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15 May 2024
JERA Co. Inc. (JERA) announced the new growth strategy that integrates strategic business pillars and organizational edge, marking a realistic pathway towards 2035, and ultimately its 2050 zero emission goals. Amidst complex and rapidly changing global energy dynamics, JERA's new growth strategy ensures the agility and efficiency further solidifying its leadership in solving energy trilemma, achieving energy sustainability, affordability, and stability all at once.
Leveraging its world-class business acumen and recent evolutionary strides, JERA strategically emphasizes three key business pillars: LNG, renewables, and hydrogen & ammonia—a sector pioneered by JERA. These three pillars bring complementary synergies instrumental in driving steady and reliable progress toward decarbonization. They can be dynamically tailored to deliver optimal solutions that align with each customer, region or country's unique geographic and economic characteristics.
JERA has set the following goals corresponding to the three business pillars by fiscal year 2035:
• LNG: JERA targets more than 35 million tons of transaction volume as one of the world's largest LNG integrated value chain players.
• Renewables: JERA aims at 20 GW (gigawatts) of capacity becoming one of the industry leading renewables players.
• Hydrogen & Ammonia: JERA targets approximately 7 million tons of handling volume and aims to pioneer the global hydrogen & ammonia value chain.
Based on its business strengths, JERA has organized its operations into three key areas: business development, optimization, and O&M. This structure is bolstered by top-tier experts from both Japan and around the globe, who collaborate extensively with business groups. Such a setup ensures the agility and scalability required for effective cross-regional collaborations.
The unique integration of JERA's strategic business pillars with robust organizational support sets the company apart as a global leader in the energy sector, unmatched in its capability to deliver energy transition goals together with its partners worldwide.
Yukio Kani, Global CEO and Chair, said, “At JERA, we are not just adapting to the evolving global energy landscape; we are actively setting the pace. With our new growth strategy, we are positioning ourselves at the forefront of the energy transition. Our vision will be made possible through strategic collaborations with our global partners. Built on mutual goals and a culture of diversity and openness, we and our partners will join forces to embark on a journey to transform the energy sector"
In addition, JERA also announced its financial strategy and key financial targets. JERA aims to reach a consolidated net profit of 350 billion JPY and an EBITDA of 700 billion JPY. It plans a total cash flow investment of 5 trillion JPY (1-2 trillion JPY for each business pillar of LNG, renewables, and hydrogen & ammonia) with a built-in flexibility to make allocation changes between the three business areas if deemed suitable in case of external changes. Target levels for capital efficiency (ROIC-WACC spread) and financial soundness (Net DER and Net Debt/EBITDA) are set in line with or exceeding global peers.
Hisahide Okuda, President, Director, CEO, and COO, added, "With strong emphasis on capital market valuation comparing with global peers, JERA has set a clear financial targets for profitability, capital efficiency and financial reliability to be achieved by 2035. JERA will actively allocate total capital investment of 5 trillion yen with flexibly adjusting investment balance over three business areas in response to market trends, technological innovations and global policy shifts"
JERA is also progressing toward creating zero emissions in thermal power generation and has set ambitious but realistic environmental targets. JERA is committed to reduce CO2 emissions intensity by 20% as of 2030, total CO2 emissions by 60% as of FY2035 before achieving zero CO2 emissions from its domestic and overseas operations as of 2050. To achieve these targets, JERA will phase out inefficient coal-fired thermal power by FY2030. JERA also intends to convert 100% of the other coal-fired power generation to ammonia by 2040's, and eliminate coal completely. JERA' effort is not limited to CO2 only. JERA has succeeded in reducing NOx and SOx emissions to the lowest level globally and aims to deliver further reductions through adoption of new technologies such as low-NOx burners.
About JERA Co., Inc.
Established in 2015, JERA is an equal joint venture of two major Japanese electric power companies, TEPCO Fuel & Power Incorporated and Chubu Electric Power Company and produces about 30% of all electricity in Japan. JERA is an energy company with global reach that has strength in the entire energy supply chain, from participation in LNG upstream projects and fuel procurement, through fuel transportation to power generation. JERA, which stands for Japan's Energy for a New Era, will take on the challenge of achieving net zero CO2 emissions from its domestic and overseas businesses by 2050 and is supporting an energy transition in an environmentally and socially responsible manner. For more details: https://www.jera.co.jp/en/
JERA Co. Inc. press release
