Market Overview

The Paris Agreement in 2015 set its long-term goal to limit global warming to well below 2℃, preferably to 1.5℃, compared to pre-industrial levels. In recent years, there have been more ambitious actions to achieve carbon neutrality by 2050 mainly in Europe, which encouraged Japan to announce its goal to attain decarbonized society by 2050 in October 2020.

In line with this, formulation of the "Green Growth Strategy", revisions of the "Plan for Global Warming Countermeasures" as well as “Revised Act on the Promotion of Global Warming Countermeasures" and reform of the "Sixth Strategic Energy Plan" were performed, while the "Green Innovation Fund" (2 trillion yen) was established in NEDO for technology development. Currently, based on these policies, the public and private sectors have been working on the goal of reducing greenhouse gas emissions by 46% by 2030, through the development, social implementation, and investment in innovative energy equipment and technologies.

In order to achieve carbon neutrality and decarbonized society by 2050, hydrogen and CO2-free ammonia are indispensable as supply forms of new secondary energy sources, and CCUS/carbon recycling technologies are necessary to decarbonize them and effectively use the emitted CO2. In addition, renewable energy is essential to supply decarbonized green primary energy sources, and “storage battery” is necessary for efficient use of electricity generated from renewable energy. Against the backdrop of the Green Growth strategy for carbon neutrality, this study organizes and analyzes the energy equipment and system markets in the categories of hydrogen, CO2-free ammonia, CCUS/carbon recycling, renewable energy, and storage batteries.  

Noteworthy Topics

Decarbonized Fuels

Decarbonized fuels are the fuels that are not regarded to emit carbon dioxide. The current decarbonized fuels and their applications developed are those shown in the “Types of Decarbonized Fuels” table. As Japan has been depending on overseas for the conventional fossil fuels, popular use of decarbonized fuels in the country is significant in terms not only of carbon neutrality but also of energy security. In addition, decarbonized fuels are clean fuels in that their emissions do not include sulfur oxides or Sox.

Among decarbonized fuels, synthetic liquid fuel (artificial crude oil), a mixture of carbon dioxide and hydrogen, has a characteristic of having high energy density, which is advantageous for the fuels used for mobility. Synthetic fuel becomes e-fuel when produced from hydrogen derived from renewable energy. In addition, synthetic fuel is highly resilient in that it can be stored for a long time in the existing fuel-supply infrastructure or existing tanks.

Future Outlook

In this research, promising equipment and systems from each category of hydrogen, CO2-free ammonia, CCUS/carbon recycling, renewable energy, and storage batteries have been extracted, and the market size of domestic energy facilities/systems were estimated by adding up the forecasts of the domestic market size respectively in FY2021 (prospect), FY2030 and FY2050. The market size for each fiscal year is not the accumulated value but the amount for energy facilities and systems newly installed or updated in the fiscal year concerned, as well as installation fee.

The entire market size of domestic energy equipment and systems for achieving decarbonized society is forecasted to expand from 725.0 billion yen in FY2021 (prospect) to 2,343.0 billion yen by FY2030 and 3,985.0 billion yen by FY2050. The leading part played in carbon neutral is hydrogen, and the energy equipment and system market for hydrogen category is expected to expand to total 1,740.0 billion yen by FY2050. The energy equipment and system market for CCUS/carbon recycling category, which is the common fundamental technology for decarbonizing hydrogen and ammonia, is expected to expand to 480.0 billion yen by FY2050.   

Research Outline