Japans sustainable future – what comes after Fukushima?

This interview was done in the context of Mr. Tezuka lecture at the European Center for Sustainability Research in February this year.

Japanese steel- and ironwork industry is one of the largest worldwide, at the same time it is one of the most energy-intensive industries. How does, also in view of rising energy prices, the future of your industry look like?

The steelmaking process with a blast furnace uses coal as a reducing agent to make iron from iron ore. Modern Japanese steel works are almost energy self-sufficient; they use heat/byproduct gas from coal to make process heat and electricity. We even sell electricity to public grid from our process. As far as coking coal is available, we have no problem with making steel, even though the process is very much energy intensive. (This is the case with Japanese steel industry. Other region waste such internal energy and purchase oil, gas and electricity from outside.) The recent price hike of coal is a problem, but it may settle down since coal is abundant. Scrap recycling to an electric arc furnace is another solution, but this is mostly the case with developed countries where abandunt scrap is available.

What will be realistic approach to enable growth in Asia in a sustainable way?

Per capita steel consumption in China is about 450kg while that of Japan and Korea are around 600-800kg. India is still less than 100kg. As their economies grow, steel consumption will inevitably grow. The sustainable development is only achievedby the most efficient processes, from which they can produce necessary steel through minimum usage of coal, ore and energy. So the critical issue is: What kind of facilities will they build in the decades to come?

How did Fukushima influenced your industry and climate policy in Japan in general?

Japan is now facing a serious dilemma. A strong anti-nuclear movement prohibits restarting the shut-down nuclear reactors.Now very expensive natural gas and oil, purchased in spot-price deals, are replacing nuclear power. Sufficient power supply, affordable energy cost and CO2 mitigation are mutually incompatible tri-lemma. The Government of Japan is developing options for long-term energy supply; these will be debated by late Spring and the final decision will be made in the Summer.My guess is that we will restart some of the newer reactors to fill 15-20% of power supply (30% before Fukushima Accident, plan to be 50% by 2030), and increase natural gas to fill the shortage. This automatically means a less ambitious Climate Change policy.

Last question: being personally involved in the debate on post-Kyoto climate change policy, what can the world learn from Japans steel- and ironwork industry on it´s reform to a sustainable development?

Steel (and energy) is necessary for sustainable social development. What the world can learn from Japanese industry is themost efficient way of producing steel with the lowest energy intensity and the best material intensity. Though the initial investment may be more costly, this may be the better approach in the longer term, because in this way, material/energy waste can be saved and they can be used for wealth creation.

Hiroyuki Tezuka is General Manager, Climate Change Policy Group at JFE Steel Corporation and the Chairman of Working Group on Global Environment Strategy under Committee on Environment and Safety, KEIDANREN Association. He received his MBA from Massachusetts Institute of Technology and his BE on Applied Physics from The University of Tokyo. Tezuka has spent years in the United States under various capacities including a Visiting Fellow at The Brookings Institution and the Assistant to CEO at National Steel Corporation. He also wrote various books and articles on Climate Policy and Global Management, including “Game-riron Katsuyouhou” (How to use Game theory in business) and “Saiseikanou Energy ha Genpatu wo Daitai Dekiruka?”(Is Renewable Energy able to replace Nuclear Power?) and was a Co-Author of The Hartwell Paper.