TOKYO (Reuters) - A Japanese government panel on Tuesday urged the country to aim to be carbon-neutral as soon as possible after 2050 through innovations such as the wide use of carbon dioxide (CO2) capture technology and lower cost hydrogen production.

Stacks on the main carbon dioxide removal equipment are shown at the Tomakomai carbon, capture and storage (CCS) test site in Tomakomai, Hokkaido prefecture, Japan March 22, 2018. Picture taken March 22, 2018. REUTERS/Aaron Sheldrick

The proposal comes as Japan is mapping out a long-term low-emissions strategy to be submitted to the United Nations to flesh out how to reach commitments made under the 2015 Paris Agreement to keep the rise in global temperatures below 2 degrees Celsius this century.

The proposal highlights new targets such as the commercialization of carbon capture and storage (CCS) and carbon capture and utilization (CCU) by 2030 and a reduction in costs of producing CO2-free hydrogen, but it postponed an outline on the direction of coal financing or a carbon tax.

To help achieve the Paris Agreement’s goal to limit global warming, Japan should develop commercial CCU technology within several years and start commercial use of CCS and CCU by 2030, while considering exporting such technologies, the panel said.

The panel, a group of academic experts and business leaders, also said Japan should cut the costs of producing CO2-free hydrogen to one-tenth by 2050, which would become lower than liquefied natural gas (LNG).

Japan has been criticized for its heavy use of coal-fired power generation and plans to build new coal-fired plants.

The panel urged Japan to cut its dependency on coal-fired power generation to the “lowest possible levels”, but stopped short of giving a specific target.

Environmental activists also blame Japan for financing overseas projects to build coal-fired power plants.

The panel encouraged Japan’s capital markets to become greener, but did not say Japan should stop coal financing.

Also, it said Japan needed further discussions on carbon pricing although the environment ministry’s panels have been discussing the issue for almost two years.

Japanese plans to lay out its long-term strategy ahead of a summit of the Group of 20 major economies to be held in June in Japan, an official at environment ministry said.