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Will Australia’s ‘hydrogen road’ to Japan cut emissions?

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For more than a century the sprawling lignite mines in Australia’s Latrobe Valley provided the fuel that powered the southern state of Victoria. At its peak five coal-fired power plants burnt the soft, brown sedimentary rock — one of the dirtiest sources of energy — casting vast plumes of toxic smoke into the atmosphere that accounted for more than half of the state’s total greenhouse gas emissions.

Now, with global warming focusing minds in a country where climate policy has brought down governments, the first phase of an energy transition is taking place following the closure of two coal plants and a lignite mine in the valley, which is about 120km east of Melbourne. A Japanese-Australian consortium is set to begin producing hydrogen from brown coal in a A$500m ($370m) pilot project seen by its architects as the first step in creating one of the world’s first zero emission energy supply chains.

The brown coal fuelled Hazelwood power station, which sits in Australia’s Latrobe Valley, is the oldest in Victoria © Hamish Blair/Getty/Getty

Kawasaki Heavy Industries, J-Power and Shell Japan have joined Australia’s AGL Energy and several international partners to produce, liquefy and ship hydrogen to Japan. They intend to burn some of the 5bn tonnes of lignite in the valley, enough to power Victoria for more than 500 years, to produce hydrogen. Eventually, they intend to capture the carbon generated by the process and inject it into undersea basins in the nearby Bass Strait. For now, however, their goal is to prove the viability of the supply chain and the emissions will continue to be released into the atmosphere.

The project, which is co-funded by both governments, includes the development of the world’s first liquid hydrogen transport ship. Tokyo hopes it can provide Japan, a nation that imports 90 per cent of its energy, a viable path towards decarbonisation. With investors such as BlackRock calling for a swifter transition, Canberra aims to use it to diversify its fossil fuel dependent economy, which generates A$70bn a year from exporting thermal coal and LNG to Asia.

For decades hydrogen — the lightest and most abundant element in the universe — has been hailed as a revolutionary, clean source of energy capable of supplying fuel for cars, heat for homes and storing electricity. But it has failed to live up to the hype for several reasons: the high costs of production compared with burning fossil fuels; challenges in transporting the fuel; lack of demand; and the inability of hydrogen fuel cells to compete with internal combustion engines or lithium-ion batteries in electric vehicles.

The companies leading the Latrobe project believe it can become a catalyst towards establishing a global hydrogen economy, which is forecast to be worth up to $11tn by 2050, according to Bank of America. The Latrobe plant is just one of several hydrogen megaprojects in the planning or development phase in nations ranging from Saudi Arabia to China and Spain.

“Clean hydrogen presents a massive commercial opportunity,” says Jeremy Stone, a director of the Australian subsidiary of J-Power. “It is also one of the critical technologies required to decarbonise the global energy system, particularly in energy constrained nations such as Japan.

“We simply can’t wait to deal with climate change,” he adds, “which is why this collaborative project in Latrobe is so important. We need to get going now with all forms of clean hydrogen.” 

Hydrogen from brown coal process graphic

‘Mind-bogglingly stupid’

Yet, the scepticism remains. Tesla co-founder Elon Musk has dismissed hydrogen fuel cells as “mind-bogglingly stupid”, saying it is inefficient to use them in a car compared with charging a lithium-ion battery directly from a solar panel. Other critics ask whether producing hydrogen from fossil fuels can ever be made cost effective or clean given that the industry has so far failed to prove the commercial case for carbon capture and storage.

Nevertheless, a growing number of scientists and investors believe the world is on the cusp of a hydrogen revolution due to technological advances reducing the costs of making, storing and deploying it. They hope the plummeting costs of solar and wind energy could finally make the production of emissions-free “green hydrogen” — made by using renewable energy to split water into hydrogen and oxygen — commercially viable.

The Paris agreement on climate change is driving investment in hydrogen, as nations prepare to meet their commitments to cut greenhouse gas emissions. BP and Danish wind energy group Orsted announced plans for a green hydrogen project in Germany in November and Airbus recently unveiled plans for hydrogen powered passenger planes. In October Japan and South Korea pledged to become net zero emission economies by 2050. China has set a similar target for 2060.

