October 21, 2005

Japan CO2 emissions inch down, but far from target

TOKYO (Reuters) - Japan made some progress in cutting
greenhouse gases last fiscal year mainly due to increased use
of nuclear power, but the country fell well short of its target
for reducing carbon dioxide (CO2) emissions, the government
said. Japan's Environment Ministry said in a preliminary report
on Friday that the country emitted 1.329 billion tonnes of
gases blamed for global warming in the fiscal year to March 31,
2005, down 0.8 percent from the previous year.

However, the emission volume was 7.4 percent higher than
that in 1990. The U.N. Kyoto Protocol requires Japan to reduce
its CO2 emissions by 6 percent from that year's level by

The government attributed the small decline in CO2
emissions to a recovery in nuclear power plant operation rates,
which averaged 68.9 percent last fiscal year, versus the
previous year's 59.7 percent.

Still, last year's operation rate was well below normal
mainly because of delays to the restarts of nuclear power
generators run by Tokyo Electric Power Co. (TEPCO), Asia's
biggest utility. A Japanese nuclear power plant usually runs at
just above 80 percent of its capacity.

Shutdowns of nuclear power stations have led to increased
use of higher-emission fossil fuel plants.

Nuclear plants owned by TEPCO, which is responsible for
almost one tenth of Japan's CO2 emissions, have been slow to
recover to the normal 80 percent operation level since 2003.

In that year, TEPCO was forced to shut all of its nuclear
units after admitting it had falsified nuclear safety documents
for more than a decade.

In June, TEPCO said it had cut its CO2 emissions by 14
percent in the year to March 2005 to 109.2 million tonnes from
the previous year because the average utilisation rate at its
17 nuclear units had recovered to 61.7 percent from 26.3

The report by the ministry also showed Japan's emissions of
dense greenhouse gases called hydrofluorocarbons (HFCs) fell 27
percent in the year to March from the previous year, while
emissions of perfluorocarbons (PFCs) increased by 9.8 percent.

HFCs are a byproduct of the material HCFC often used in
refrigerators, and PFCs are typically produced in the
semiconductor manufacturing process. Both gases are thousands
of times more potent than CO2.

Such increases in CO2 emissions are a dilemma for
Kyoto-leader Japan. But they give trading houses and financial
institutions opportunities in the emerging CO2 market, which
Barclays Capital has predicted could grow to 40 billion euros a

Japanese trading firms, including top-ranked Mitsubishi
Corp. and Mitsui & Co., as well as utilities such as TEPCO have
invested in overseas projects to secure CO2 credits for their
own use in cutting emissions and for resale to other firms.