Japan Turns to Synthetic Fuels To Decarbonise Without Dismantling Existing Infrastructure

As Japan looks for ways to reduce emissions without compromising energy stability, its biggest utilities are turning to synthetic fuels like e-methane and syngas. These lab-made alternatives are being positioned as a bridge between fossil fuel reliance and a cleaner energy future — though critics warn they may do more to delay the transition than accelerate it.

According to a report by Bloomberg, companies like Electric Power Development (J-Power) and Osaka Gas are investing in synthetic fuels to repurpose existing natural gas infrastructure instead of replacing it. At the World Expo in Osaka, Osaka Gas showcased a demonstration plant producing e-methane — created by combining captured carbon dioxide with green hydrogen — calling it the “gas of the future.” The idea, they say, is to decarbonize while preserving pipeline and power plant networks that are already in place.

"E-methane allows us to continue using our existing natural gas systems,” said Yosuke Kuwahara, director of carbon neutrality at Osaka Gas. The company plans to replace 1% of its gas supply with e-methane by 2030. Tokyo Gas has set a similar target, and the Japanese government has even floated a vision of 90% e-methane usage by 2050.

However, concerns are growing. Burning e-methane still releases carbon dioxide — meaning its environmental benefit relies entirely on capturing and storing those emissions, which is technically challenging and costly. Critics like Kiko Network’s Hiromitsu Miyajiri argue that without guaranteed carbon capture, synthetic fuels simply delay emissions rather than eliminate them.

Cost is another major obstacle. Jera, Japan’s largest power generator, piloted co-firing ammonia at a coal plant, cutting emissions by 20%. While the company hopes to eventually switch to green ammonia, even a 50-50 blend of coal and ammonia made from natural gas would double plant operating costs, according to Asia Research & Engagement.

Despite the uncertainty, utilities are pushing ahead. J-Power is developing a gasification system for its Matsushima coal plant to produce syngas, with hydrogen extraction planned by 2028. But again, storing carbon dioxide remains a challenge — particularly given potential leakage risks and public resistance.

“There are major uncertainties about technological and economic feasibility,” analyst Mira Cordier told Bloomberg. Still, companies are betting on innovation to stretch the life of thermal power plants. “We want to utilize them as long as possible,” said Takashi Oikawa of J-Power, “by introducing new technology.”

While supporters argue these fuels are a pragmatic step toward decarbonization, environmental experts caution that investing in them may delay Japan’s transition to renewables. “As a long-term strategy, it’s really risky,” said Michiyo Miyamoto of the Institute for Energy Economics and Financial Analysis.

Japan remains the most fossil fuel-reliant nation in the G7, and its energy future now hinges on whether these lab-made fuels can deliver on both economic and climate promises.

Source: Bloomberg