The hydrogen energy supply chain project’s Hastings site in Victoria will liquefy, store and load the gas on to a ship for export © HESC

To meet these goals nations will need to deploy massive amounts of solar, wind and hydro power to replace fossil fuels, which still account for four-fifths of global energy production. Renewables already play a vital role in the electricity sector but their intermittent nature is forcing industry to consider flexible solutions involving hydrogen to store, dispatch and ship power when required.

“Electricity is magical, in terms of its versatility and power. But there are some applications where it’s just not the most convenient way of delivering energy to the end user,” says Alan Finkel, Australia’s chief scientist and author of its hydrogen strategy.

He says long distance transportation by truck, train, ship or air and heating buildings — by converting existing pipelines in cities from gas to hydrogen — are key uses for the fuel. Its energy storage potential is vital for Australia, which can ship hydrogen and its derivatives, such as ammonia, to overseas markets to substitute its coal and gas exports, he adds.

“The most marvellous application of hydrogen of all is the ability for us to continue what we’ve been doing for hundreds of years,” he says, “ship energy from a continent where it is plentiful to the continents where it is in short supply.”

Bar chart of Share of energy mix, current (%) showing Japan's reliance on fossil fuels among highest in the world

Japanese demand

The potential market for Australian hydrogen can be found at the base of Tokyo Tower, where the industrial gases company Iwatani has built a filling station for fuel cell cars. It is one of 135 such stations spread across Japan — symbolic of the decades-long bet the country has placed on hydrogen.

For reasons of energy security and industrial strategy, Japan has long regarded hydrogen as the most attractive potential alternative to fossil fuels, and it has an ambitious strategy to build up use of the fuel. Its plans involve mixing hydrogen with natural gas to burn in power stations and having 800,000 hydrogen vehicles on the road by 2030 — a major advance on the 3,757 sold in Japan to the end of 2019.

Yoshihide Suga, Japan’s prime minister, has set 2050 as the deadline for the country to be carbon neutral © Kazuhiro Nogi/AFP via Getty

Yoshihide Suga, the prime minister, has stressed the importance of hydrogen to hitting the country’s 2050 emissions target, describing it as “a vital key to clean energy,” in October, and urging “revolutionary innovation to build up a low-cost, high-volume hydrogen supply chain”.

Japanese demand for hydrogen reflects its almost total lack of domestic hydrocarbons. Its heavy reliance on oil imports from the Middle East is a source of constant worry to industry and national security planners. Coal from Australia, by contrast, is regarded as one of the nation’s most secure energy supplies.

Column chart of Share of energy mix* (%) showing Japan plans to significantly reduce its fossil fuel use

To try to escape from its dependence on fossil fuel imports, Japan invested heavily in nuclear power, but the Fukushima disaster in 2011 has all but shut the industry down. That leaves renewables. However, Japan’s densely populated, mountainous islands are a difficult place to build large solar farms, while its steep continental slope gives little scope for offshore wind.

The country’s all-important car industry has increased its investment in batteries, following the success of Tesla, but it too is still focused on hydrogen. Toyota is launching the second generation of its Mirai fuel cell sedan, which is aiming for a 30 per cent increase in driving range over the original model’s 312 miles, while Honda offers a fuel cell version of its Clarity vehicle. For the delayed Tokyo Olympics in 2021, Japan intends to have fuel cell buses to shuttle visitors around.

“Electric vehicles have certainly been ahead of hydrogen ones in terms of development and adoption but I think hydrogen is catching up due to advances in high pressure hydrogen gas storage fuel tanks, fuel cell technology and hydrogen production from renewable energy,” says John Andrews, a professor at RMIT University in Melbourne.

“Elon Musk has been rather one-eyed on EVs,” he adds. “Hydrogen vehicles are likely to play a complimentary role in the future because they are particularly useful over long distances and for speedier refuelling.”

