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It’s not oil or LNG: Japan lays foundations for green energy cooperation with Gulf States

Published

10 months ago

July 27, 2023

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It's not oil or LNG: Japan lays foundations for green energy cooperation with Gulf States

Prime Minister Fumio Kishida’s visit to the Middle East last week has led to a flurry of agreements for studies that Japan hopes will encourage key countries in the region to become hydrogen partners.

The July 16-18 trip to Saudi Arabia, the United Arab Emirates and Qatar, had led to some market expectations of oil and liquefied natural gas (LNG) deals. Those did not eventuate.

Instead, the trip which saw Kishida travel with representatives from 40 Japanese companies, appears to have fulfilled its stated aim of promoting cooperation in green and renewable energy.

Gulf countries are seen as well placed to form a green energy production hub due to their low solar energy production costs.

One key agreement has been a Japan-Saudi Arabia initiative called Lighthouse that aims to develop clean energy projects relating to areas such as hydrogen, ammonia and carbon recycling.

Separately, at least seven agreements, many memoranda of understanding, were signed between Japanese companies and Middle Eastern firms during the trip.

These include an agreement between JERA and ADNOC to study cooperation in clean hydrogen and ammonia and a pact between Sumitomo Corp and Sharjah National Oil to study the feasibility of a carbon capture and storage project in the UAE.

Other agreements covered joint studies for low-carbon metal production and future supply chain options.

“Although MOUs are obviously of lesser significance than supply contracts, touching base for future cooperation and sending a message of long-term interest in the imports of hydrogen and derivatives from the Gulf countries is important,” said Aliaksei Patonia, research fellow at the Oxford Institute for Energy Studies.

He noted that Japan has expertise in electrolysis for hydrogen made from renewable sources and pyrolysis for hydrogen production from methane.

Japan is betting big on hydrogen and has pledged to invest over $100 billion in the next 15 years to boost supply – secured both at home and abroad. It expects it will need 3 million metric tons a year by 2030, up from 2 million currently and predicts that to jump to 12 million metric tons by 2040.

It plans to use the fuel to decarbonise industries, from auto manufacturing to power plants, that currently chiefly run on fossil fuels such as coal, oil and LNG.

Hydrogen is also key to producing ammonia, which it wants to use in its fuel mix to extend the life of coal-fired plants and is a significant part of Japan’s plans to shift to clean energy.

According to the International Energy Agency, Gulf countries plan to export 1 million tons of low-emission hydrogen by 2030.

The Economic Intelligence Unit said Kishida’s trip highlights Japan’s precarious energy security situation.

“Japan will remain dependent on imports to meet its energy demand, even if it achieves success in transitioning from fossil fuels to clean energy sources,” it said in a note to clients.

Analysts also said Japan needs to strengthen its Gulf relationships if it wants to compete with China, the world’s top hydrogen producer and consumer.

“China is putting more resources into clean energy than any nation, and Japan expects competition from China in locking down Gulf supplies for the future,” said David Boling, director for Japan & Asian Trade at Eurasia Group.

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Business

Chinese firm aims to expand investments in Pakistan, shows interest in mining sector

Published

1 day ago

May 17, 2024

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Chinese firm aims to expand investments in Pakistan, shows interest in mining sector

A notable Chinese company has expressed keen interest in expanding its investment in Pakistan, in yet another sign of investor confidence boost in the leadership of Prime Minister Shehbaz Sharif.

A delegation from Chinese firm MCC Tongsin Resources led by its Chairman Wang Jaichen called on PM Shehbaz here on Friday.

The premier invited the Chinese company to invest in Pakistan’s mining sector and manufacturing of export goods.

Shehbaz assured the delegation that his government would extend all-out facilitation to the company from minerals exploration and processing to the export of goods.

The PM instructed the relevant federal ministers and officers to continue consultation with the Chinese firm, taking the Balochistan chief minister, provincial departments and stakeholders on board.

The delegates reposed trust in PM Shehbaz’s leadership, and expressed keen interest in enhancing their investment in Pakistan’s mining and minerals sectors.

The delegation briefed Prime Minister Shehbaz about the construction of a mineral park in Pakistan and their future investment plans.

The premier welcomed the Chinese firm and highlighted the priority steps by his government to promote foreign investment in Pakistan.

He said that being a time-tested friend, China supported Pakistan in every difficult hour for which the Pakistani nation was grateful to the leadership and people of China.

Federal ministers Ahad Khan Cheema, Dr Musaddik Malik, Rana Tanveer Hussain, Jam Kamal Khan and relevant senior officers attended the meeting.

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Business

Govt jacks up power price by Rs1.47 per unit

Published

1 day ago

May 17, 2024

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Govt jacks up power price by Rs1.47 per unit

The government on Friday increased the electricity tariff by Rs1.47 per unit.

According to Nepra sources, the collection from consumers will take place in August, September, and October.

The electricity companies had requested the funds as part of the third quarter adjustment for 2023-2024, seeking Rs 31.34 billion under capacity charges.

Sources said that Rs5.57 billion were requested for operation and maintenance costs, and Rs12.38 billion were requested for the transmission and distribution impact under monthly fuel cost adjustment.

Previously, Nepra had completed the hearing on the electricity companies’ request under the quarterly adjustment.

Nepra approved the Power Division’s request, allowing an increase of Rs 1.45 per unit in electricity prices.

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Business

Hong Kong allows China’s digital yuan to be used in local shops

Published

1 day ago

May 17, 2024

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Hong Kong allows China's digital yuan to be used in local shops

Hong Kong will allow mainland China’s pilot digital currency to be used in shops in the city, the head of its de facto central bank said on Friday, marking a step forward for Beijing’s efforts to internationalise the yuan amid rising geopolitical tensions.

The programme, backed by Beijing, will allow mainland Chinese and Hong Kong residents to open digital yuan wallets via a mobile app developed by China’s central bank and will permit them to make payments in retail shops and some online stores in Hong Kong and in mainland China.

Transactions using e-CNY, predominantly for domestic retail payments in China, hit 1.8 trillion yuan ($249.27 billion) as of end of June 2023, with 120 million digital wallets opened, according to the latest disclosure from China’s central bank.

Using the wallet, users can make payments at over 10 million merchants in 17 provinces and cities in the mainland.

Each wallet used in the city will be subject to a balance limit of 10,000 yuan, with single transactions and daily payments capped at 2,000 yuan and 5,000 yuan, respectively, officials from the Hong Kong Monetary Authority said.

Peer-to-peer transfers will not be allowed at the moment, according to the HKMA.

“By expanding the e-CNY pilot in Hong Kong .. users may now top up their wallets anytime, anywhere without having to open a mainland bank account, thereby facilitating merchant payments in the mainland by Hong Kong residents,” HKMA Chief Eddie Yue said.

Currently, users of other digital yuan wallets such as those operated by Ant Group and Tencent can make payments in the city.

Industrial and Commercial Bank of China, Bank of China Ltd, China Construction Bank Corp and Bank of Communications Co have been selected as e-CNY wallet operators.

The yuan’s use in global finance remains low, though it has shown steady increases.

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