Greenhouse Gas Emissions and Economic Analysis of e-methane in Japan and China

Abstract

E-methane is considered the most important way to decarbonize the natural gas system in Japan. The advantage of e-methane is that it can use existing natural gas infrastructure and end-use facilities. There is a potential for China to produce e-methane and export it to Japan in the future. Therefore, the greenhouse gas (GHG) emissions and economic analysis of e-methane should be studied in both countries. The GHG emissions of e-methane are 0.927 kg-CO2e per kg e-methane if all processes are powered by solar energy. The largest portion of GHG emissions from e-methane comes from hydrogen, which comprises more than 85% if solar energy is used for all processes. When solar energy is used to produce hydrogen, but grid electricity is used for other processes, the GHG emissions exceed the Europe Union’s Renewable Liquid and Gaseous Transport Fuels of Non-Biological Origin (RFNBO) requirements, whether in Japan or in China. The levelized cost of e-methane produced in Japan is much higher than in China. The levelized cost of e-methane in Japan is 4489 USD/ton in the base case (2021), 2842 USD/ton in the 2030 case, and 1674 USD/ton in the 2050 case. In China, it is 2450 USD/ton, 1505 USD/ton, and 1082 USD/ton, respectively. The cost of hydrogen is the largest contributor to the levelized cost of e-methane, accounting for more than 60% in all cases. For China and Japan to cooperate in the value chain of e-methane, a carbon accounting mechanism and a carbon pricing mechanism mutually recognized by both Japan and China are necessary.