BP and Danish wind energy group Orsted have plans for a green hydrogen project at Germany’s Lingen Refinery © Kilian Westkamp

The ‘hydrogen road’

The production of hydrogen in Latrobe would be the latest milestone in a decade-long mission for Kawasaki Heavy Industries, the company leading the Australia-Japan supply chain project. In December it launched the world’s first hydrogen carrier, which will ship the fuel the 9,000km from eastern Australia to Kobe, Japan. A gas turbine power plant to be fuelled entirely by hydrogen has already been installed in the Japanese city and will provide heat and power to nearby municipal buildings.

“Kawasaki technology will link production sites to energy consumers, and in so doing give birth to the Hydrogen Road,” says Motohiko Nishimura, head of Kawasaki Heavy’s hydrogen development centre.

He forecasts that supply chains will progressively spread across Asia, much like LNG was imported by Japan, South Korea, China and Taiwan from the 1970s to provide energy. Kawasaki chose Victoria’s lignite deposits as a potential source of energy to produce hydrogen because it offers a cheap and plentiful supply based in a politically stable nation with a long history of shipping energy to Japan, says Mr Nishimura.

Yet, there are plenty of sceptical Japanese experts. “You have to produce the hydrogen, liquefy it, ship it, reconvert it and then use it,” says Hiroshi Kubota, professor emeritus at the Tokyo Institute of Technology. “It’s just a massive waste. This is a kind of national project but I don’t think it is practical or economic for Japan at all.”

Environmental groups have also raised objections to the Latrobe project over its use of brown coal. “The time for digging up dirty, brown coal is over,” says Cam Walker, an activist with Friends of the Earth in Victoria. “We support the development of green hydrogen produced from renewables.”

Mr Nishimura dismisses such criticism. “There is no time to waste in building the skills, infrastructure and market needed to ensure nations can reach their zero emissions goals,” he says. And if the cost of making hydrogen through renewables continues to fall the industry can move away from coal-based hydrogen production. “It will depend on the market,” he adds.

Kawasaki Heavy Industries launched the world’s first hydrogen carrier last year. It will ship the fuel for the Australia-Japan supply chain project © Kyodo Photo via Newscom/Alamy Live News

‘Green’ energy

About 70m tonnes of hydrogen are already produced every year, mainly for use in heavy industries, such as oil refining, ammonia and steel production. In the vast majority of cases it is produced through the burning of fossil fuels and the emissions generated are not captured and stored.

These traditional carbon intensive methods can produce so called “grey” hydrogen at costs of about $1 per kg, which compares with costs of $3-7.5/kg for “green” hydrogen, which is made through the use of renewable energy, according to BofA. But costs of renewable energy and the electrolysers used to generate hydrogen from water are falling rapidly.

“We think we’re reaching an inflection point where green hydrogen could supply our energy needs, fuel our cars, heat our homes and be used in industries that have no economically viable alternative to fossil fuels,” says Haim Israel, global head of thematic investment strategy at BofA. 

“We have a long road ahead of us, but this is an energy revolution that’s happening because it must . . . Together with renewable electricity, green hydrogen gives us a shot at attaining a zero carbon-emission global economy by 2050,” says Mr Israel. 

This transition to a solar, wind and green hydrogen economy poses a challenge for economies reliant on exports of fossil fuels, which are now exploring ways to tap into the emerging sector. 

In July a consortium led by Air Products, ACWA Power and Neom announced plans for a $5bn green renewables and hydrogen plant in Saudi Arabia, which aims to begin shipping ammonia to global markets by 2025. Russia recently revealed plans to export 2m tonnes of hydrogen by 2035, in part motivated by concerns that the EU and other customers are embracing zero emissions policies.

Australia’s ruling Liberal party — a staunch supporter of coal and gas — has already begun preparing for an energy transition. In October Canberra awarded “major project” status to a $36bn renewable energy project, which aims to build the world’s biggest power station and export green hydrogen and ammonia from a remote desert in the outback to Asia.

