Briefing highlights that Japan’s support for oil, gas and coal is fueling the climate crisis, undermining energy security and harming communities.
TOKYO – A new briefing released today reveals that Japan is the world’s largest public financier for oil, gas, and coal projects. Japan contributed 10.6 billion USD per year on average between 2019 and 2021 through its export credit agencies and development finance institutions. Japan also leads in global public finance for gas, averaging 6.7 billion USD per year during the same period.
As part of the G7, Japan committed to end new direct public support for the international unabated fossil fuel energy sector by the end of 2022. However, shortly afterwards, an official from Japan’s Ministry of Economy, Trade and Industry said that Japan will continue to finance upstream oil and gas developments that contribute to energy security.
According to the International Energy Agency (IEA), accelerating investment in clean energy and efficiency, not new fossil fuels, is the answer to both the climate and energy security crises. The IEA’s 2022 World Energy Outlook (WEO) reaffirms its policy conclusion that new oil and gas fields and coal mines are not needed in a world staying below 1.5°C of warming. The IEA clearly states, “No one should imagine that Russia’s invasion can justify a wave of new oil and gas infrastructure in a world that wants to reach net zero emissions by 2050.”
Despite this, Japan is pushing for gas expansion and is promoting “false solution” technologies in Asia and globally. This includes hydrogen and ammonia co-firing as well as carbon capture and storage (CCS). Instead of supporting the transition to clean energy, these technologies would prolong the use of fossil fuels.
Japan is pushing ahead with support for new gas infrastructure despite opposition from local communities and corresponding project delays. Projects in Mozambique, the Philippines, and Australia, for example, threaten rich biodiversity, the livelihoods of people reliant on local ecosystems, and communities facing relocation. Affected communities are organizing in opposition to these projects, filing complaints to authorities, and taking those responsible for the projects to court.
Makiko Arima, Japan Finance Campaigner, Oil Change International: Japan’s efforts to expand upstream oil and gas and promote false solutions are prolonging the use of fossil fuels and delaying the transition to renewables. There’s no room for new oil and gas fields or coal mines. Japan needs to follow through on its G7 commitment to end support for international fossil fuel projects by the end of this year, and invest in clean energy.
Ayumi Fukakusa, Climate and Energy Campaigner, Friends of the Earth Japan: Japan’s fossil fuel finance will increase host countries’ reliance on fossil fuels, worsening the climate and energy crises and destroying people’s livelihoods. It is time for the Japanese government to shift its support towards clean and democratic energy systems that will have a truly positive impact on the global climate crisis. Japan’s false solutions will only worsen an already catastrophic climate crisis.
Gerry Arances, Executive Director, Center for Energy, Ecology and Development: Filipinos need real solutions amid the climate and energy crisis, not more fossil fuels. Communities and civic movements in the country have so far succeeded in stopping nearly half of what had been the 9th biggest coal project in the pipeline in the world in 2019, at least two LNG projects, and sparked resistance against all other proposed gas projects leading to delays – all because we know they can do no good for us. Relying on fossil fuels will only exacerbate the energy crisis, threaten the beauty and biodiversity of the Verde Island Passage, and harm the livelihoods of the communities in the VIP. The Japanese government should take note that their international cooperation in the form of false solutions is not welcome in the Philippines.
Luke Fletcher, Executive Director, Jubilee Australia: Over the last decade, Australia has grown to become the largest exporter of gas in the world, yet much of this has been on the back of public finance provided by countries like Japan. According to our research, between 2010 and 2020, Japanese public finance institutions provided over AUD$15 billion in funding for new and existing fossil fuel developments in Australia, mostly in the gas sector. Even now, JBIC has committed to supporting Santos’s extremely dirty Barossa Gas project in the Timor Sea, despite the fact that proper consent for the project has not been sought or gained from Tiwi Island indigenous communities.
Anabela Lemos, Director, Justiça Ambiental: The Mozambique gas industry has created irreversible devastation to the climate, economy, and environment of Mozambique, fueling a war that has created a million refugees and torn thousands of people from their homes, lands and livelihoods. These impacts could not take place without financiers like the Japanese government. It has made decisions to finance the industry based on flawed, outdated and opaque assessments and exploit the narrative of ‘gas for development’ when it knows very well that the industry will only leave Mozambique worse off. Japan must remove itself from any involvement in the gas industry, otherwise it will remain complicit in this travesty.
- Numbers for the report are based on Public Finance for Energy Database (energyfinance.org), a project tracking financial flows to fossil fuels and clean energy from G20 bilateral development finance institutions (DFIs), export finance agencies (ECAs), and the multilateral development banks (MDBs).
- In its Leaders’ Communique in June 2022, G7 leaders committed “end new direct public support for the international unabated fossil fuel energy sector by the end of 2022, except in limited circumstances clearly defined by each country consistent with a 1.5°C warming limit and the goals of the Paris Agreement” with a caveat for “exceptional circumstances” in response to the Russian crisis.
- The latest International Energy Agency’s World Energy Outlook 2022’s net zero scenario, the global LNG trade will peak in the mid-2020s, fall to 2021 levels by 2030, and decline sharply to 150 bcm by 2050. There is no further need for additional capacity beyond what exists or is under construction, according to the report.
- In May 2021, the Japanese Ministry of Economy, Trade and Industry announced that it would provide $10 billion for transition efforts in the ASEAN region, including LNG projects, through the Asia Energy Transition Initiative. Prime Minister Kishida also promoted an Asia Zero Emissions Community earlier this year, which would push for “decarbonization” technologies such as ammonia and hydrogen co-firing and CCS, which still relies on fossil fuels. Kishida called the technologies “decarbonizing while still using fossil fuels.”
Makiko Arima – firstname.lastname@example.org
Susanne Wong – email@example.com
Download the report here.