Exploring synthetic methane for a greener Japan

As an island nation that is home to 125M people and one of the most advanced economies in the world, Japan is keenly aware of the dangers posed by climate change. In response, the country’s government is forging ahead with an ambitious strategy to make Japan carbon neutral by 2050. To ensure it reaches those objectives, the country has also drawn up a series of interim targets.

One of those shorter-term goals is reducing greenhouse gas emissions by 46% by 2030 (compared with 2013 levels). This means introducing radical new ideas across many of the country’s core sectors, including energy.

Today, natural gas is widely used in Japanese cities for heating and cooking. Of course, when natural gas is burned, it produces carbon dioxide, which is far from desirable under the country’s climate change policies.

A consortium of three major Japanese energy and trading companies wanted to explore an emerging technology that could help move towards decarbonising the gas network: methanation. To properly assess the feasibility of the project, the consortium engaged Mott MacDonald to undertake a four month, fast-track study, looking at three possible production countries in the Middle East. As lead advisor, we drew together a multidisciplinary team spread across four time zones and five countries: Japan, the UK, Thailand, Australia and the UAE.

A stepping-stone towards decarbonisation

Methanation is the process of creating synthetic methane by combining carbon dioxide and hydrogen. Synthetic methane is very similar to the main ingredient in natural gas. It can be liquefied and transported just like LNG (liquefied natural gas) and injected into existing gas networks without requiring major structural upgrades to the existing gas distribution networks, unlike other decarbonisation solutions such as injecting a hydrogen blend.

Net zero carbon synthetic methane is created by bonding green hydrogen with carbon dioxide captured from industry

Japan has no significant natural gas resources of its own, so it imports its LNG. Importing and using synthetic methane, which behaves in much the same way, would therefore be fairly straightforward.

Michael Koerber

Technical director

“Japan has no significant natural gas resources of its own, so it imports its LNG,” explains Michael Koerber, principal technical advisor at Mott MacDonald and project manager for this study. “Importing and using synthetic methane, which behaves in much the same way, would therefore be fairly straightforward.”

Japan imports liquid natural gas by ship. Synthetic methane would be imported using existing infrastructure

This study examined synthetic methane production through sourcing CO2 from existing emitters, meaning its role in decarbonisation is likely to be a bridging solution, while other lower-carbon technologies are developed and brought on-stream.

25Mt of synthetic methane production goal by 2050

Our client plans to begin producing and exporting 100,000t of synthetic methane annually from 2030 to Japan, replacing around 1% of the natural gas it supplies. By 2050, however, the government is aiming to inject 90% synthetic methane equating to around 25Mt per year.

With such a staggering scale-up in mind, it was vital that our client had the right data available to select the best partner country for production, and to properly understand the costs involved.

Deploying real-world expertise in green hydrogen

Our client had already selected three countries in the Middle East as potential candidates for hosting production. Michael says: “Our job was to identify where the challenges, cost and risks would lie.”

With abundant solar energy and mature gas export infrastructure, Middle Eastern countries such as Abu Dhabi can potentially transition to become suppliers of zero carbon liquid fuels

The most fundamental step in the methanation process is creating green hydrogen, itself a new technology. Michael has recently worked on four separate projects involving green hydrogen, which made him the ideal candidate to head up this project.

Our job was to identify where the challenges, cost and risks would lie.

Michael Koerber

Technical director

“Producing green hydrogen is not easy,” he says. “It involves using renewable energy to power electrolysers, which split water to produce oxygen and hydrogen. You need to consider which energy sources you will use, in which proportions, and where they are located. You need to select the electrolysis technology. You need to work out where to store the hydrogen when it’s produced. It’s complicated – and producing synthetic methane is an additional order of magnitude more complex.”

Understanding the intricacies and potential pitfalls involved in making green hydrogen is vital to properly assessing whether a country has the necessary infrastructure and regulatory environment to meet the output requirements of this project. Mott MacDonald has been involved in a range of ground-breaking projects in this arena, including NortH2, the largest green hydrogen project in Europe and one of the world’s flagship projects.

“The green hydrogen space is very new,” agrees senior process engineer Farzan Fassihi-Tash, who led the development of the cost model and risk analysis for this project. “Producing green hydrogen is not the same as other forms of hydrogen. It’s a completely different process.”

As a result, Farzan says, many consultants can only offer a top-level view at present, in contrast to our direct experience. “We’ve been involved in many green hydrogen projects already, so our knowledge is first-hand,” Farzan confirms. “We can then marry this expertise with key skills in solar, wind, chemical and process engineering, and evaluating energy costs.”

Adding to this deep well of technical knowhow were our local teams in each of the potential host countries, and our extensive catalogue of work in gas, water and electricity transmission in the region. “We could go much deeper than a typical literature or desktop review,” explains Farzan. “We knew where to look.”

For example, we identified early on that the electrolyser was critically important. “An electrolyser is not a simple product: it’s a big system with lots of parts, all of which have costs,” Farzan says. “Not only is a big upfront investment required to build an electrolyser at this scale, but the conductive electrode ‘stack’ assembly – the most important component in breaking water down into its constituent parts – has a much shorter lifespan than the rest of the system, and can represent half of its total cost. This is something our client needed to know to properly evaluate lifetime costs.”

Harnessing the right skills

Identifying the risks and challenges in this new field required expertise in gas, water and renewables, as well as energy economics and policy.

“For this study, we assumed that new capacity could and would be built in renewables, electrolysers, methanation production and storage, and associated electricity transmission infrastructure,” says Farzan. “We also considered the role of the existing electricity grid in each country.”