Airbus has developed a concept aircraft as part of its plans for hydrogen powered passenger planes © Airbus

Called the Asian Renewable Energy Hub, it is backed by Vestas, the wind turbine group, Intercontinental Energy, Macquarie Group and CWP Renewables. It involves building a massive solar and wind farm on a 6,500 sq km site in the Pilbara, a region in Western Australia better known as a source of LNG.

As well as exporting energy, the project would aim to supply iron ore miners and LNG producers in the Pilbara. Hydrogen could also attract new businesses to the region, including the production of “green steel”, says Mr Hewitt.

While analysts question whether hydrogen could reinvigorate Australia’s steel industry — which faces tough competition from Asian rivals — many feel the pivot towards a hydrogen economy is beginning to take place due to the falling costs of renewable energy, electrolysers and fuel cell technology.

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Bernstein, an investment group, forecasts the cost of producing green hydrogen could fall to less than $2/kg by 2030, which is equivalent to $1/gallon for petrol. Fuel cell costs should decline by 80 per cent over the same period to $30/kW, as the hydrogen industry scales up. By the mid-2020s heavy goods vehicles powered by hydrogen fuel cells could be more competitive than diesel trucks and by 2030 fuel cell cars could rival electric vehicles in terms of the total cost of ownership.

“The pivot toward hydrogen is starting to make compelling business sense,” says Neil Beveridge, analyst at Bernstein. “Those that embrace the energy transition may survive and even thrive, while those that do not risk being confined to history.”



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Analysis

Huawei’s fall hits growth of Sony’s chip business

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Growth of Sony Group’s semiconductor business has slowed, reflecting a plunge in shipments of image sensors for smartphones to Huawei Technologies as a result of the US-China trade war.

Although Sony has avoided a fall in the volume of shipments thanks to orders from other Chinese smartphone makers, the recovery of earnings appears likely to be delayed until the fiscal year of April 2022 to March 2023 because of weakened demand for sensors for high-end smartphones.

As Samsung Electronics of South Korea, which is strong in processing sensors for midrange smartphones, catches up, Sony is halfway towards recapturing the smartphone market.

“We cannot achieve an earnings recovery in the year through March 2022,” said Terushi Shimizu, president and CEO of Sony Semiconductor Solutions, at a press briefing on June 3.

This article is from Nikkei Asia, a global publication with a uniquely Asian perspective on politics, the economy, business and international affairs. Our own correspondents and outside commentators from around the world share their views on Asia, while our Asia300 section provides in-depth coverage of 300 of the biggest and fastest-growing listed companies from 11 economies outside Japan.

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For fiscal 2021, the semiconductor arm of Sony Group expects its operating profit to decline for the second consecutive year to ¥140bn ($1.26bn). The projection reflects changes in the smartphone market structure resulting from the trade friction between the US and China.

Huawei had a global market share at the 4 per cent level in terms of shipments in the January-March period, according to US research firm IDC. With the US government banning the export of American technology to Huawei, the Chinese company saw its market share plunge some 14 percentage points from the same quarter of 2020, when it ranked second.

At the expense of Huawei, Samsung, Apple of the US and three Chinese smartphone manufacturers — Xiaomi, Oppo and Vivo — expanded their shares.

Changes in global smartphone market shares

Sony commands half of the global market for image sensors in value. Growing demand for high-definition smartphone cameras, and the trend of using two or more cameras in a smartphone in recent years, have enabled Sony to expand shipments to Apple and Huawei on the back of its advanced technology of producing high-end sensors.

With Huawei losing its momentum, demand for cutting-edge sensors for high-end smartphones has weakened. Sony thus increased shipments to the three Chinese smartphone makers which primarily manufacture middle- and lower-end phones. While sensors for such phones are each priced low, the makers demand improvements in image quality to attract consumers.

Samsung has set an eye towards capitalising on the “new normal” created by the trade friction between the world’s two largest economies, in a bid to recover its lost ground.

