ABeam Consulting co-sponsored the NIKKEI Digital Forum in Asia, an event hosted by Nikkei Inc. and Nikkei Business Publications, Inc. in Bangkok, Thailand, on Tuesday, October 1.
Mr. Keiji Horie, Managing Director of ABeam Thailand, spoke on “Accelerating Thailand Decarbonization with Japanese Advanced Technology and Philosophy” at a special session.
Outline of this event: Here
First, in the U.S., the passage of the “Inflation Control Act” and its promotion will actively create a market related to GX, which is said to have a significant positive impact on the effectiveness of GHG reductions in 2030.
In Europe, the Carbon Border Adjustment Mechanism (CBAM), the world's first border carbon tax, will be fully applied from 2026. As an initial step, certain products such as cement and aluminum are expected to be covered, but the scope of application is expected to be further expanded in the future.
Meanwhile, in China and India, policies are also being developed to balance their own economic growth with decarbonization.
In China, in particular, the government and business sectors are working together to promote decarbonization, with the country accounting for more than 70% of global solar cell shipments in FY2022. In this context, both economic growth and decarbonization in Thailand and Japan are in a state of flux.
We would like to reiterate here the situation in Thailand and Japan.
First, in terms of land area, Japan and Thailand are characterized by the size of their exclusive economic zones and the size of their agricultural land areas, respectively.
Next, from a renewable energy perspective, Japan has the highest installed solar power capacity per unit of land area of any major country, but new installations are slowing.
On the other hand, Thailand, with its vast agricultural land, has high potential for solar energy, but the rainy season makes it difficult in terms of constant solar power generation throughout the year. Thus, the potential for renewable energy varies greatly depending on the geographical and land characteristics of each country.
Perovskite solar cells, a focus of Japan, may provide a solution to the challenges of solar power generation during the rainy season.
Perovskite solar cells are solar cells manufactured from materials with a perovskite structure, and have conversion efficiency performance approaching that of conventional silicon-based solar cells and compound solar cells. Characterized by their light weight and flexibility, they can be installed on building walls, where silicon solar cells are difficult to install, and on roofs with low load-bearing capacity. Because they can generate electricity efficiently even on cloudy days and have competitive manufacturing costs, they are attracting attention as one solution to the problems of photovoltaic power generation.
Thus, there will be room for Japan's innovative cutting-edge technologies to contribute to solving various issues that are barriers to the promotion of GX.
First, let us look at the interim carbon neutrality targets for both Thailand and Japan and the status of their achievement. Japan has set 2030 as an interim target, and has set a target of 36~38% for the share of renewable energy in its energy mix at that time, double the share from 2019.
Turning to Thailand, most of the renewable energy is biomass.
This is very distinctive, as solar and wind power account for a large percentage in many cases worldwide (Biomass in Japan is at the level of a few percent). This is how Thailand is blessed with agricultural resources, and its growth has been remarkable when compared to that of the year 2000.
In Thailand, there is still plenty of room for solar growth through the use of the advanced technologies mentioned earlier.
In light of this situation, Japan's Ministry of Economy, Trade and Industry (METI) has taken the lead in formulating the “Green Growth Strategy for Carbon Neutrality in 2050,” which defines 14 areas where growth is expected. In addition, a 20 trillion yen (US$140 billion) GX Promotion Act has been formulated to accelerate innovation in GX areas.
According to the “Energy Policy Toward Carbon Neutrality in Thailand” published by the Thai Ministry of Energy, a framework for a national energy plan toward carbon neutrality for the years 2065~2070 is presented.
In this context, the goal is to achieve a renewable energy supply of at least 50%, also using power storage systems, or so-called storage batteries. It also aims to achieve “Thailand 4.0” through the “BCG Economic Model” of bio-circular green from 2018 onward.
This economic model is being considered for biomass power generation, which is a characteristic of Thailand, as well as the application of biotechnology to agricultural crops to create high value-added products such as biofuels, bioplastics, and bio-chemical products.
Japan has a great deal to learn about decarbonization initiatives that leverage its own strengths with economic growth, and could also be a business opportunity for the private sector.
AZEC is a framework for cooperation toward carbon neutrality in the region, involving 11 partner countries.
The structure is designed to provide the Japanese government with full support from three angles: financial, technological, and capacity-building.
In December 2023, AZEC leaders issued a joint statement, and a second ministerial meeting was held in Indonesia in August 2024. Here, in-depth discussions were held and three AZEC initiatives were launched.
The first is the promotion of “Zero-Emission Electricity”: while COP28 agreed to triple the amount of renewable energy and double energy efficiency by 2030, there were conflicts on several topics related to fossil fuels, such as coal-fired power plants. In addition to Carbon dioxide Capture and Storage (CCS) in AZEC partner countries, which are highly dependent on fossil fuels, “Strengthening the Power Grid” will be necessary for the shift to renewable energy, and cooperation in these areas is considered important.
The second is “creating a market for sustainable fuels. The expected increase in vehicles, aviation, and ships in AZEC partner countries, including Thailand, will make the transition away from fossil fuels in the transportation sector a necessity. The initiative aims to secure sustainable fuels from resources including biomass with a view to establishing a supply network for sustainable fuels in the future, especially in Asia.
This is an area where Thailand's biomass potential can be utilized.
The third is the “Building Next Generation Industries Initiative”. In Asia, the manufacturing sector accounts for a high percentage of added value in GDP, and it will be essential to green the entire supply chain in the future. However, the scale of investment available to individual companies is limited, so methods to efficiently decarbonize the entire supply chain, such as the creation of carbon neutral industrial parks, for example, are being discussed.
ABeam Consulting has established GX Concierge, a joint venture with Sumitomo Corporation, to support the promotion of GX, which is difficult for a single company to solve on its own. The company provides a wide range of services, from conceptualization to actual solutions, for the various agendas that arise in promoting GX, classifying them into three categories: the energy supply side, the consumer side, and the creation of new models for renewable energy supply and demand.
Most recently, in collaboration with AMEICC (ASEAN-Japan Economic and Industrial Cooperation Committee), the company has been providing training programs for corporate staff and matching them with financial institutions and solution vendors in order to promote GX and build sustainable SCM (supply chain management) in the Mekong region. The company provides training programs for corporate staff, as well as matchmaking with financial institutions and solution vendors.
In the Southeast Asian region, investments in renewable energy facilities and power transmission and distribution facilities are expected to accelerate, creating a variety of energy markets. As countries that share the same challenge of achieving decarbonization, including the transition from fossil fuels, we hope that Japan's case studies and technologies will be utilized in this effort.
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