, if possible, an intensified cooperation among universities. It is simply not enough to keep coming to the conclusion that closer cooperation would be desirable. The federal government should propose specific feasible projects and follow up on them. The Indo-Pacific strategy is helpful here, because it already outlined the potential of cooperation on energy policy in 2020. However, the domestic debate on which generation methods will finally be defined as climate-neutral remains an obstacle for German-Japanese hydrogen cooperation. Until “green“ hydrogen can be produced at lower cost, Germany could follow the example of Japan, the market leader, and approve the production of domestic “blue“ hydrogen.

Rabea Brauer heads the KAS office in Japan.

Last update: 13 May 2022