Samsung ships nearly 300m smartphones per year, most of which contain image sensors it produces on its own. While having stable demand, the company is strong at producing high pixel sensors used in midrange smartphones and is enjoying growing demand.

In the global image sensor market, Samsung, with a share of 20 per cent, is trailing Sony, with its 50 per cent share. With Samsung boasting microfabricating technology needed for high pixel sensors, Shimizu said, “We are actually falling behind as far as high pixels are concerned.”

But, he added, “we will add new value using technology cultivated in the field of high image quality.”

Terushi Shimizu, president and CEO of Sony Semiconductor Solutions, speaks at a press briefing on June 3 © Masaharu Ban

Samsung has a large number of manufacturing facilities, including those for memory chips and central processing units. Sony will spend ¥700bn on production facilities in its semiconductor business under a three-year plan through fiscal 2023, up 20 per cent from the preceding plan. But if the importance of microfabrication technology increases, Samsung may gain an advantage because of its greater leeway for investment, according to a research company.

Sony is also expected to take time before reducing its reliance on the volatile smartphone market. Although the company positions image sensors for automobiles as a growth market and keeps boosting annual sales by 50 per cent, the business is still small in scale. Collaborating with its “Vision S” prototype electric vehicle project, Sony plans to develop a high-performance sensor capable of detecting objects even in the dark and sell it to American and European automakers.

Sony will also challenge for a new business model. While Sony has engaged in the sale of image sensors, it is attempting to establish a recurring model of collecting fees on a continuous basis. Specifically, it will use a sensor equipped with data-processing functions of artificial intelligence it has developed. Data, therefore, can be processed both in the cloud and in the sensor so that the volume of communication can be reduced.

For example, the sensor can be used in a camera at a cashless payment retailer with no cash register and improve the performance of street monitoring cameras.

Sony’s AI image sensor has found its way into smart monitoring cameras the city of Rome will put into use in June to optimise the operation of buses by sensing congestion at bus stops or emit light to pedestrians walking through a red light.

Image sensors with data-processing functions of artificial intelligence, developed by Sony, are promoting the rise of new core semiconductors for smartphones (Photo courtesy of the company)

The semiconductor business centred on image sensors was positioned as an engine of growth when Sony was rehabilitating itself. In fiscal 2019, it contributed to Sony’s earnings, logging more than ¥1tn in sales and an operating profit ratio of 22 per cent to sales.

Sony Semiconductor has propped up the revival drive despite such difficulties such as damage inflicted on its local plant by a series of earthquakes in Kumamoto Prefecture in 2016.

While striving to address radical changes in the smartphone market, Sony Semiconductor is being tested for whether it can develop new growth sectors such as image sensors for automobiles and AI image sensors.

Cutting-edge semiconductors are also drawing attention from the viewpoint of national security as the government has drafted a policy of courting overseas manufacturers.

The procurement of logic chips has become difficult as even Sony farms out most of production to overseas manufacturers. Asked whether Sony Semiconductor will launch production, including a joint venture project, for stable procurement, Shimizu admitted to the difficulty of producing them on its own in terms of both technology and cost.

“Generally speaking, it is extremely meaningful to receive state support,” Shimizu said, suggesting the need for government financial assistance for production.

A version of this article was first published by Nikkei Asia on June 7, 2021. ©2021 Nikkei Inc. All rights reserved

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Kamala Harris takes heat handling knotty vice-presidential portfolio

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US vice-president Kamala Harris gave a widely panned television interview while visiting Guatemala this week. 

Asked why she hadn’t been to the US-Mexico border, where an influx of migrants is putting a huge strain on local communities, Harris first dismissed the question and said, “We’ve been to the border.” Pressed, she laughed and said: “And I haven’t been to Europe.” 

Her comments drew criticism and underscored the political dangers that the number two official in the White House faces as she juggles a cumbersome, and expanding, policy portfolio.

Harris was in Central America as leader of the Biden administration’s response to the border problem, including the thorny question of how to address migrants fleeing north from the troubled countries of Guatemala, El Salvador and Honduras.

