Wednesday, November 24, 2010

No. 64: Subsidy for the introduction of low-carbon equipment (November 25, 2010)

The Ministry of Economy, Trade and Industry will establish a new system to provide a subsidy to medium-sized companies that introduce equipment like a boiler capable of reducing carbon dioxide emissions. The subsidy is proportionate to the emissions and scheduled to be 3,000 yen per ton that is about two times as much as the price for the international transaction. A medium-sized company gets the amount equivalent to the reduction of two years when it introduces the equipment. The government wishes to promote the introduction of low-carbon equipment and stimulate domestic economy simultaneously. It projects to create the investment effect of at least 30 billion yen and the reduction of carbon dioxide of about 500,000 tons for two years.

The equipment subject to the subsidy is such low-carbon equipment as city gas boiler and heat pump that has great effect on the reduction of carbon dioxide emissions. The current price of emission trading is about 1,500 yen per ton, and the government plans to set the price at 3,000 yen to stimulate investment will of medium-sized companies. If a company introduces a biomass boiler of about 10 million yen, it can get a subsidy of 1,200,000 yen because carbon dioxide emissions will be reduced by 400 tons in two years. The government will aggregate the emission quotas purchased from medium-sized companies and put them together into large quotas for the sales to power companies and steelmakers.

Many large Japanese companies currently purchase emission quotas from China and East European countries, creating the problem of outflow of capital to foreign countries. Medium-sized companies account for about 13% of Japan’s total emissions, but many of them are hesitate to make an investment on environment because of heavy financial burden. The government wishes to play an interface role between big companies and medium-sized companies.

Tuesday, November 23, 2010

No. 63: Support business for the introduction of photovoltaic generation (November 24, 2010)

Several companies will start the support business for the introduction of photovoltaic generation. Mitsubishi UFJ Lease & Finance will start the lease business for large-scale photovoltaic generation equipment. The company will lease photovoltaic generation equipment with an output of several tens of kilowatts to help manufacturing plants introduce photovoltaic generation equipment. It wishes to increase the sales to several billions of yen in three years.

Taisei Corp. will begin construction support service of large-scale photovoltaic generation to be built in an ex-waste disposal site for local governments. The company is now accumulating know-how for selecting the most suitable construction method responding to the foundation strength and wind velocity in an ex-waste disposal site in Mie Prefecture. Although waste disposal sites usually cannot be diverted to other uses because of the legal constraints even if they are filled up, they are suitable for photovoltaic generation because they are big in area and sun-kissed. It will submit proposals of photovoltaic generation to local governments with emphasis on the cost-benefit performance.

Itochu Techno Solutions will launch the service to estimate electricity generated of photovoltaic generation equipment. The company estimates electricity generated on the basis of such factors as the amount of sunlight of the candidate site and examine the feasibility of construction projects planned by power companies. The service costs several hundreds of thousand yen per project.

Surplus power generated by photovoltaic generation equipment at homes and plants is currently purchased by power companies. The Japanese government examining the possibility of purchasing whole amount of electricity generated with a view to introducing a policy in 2012 at the earliest. The policy is expected to ask power companies to purchase sunlight energy generated for the purpose of generating electricity.

No. 62: A new biofuel comes to the Japanese market in 2013 (November 22, 2010)

A new biofuel jointly developed by BP of Great Britain and DuPont of the U.S. is scheduled to be introduced into the Japanese market in 2013. The new product is not easily mixed with water, and the existing gas stations can sell it without modifying the facilities. The two companies plan to market this product as the vehicle fuel following bioethanol. Called biobutanol, it is mainly made of sugarcane. They will provide the production know-how to companies currently producing bioethanl to expand the market worldwide. Biobutanol will be put on the U.S. market in 2012 under the brand name of Butamax, and subsequently will be put on the Japanese market in 2013.

Biobutanol produces fewer by-products in production than bioethanol, and it can shorten the production process considerably. In addition, it has higher energy density than bioethanol. The former has two thirds of energy amount per volume of gasoline, but the latter has more than 80% of energy amount per volume of gasoline. The two companies will produce butanol in Southeast or in Brazil and ship the finished products by sea. The energy amount consumed in production and transportation is small. It can satisfy the environmental standards required by the Japanese government, and it can be sold at nearly the same price as bioethanol per calorie.

Oil distributors put “bio gasoline” that contains a chemical compound of bioethanol called Ethyl tert-butyl ether (ETBE) on the market in 2007, and increased the number of sales bases to increase the sales volume to date. However, new capital investments are required to expand the production of ETBE. Amid the growing demand for larger production of ETBE, a new type of biofuel is expected to be in greater demand in the future.