China’s Solar, Battery Dominance Impacting Japan’s Energy Shift

Japan Urged to Accelerate Clean Energy Transition

As Japan revises its basic energy plan, there’s increasing demand to enhance the role of renewable energy sources like wind and solar power to expedite a clean energy transition. The present policy is rated “insufficient” by nonprofit Climate Action Tracker in terms of realizing emission reductions necessary to restrict global warming to 1.5 degrees Celsius.

Mika Ohbayashi, director of Tokyo-based Renewable Energy Institute (REI), believes there is a need for more incentives for solar panels on residential and commercial roofs. She also advocates for the expansion of other renewables, including onshore and offshore wind, small and medium-sized hydropower, bioenergy, and geothermal.

Wind and Solar Vs Hydrogen and Natural Gas

Environmental and energy nonprofits in Japan, like REI, Kiko Network, and Climate Integrate, argue that the plentiful and low-cost renewable energy sources, solar and wind, should be given priority over Japan’s current focus on hydrogen and liquefied natural gas, and unproven technologies such as ammonia co-firing with coal and carbon capture storage (CCS).

However, China’s dominance in key components such as lithium and cobalt, used in batteries, solar panels, and other materials like silicon wafers and aluminum, complicates the energy transition due to ethical concerns related to forced labor.

Seaver Wang, co-director of the climate and energy team at the U.S.-based Breakthrough Institute, questions the real cost of these technologies citing links between the solar supply chain and the forced labor of Uyghurs in China’s Xinjiang region.

Obstacles and Alternatives

Building a domestic supply chain as an ethical alternative to China would be expensive and time-consuming, potentially undermining the fight against climate change. Collaboration with US and European partners to build an alternative to China might allow for innovations in new technologies like floating offshore wind, but would need a significant policy shift.

Japan is looking to promote its own industry to reduce dependence on China, focusing on CCS and hydrogen, and emerging technologies like perovskite solar and floating offshore wind.

China’s Clean Tech Dominance

China has used industrial policy, including subsidies and other incentives, to become a key player in many global supply chains. This has allowed China to produce solar panels and batteries at costs significantly lower than competitors, causing some Japanese and European companies to either go bankrupt or shift their manufacturing to China.

Climate groups commend China’s rapid expansion of solar, wind, and EVs, but there are major human rights and sustainability concerns linked to Chinese production of solar panels, batteries, EVs, and other clean technologies.

China’s Human Rights Violations

Reports indicate that the Uyghur people have faced forced labor in Chinese production camps. The U.S. and other countries have described China’s actions in Xinjiang as a genocidal campaign. Xinjiang is responsible for a large share of global silicon production and other crucial cleantech components.

There are also issues in countries like Indonesia and the Democratic Republic of the Congo, where Chinese companies processing nickel, cobalt, or lithium have been linked to human rights and labor abuses at factories and mines.

Looking for Alternatives to China

Under Prime Minister Fumio Kishida, Japan has been promoting alternative supply chains utilizing technologies like CCS, hydrogen, LNG, ammonia co-firing with coal, and biomass.

Unlike Japan, the U.S. has been using incentives to promote domestic manufacturing of solar panels and batteries, while increasing tariffs on Chinese solar panels and EVs.

Japan has voluntary supply chain due diligence requirements, which Teppei Kasai, a program officer at Human Rights Watch’s Japan office, would like to see strengthened and made mandatory.

Learning from Japan’s Rare Earths Model

The U.S. and Europe are looking at Japan’s successful reduction of reliance on China for rare earth minerals, which are crucial for clean technologies. There’s potential for G7 countries to expand partnerships and work together to counter Chinese dominance of important supply chains.

Despite the challenges, Japan sees opportunities in offshore wind and perovskite solar as a geopolitical strategy to reduce dependence on China.