2,000 experts in our wider energy business

The first step was drawing on our wider energy business, which includes 2000 experts, of whom 300 are dedicated to renewables projects. In fact, our final project team included people from the UK, the UAE, Thailand and Australia, as well as additional team members in Japan.

Our client told us later that we were the only bidder that tried to properly understand all the terms of reference at the proposal stage.

Michael Koerber

Technical director

Our responsiveness and collaborative approach were put to work in advance of the project even starting. “Our client told us later that we were the only bidder that tried to properly understand all the terms of reference at the proposal stage,” Michael says. “We dug into the requirements, the scope and the outputs, in advance of delivering our proposal. We wanted to understand exactly what our client needed. This makes for a much more efficient and predictable project pathway, with less chance of either our client or our team being surprised along the way. And because we hold a separate proposal budget, none of this cost is passed on to our client.”

Our local knowledge of the potential production countries proved invaluable to another key selection criterion in the study: liquefaction facilities.

“The study assumes using existing liquefaction facilities, as building new plant would be far too expensive and time-consuming,” explains Farzan. “However, these facilities won’t typically have been built with spare capacity in mind. This turned out to be a high priority task and presented a potentially major bottleneck.”

First-of-its-kind modelling

“Levelised cost has been around as a concept for a long time,” says Fendi Lin, energy systems engineer at Mott MacDonald. “It’s often used for electricity. However, there isn’t something off-the-shelf that looks at an entire value chain, with intermittent levelised costs in-between which influence each other through the chain, and then affect then the final commodity. That’s very new.”

A levelised cost model calculates the lifetime costs of building and operating a power plant, and sets those against the energy that will be produced. It’s a way of simplifying analysis by combining fixed and variable costs into one measurement. 

“Over the past three years, we’ve been developing strategies for identifying the least possible cost, using model building,” Fendi says. “And we’ve been doing a lot with hydrogen and other alternative fuels. We include many calculations and assumptions, such as build costs and operating costs. In the result sheet, we’ll be able to arrive at a cost per mass or cost per unit, or similar. This helps to inform the kind of strategic decisions our clients need to make at the beginning of a project.”

One recent project in this sector that Fendi and her team were engaged on was exploring green hydrogen in Paraguay, which included assessing ammonia, LNG and methanol.

Using existing infrastructure storage and supply infrastructure reduces the levelised cost of supplying synthetic methane

Fendi goes on: “With this advanced model, we combined different avenues that have traditionally been very separate – producing methane, producing electricity, producing green hydrogen. Combining those is very, very new. It introduced a lot of challenges in how the variables interact.”

The model built by our team also includes early optimisation elements, which shifts some key decision-making to the model itself. Fendi explains: “For example: what was the best size of electrolyser compared to size of renewables? If you underuse the electrolyser, you’ve wasted resources building it. If you overuse it, then you’ve not built it big enough and might have to construct another.”

More detailed optimisation would be conducted later on to support investment decisions or detail design, but incorporating some of these elements early will help our client in their decision-making in this new field. This is especially so given that there is very little data available anywhere in the world on methanation production, and much of what is out there is theoretical.

“We were also able to quantify a lot of options that we typically would not expect to be possible at this stage,” says Farzan. In fact, “we considered many more details – with both large and small impacts – than is common for this type of study, including some 20 to 30 toggles that could be changed. We did this to give much more confidence to our client at this early, high-level stage.”

By building it in the widely available Microsoft Excel programme, we were able to fully share the model with our client. “This allowed our team and our client to collaborate closely,” says Michael. “We had many productive discussions, using the model and its data as our basis.”

2030 - production is scheduled to start

Our study concluded by recommending which of the three potential host countries would best meet our client’s needs for this ambitious project. “Our client is planning to make the final investment decision for the project in 2025 and start production by 2030,” says Michael.

“No one to my knowledge has done this before in this sector,” concludes Fendi. “The whole concept is novel, which is really cool!”

Our first-of-its-kind levelised cost model is proving to be an essential tool in helping our client to assess whether, and how and where, to move forwards with what would be a first-of-its-kind energy transition.

Finding her place in the world

“I always wanted to be an engineer,” says Fendi Lin, an energy systems engineer at Mott MacDonald. “Coming from South Africa, where you see a lot of poverty, I thought it would be fulfilling to try to make a difference in people’s lives.”

Engineering has historically struggled to attract women, but Fendi was not put off. “My parents instilled in me the belief I could do anything I could set my mind to, whatever I was interested in,” she says. “It was obvious that engineering was a male-dominated field so that was in the back of my head. It was a little bit intimidating. But I made the conscious decision to ignore that and not let external and societal factors influence my decisions. What’s more important is to look at what I can learn from leaders, whether they are male or female.”

Fendi decided to study process engineering at university, before going on to complete a master’s degree in engineering for international development at UCL in the UK. “Process engineering opens up a lot of options,” she says. Her master’s degree included working with PLEXOS modelling, energy optimisation planning software that is increasingly being used by people who are trying to answer questions around net zero.

At Mott MacDonald, Fendi has found a place where she can combine her love of engineering with opportunities to contribute to better social outcomes for people across the world. “Working at Mott MacDonald is amazing,” she says “Here, you’re surrounded by people who are so supportive of your emotional wellbeing. They push you to be your best but they’re also there for you every step of the way. I’ve got friends who have gone to work for other organisations, and they have not had the same experiences. It helps, too, that the wider business lead for my unit is Fay Lelliott, a woman. I feel very lucky.”