Japan aims to boost ammonia fuel demand to 3 mln tonnes a year by 2030

TOKYO, Feb 8 (Reuters) - Japan has set a target to grow the nation’s ammonia fuel demand to 3 million tonnes a year by 2030 from zero now and to create a new supply chain of the fuel in a bid to cut CO2 emissions and combat climate change, its industry ministry said on Monday.

The move comes as part of the government’s push to promote development of clean energy under a green growth strategy unveiled last December following Prime Minister Yoshihide Suga’s pledge to slash carbon emissions to zero on a net basis by 2050.

Ammonia, which does not emit carbon dioxide when burned, is seen as an effective future energy source along with hydrogen.

A panel convened by the industry ministry to discuss Japan’s ammonia fuel strategy issued an interim report on Monday laying out a roadmap for the use of the substance as a fuel for power generation, shipping and industrial furnaces.

Currently, Japan uses 1.08 million tonnes of ammonia only for fertiliser and industrial materials, 80% of which is produced locally.

But with 500,000 tonnes of ammonia fuel required to generate power at a 1 gigawatt (GW) power plant, using 20% ammonia blended with coal, a separate and larger international supply chain will be needed, the report said.

Japan also wants to develop an ammonia-powered ship by 2028.

It is aiming to cut the cost of ammonia to 15-20 yen ($0.14-$0.19) per normal cubic meter (Nm3) by 2030 from 20-25 yen now, and to increase annual ammonia fuel demand in Japan to 30 million tonnes by 2050.

In October, Japan’s biggest power generator JERA said it plans to start a pilot programme to use ammonia as a fuel with coal in mixed combustion at a power station by 2030, and to achieve 20% use of ammonia at its coal-fired power plants by 2035.

$1 = 105.6200 yen Reporting by Yuka Obayashi; Editing by Jan Harvey