The role of low emission technologies will pivot from direct emission reduction, to helping produce clean energy sources, as the energy transition matures on the path to net zero.

In an exclusive interview with LETA, the managing director of the Australian arm of Japanese energy company Idemitsu, Fumitake Uyama said there was no single or simple solution to reaching net zero by 2050. Adding to the climate challenge, he said, was achieving carbon neutrality while meeting the “need to supply and use energy now”.

“Low emission technologies, like CCUS are important to reduce the immediate emissions. But in the future, it is more about making products like hydrogen and other clean sources to produce energy that will be important,” he said.

Mr Uyama said resources companies need to respond to the different directions demanded by customers and the public “by thinking about the future in advance”.

In a wide ranging interview Mr Uyama also highlighted:

• the emerging role of low emissions technology for companies seeking to meet ESG commitments
• the need for longer term government investment in low emissions technology projects, as well as cooperation between companies and research organisations
• the important role of good bilateral relationships between companies in working to meet the net-zero challenge.

Read the full interview below.

Q&A with Idemitsu’s Fumi Uyama

Q: What role do low emission technologies play in the energy transition?

In the past, the energy transition was driven by economics, now it also has an environmental component. That’s the nature of change. So that’s why low emission technology is important; for helping the environment, and also for business. Carbon dioxide is inevitably produced in extracting energy from fossil fuels. The question is how to efficiently extract energy and lower emissions. LETs makes a great contribution to that.

Q: From clean fuels to reducing industrial emissions – what are the areas of emission reduction where low emissions technology can have the most impact?

Low emission technologies are designed to have a major impact on reducing overall carbon-based emissions. Low emission technology is a broad term, right? There are many things they can help with, not only reducing the carbon dioxide, but also producing hydrogen and ammonia efficiently and cleanly. However, reducing industrial emissions is one of the most effective areas where low emission technologies can help.

At this moment, the reduction of carbon dioxide is not a simple matter, especially now with the target of being carbon neutral by 2050. The difficulty of this issue is not only carbon neutrality, but we need to supply and meet energy demands now.

Technologies like CCUS are important to reduce immediate emissions. In the future, its role is more around making products like hydrogen and other clean energy sources that will be important. So if we don’t have to rely on carbon for energy that could be a very good solution in the future, but not right now. We need to use carbon energy for many things. We cannot avoid that. So that’s why reducing carbon dioxide is a near to medium term aim through low emission technologies and the future is about different clean energy types.

The emerging energy mix across a range of technologies, including low emissions technology are critical. Together they are showing the most potential, particularly with Australia being a resource rich country with extensive capability to develop new industries and technologies.

Q: How have attitudes to low emission technologies changed over time for Idemitsu and from your personal experiences?

As world leaders address climate impacts, there is a lot more awareness about greenhouse gas emissions. As a result, attitudes have changed, with a lot more expectation that emission reduction technology will continue to be developed and contribute to carbon neutral targets being set across the world.

I have been in the resource business for more than 35 years now. And when I started working for the resources industry, we didn’t think much about carbon dioxide as such. Gradually talking about CO₂ emissions and other emissions, the focus on the environment has increased. People are looking more into environmental issues.

Q: How has this change in attitudes had an impact on the work you do?

Idemitsu is an energy company providing energy to the customers and whatever else they need. So our customers have changed their climate change needs. When our customer moves in different directions, we follow that direction, but also thinking about the future in advance and providing or proposing new fuels. For example, right now we are doing a pilot that mixes biomass with coal to reduce carbon dioxide. So that is an answer to our customer’s need to reduce carbon dioxide. So that kind of change is happening.

Q: What policy changes or regulatory settings need to be brought in to promote the use of and investment in low emissions tech?

Low emissions technology development requires long-term investment, so longer-term continuous financial support is needed. Also, it is very difficult for low emissions technologies to make a meaningful level of contribution with the efforts of one or a few companies. Ideally, some level of direct investment from the government is desirable.

Q: Do you think Japan is more open to new technologies to reduce emissions than Australia and the rest of the world?

 Japan is not so advanced at this moment, because it’s an energy poor country and we don’t have many energy options. Wind, solar, and geothermal are a tiny proportion of our energy inputs. We don’t have any resources in Japan, like oil, so we need to import energy in most cases. At this moment, low emission technology is also costly to the Japanese industry. So Japan lacks flexibility and it is not easy to move ahead of other countries in Europe.

Q: What role can Australia play to help Japan reduce emissions?

Hydrogen trade between Japan and Australia is important. In Japan, we don’t have the land or resources to produce large amounts of hydrogen. Australia and Japan’s relationship is very good, so we can cooperate with Australia and especially on resources. This means not only you can supply fossil fuel but other fuels like hydrogen.

Japan is a very small country. The limited part we can contribute is in technology matters. So we can cooperate with Australia in technology and research areas. The Foreign Investment Review Board has said that now Japan is the second largest investor to Australia. This means not only are we importing resources and food from Australia, but also we are investing in Australia too.

Q: What role can low emission technologies play in helping companies achieve their ESG commitments?

Low emissions technology is relevant to all elements of ESG. We are doing work in Japan at the moment on CCUS. For the emissions issue there is no single great answer, so we need to work in many areas and that is the same with ESG.

Q: Can you explain the hydrogen and ammonia project that Idemitsu is working on, at the Port of Newcastle in partnership with ARENA?

We’re looking at the kinds of opportunities to improve clean hydrogen or ammonia.

For an example, we are in the process of developing renewable and clean energy post mining land options at our coal mine in the NSW Hunter Valley, so we are invested in the region. This Port of Newcastle study is into export and bunkering of green hydrogen and ammonia. The idea is to commercialise the manufacturing, storage, transport, sales and export of green hydrogen and ammonia.

There are many companies involved, which is good, because some hydrogen goes for local consumption and the other part is for export. With hydrogen, it’s not possible for one company to develop technologies on their own. That’s a big investment. So I think cooperation or consortium between governments, companies and research organisations is necessary.

Q: What is Idemitsu seeking to achieve with your active role in LETA?

Reducing carbon emissions is essential. And Idemitsu cannot do that by itself. This problem is difficult for a single company to tackle.  By joining this group we can help develop the  technology needed to deal with emissions.