She has also been handed the nearly intractable task of shepherding contentious voting rights and police reform legislation through a sharply divided Congress. She has hit the road to sell President Joe Biden’s sweeping infrastructure plans. In addition, she has also taken an interest in black maternal mortality and other racial equity issues, including tackling vaccine hesitancy among African-Americans. 

Harris’s first foreign trip as vice-president exposed what detractors and allies alike say are her shortcomings as a politician and vulnerabilities should she run again for president. Harris, a former senator from California, abandoned a floundering primary bid for the White House in late 2019. 

Her comments earlier in the week to NBC News sparked outrage, particularly from Republicans who are hammering the administration over migrants. Meanwhile, she took flak from fellow Democrats for urging migrants not to come to the border in the first place. 

Mary Anne Marsh, a Democratic strategist, pointed to the vice-president’s failure to effectively convey her message on the trip.

“If this is your debut as vice-president on the international stage, you want to give your best performance, and she certainly can do better,” Marsh said. 

Harris made history at her January swearing in, becoming the first woman, the first black person and first Asian-American to serve as vice-president. She holds outsized power as the tiebreaking vote in a Senate evenly divided between Democrats and Republicans. But the other duties of a vice-president are less clearly defined. 

People close to the administration say that Harris has proven a deft counsellor to the president and a near constant presence at the White House, attending regular briefings, offering Biden advice and appearing at his side for big speeches. 

Biden himself served as vice-president under President Barack Obama from 2009 to 2017. When he announced Harris as his running mate last summer, he said he hoped that she would provide advice as he did to Obama. 

“When I agreed to serve as President Obama’s running mate . . . he asked me what I wanted most . . . I told him I wanted to be the last person in the room before he made important decisions,” Biden said. 

He added: “That’s what I asked Kamala. I asked Kamala to be the last voice in the room.” 

Harris is hardly the first vice-president with difficult assignments. Most recently, Mike Pence, Donald Trump’s vice-president, headed the White House coronavirus task force. 

“The vice-presidential tasks are such that usually, if you are successful, they become the president’s and the administration’s accomplishments. If you are unsuccessful, they become yours,” said Kenneth Baer, the founder of consultancy Crosscut Strategies. He was a speech writer for vice-president Al Gore in the Clinton administration and Gore’s ill-fated 2000 presidential bid. 

Harris supporters contend that her challenging portfolio only underscores the faith Biden has placed in her.

“Any one of those issues would be a full-time job for most people,” Marsh said.

Many Democrats argue Harris faces undue criticism, from Republicans in particular, given her identity as a woman of colour. But others admit she made missteps in Latin America and say that her refusal to correct course — Harris later had a frosty exchange with a Univision TV anchor about the border crisis — only remind people of her shortcomings as a presidential candidate in 2019.

“What I think you have seen in the past few weeks . . . are some of the issues you saw during the campaign,” Marsh said. “At different points during the campaign, she did not perform particularly well. Other days, she was spectacular.” 

Looming over Harris’s term is the political future of Biden, who is 78. Her allies say that she is focused on supporting the president as he seeks to push through his legislative agenda ahead of the 2022 midterm elections, when control of both chambers of Congress will be up for grabs. Next week, as part of her voting-rights remit, she will meet state legislators from Texas, where Democrats recently blocked a state bill that would have restricted access to the ballot box. 

“There is a sense . . . that she is focused on her future as opposed to the job, and I just don’t think that is true,” said Dylan Loewe, a former speech writer for then-vice-president Biden who also ghostwrote Harris’s memoir. 

“The last thing that she wants for her future presidential campaign, whenever it is, is for the storyline to be that she was focused on the future and not the president, and that she was not the same kind of vice-president to Joe Biden as Joe Biden was to Barack Obama.”

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Analysis

Big weddings may be allowed despite expected delay to lockdown easing

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Boris Johnson will consider proposals to allow larger weddings to go ahead in England, despite a likely delay to the June 21 easing of England’s lockdown.

