Japan looks to batteries to clean up cars

By Chang-Ran Kim and Noriyuki Hirata

TOKYO (Reuters) - Achieving a breakthrough in battery technology is the key to tackling pollution caused by cars and sustaining a rapid growth in car ownership worldwide, an official at the Japanese automakers' lobby said.

An estimated 700 million cars are on the road today and this is expected to double "in no time" given rapid motorization in China, India and other emerging markets, said Minoru Taniguchi, head of the environment department at the Japan Automobile Manufacturers Association.

"The auto industry knows that this pace of motorization is not sustainable without tackling the issues of pollution, recycling, industrial waste -- in addition to global warming," he said in an interview in Tokyo for the Reuters Environment Summit.

While alternative vehicle powertrains such as plug-in hybrids and fuel-cell systems are seen as a possible solution, these require next-generation batteries that have posed the biggest barrier to their proliferation.

"The general view is that without the ability to develop fuel-cell cars or hybrids, it would be difficult for automakers to survive further out. For that, battery technology is critical," he said.

Most automakers are working on developing lithium-ion batteries, believed to be a better fit for rechargeable plug-in cars and hydrogen fuel-cell vehicles than the lower-energy nickel-metal hydride currently used in hybrid cars such as Toyota Motor Corp's (7203.T: Quote, Profile, Research, Stock Buzz) popular Prius.

But even Toyota, a leader in environmentally friendly vehicle technology, has said that it would take some time to prepare lithium-ion batteries for commercial use due to safety and cost issues.

GOVERNMENT AID

Japan's government has pledged 25 billion yen ($215 million) over the next five years for fundamental research into next-generation vehicle batteries, Taniguchi said.

"The government recognizes their importance and is putting a lot of effort into this initiative."

It is also spending 30 billion yen a year on hydrogen-related research, including zero-emission fuel-cell vehicles, to meet its own ecological targets.

Japan has a goal of reducing its 100 percent dependence on fossil fuels for the transport sector to 80 percent by 2030.

Energy security plays a part, as the country has to import all its fossil fuel needs, while it also has an obligation under the Kyoto Protocol to cut the country's overall emissions of greenhouse gases to 5 percent below 1990 levels by 2008-2012.

Taniguchi said the government was keen to see diesel cars take off in Japan since they emit less carbon dioxide than gasoline cars, but he doubted whether consumers would follow. In Europe, every other new car is now fuelled by diesel.

"In Japan, there's less of an advantage in driving a diesel car than in Europe," he said, noting that diesel cars are good for long-distance travel, and need to be driven a lot to make up for the price premium over their gasoline cousins.  Continued...