Speaking at the G7 summit in Cornwall, the UK prime minister said the government would be cautious in its approach to ending lockdown restrictions, which senior Whitehall officials said would be delayed for four weeks.

“What I can certainly say is we are looking at the data, continuing to do that, but what you can certainly take is . . . the road map was always cautious but irreversible and in order to have an irreversible road map, we’ve got to be cautious,” he told the BBC.

Johnson will meet senior ministers on Sunday to sign off on an expected delay to the easing due to the spread of the Delta variant of Covid-19.

But ministers may still sign off on plans to allow larger weddings to go ahead. Those with knowledge of the proposals say they will mirror those currently in place for funerals. 

Indoor celebrations will be allowed up to each venue’s Covid-secure capacity, which means social distancing and masks would be required. 

Outdoor celebrations would have an overall cap, which could be 100 attendees. One person familiar with the proposals said: “It’s a completely arbitrary number and I have no idea how it would be enforced.”

Chart showing that roughly 15 million adults remain unvaccinated in England, including around two million over-50s

One senior Whitehall official said it was unclear whether the plans would be signed off. “Boris hasn’t decided but he will do it if it won’t harm the Covid situation.”

The delay to the lifting of coronavirus restrictions in England for a month comes after the prime minister’s chief medical adviser pressed him to postpone the move following a surge in Covid-19 cases.

The restrictions were meant to be removed on June 21, but Chris Whitty, England’s chief medical officer, has advised Johnson that a four-week delay to the final stage of the government’s lockdown easing plan was needed, stressing that a shorter delay would be insufficient to control the spread of the virus. Johnson is due to make an announcement on Monday.

The expected delay would come as the NHS races to vaccinate more adults amid a sharp rise in Covid-19 infections and hospitalisations across the UK due to the coronavirus variant named Delta. Almost 15m adults in England remain unvaccinated, including 2m people aged over 50, according to Financial Times analysis.

Nine in every 10 new Covid-19 cases are the Delta variant, according to a Public Health England report released on Friday.

PHE data also indicated Delta, first identified in India, is 64 per cent more transmissible than the previously dominant Alpha variant that originated in Kent.

Chart showing that cases are rising steeply in England, and hospital metrics are now also accelerating upwards. Deaths so far show no sign of a sustained rise

With two doses of a coronavirus vaccine showing good protection against infection from the Delta variant, the government is seeking to get more jabs into arms. Currently, 55.4 per cent of the adult population has had two doses.

Johnson was given data on Thursday that outlined the latest analysis of the Delta variant and its potential impact on the NHS. “It is now critical we double jab everyone as quickly as possible,” said one official.

One Cabinet Office insider said: “A delay [to lifting the final restrictions] is the only sensible course of action. It’s our working assumption. The latest modelling is dire and it would be suicide to go ahead with a full easing.”

The government’s medical advisers have modelled the impact of a four-week delay on vaccination levels, concluding that a smaller postponement would not make much difference.

But they believe four weeks would have a substantial impact by increasing the number of adults fully vaccinated with two doses, as well as giving more younger people at least some level of protection from a single jab.

Chart showing that England’s current surge in cases has a much younger age profile than its second wave last autumn, which should make it less lethal

The UK has recorded the highest weekly rate of Covid-19 cases since early March, with 45,895 new infections reported in the past seven days. This is a rise of 58 per cent on the previous week.

Office for National Statistics data showed the infection rate was highest in the north-west of England and among children of secondary school age.

Covid-19 hospitalisations have risen sharply since the Delta variant became dominant, with 884 beds occupied in England on Friday, up from a low of 730 on May 22. They have increased 9.8 per cent over the past week.

The link between cases, hospitalisations and deaths has not been broken by the vaccines, but data suggest it has weakened significantly.

More than half of the 42 people who have died after being infected with the Delta variant were unvaccinated, according to PHE.

With older people much less likely to be infected now due to vaccination than in the infection wave last autumn, the fatality rate is likely to be 75 per cent lower amid the latest surge in cases, according to FT analysis.



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