Japan pledges to cut funding for coal-fired electricity in developing countries
Japanese policy and policy updates
Sign up for myFT Daily Digest to be the first to know about Japanese politics and political news.
Japan’s environment minister hailed a “turning point” in his country’s climate change policy after pledging to cut his much-criticized support for coal power in the developing world.
In an interview with the Financial Times, Shinjiro Koizumi said that the new infrastructure export strategy announced last week marked a clear change of approach after the stigma at the UN climate conference last December in Madrid.
The new policy will cut a major source of official funding for coal-fired power plants in Southeast Asia and help spur a regional transition to cleaner energy – if Japan rigorously implements it.
Although the country still supports the export of coal turbines under certain conditions, Mr Koizumi said that in practice it would be difficult to comply with them. “[Until now] Japan’s attitude was that if we can sell, we should, ”he said. “It’s completely changed. In principle, there will be no support.
Tokyo has provided billions of dollars in low-interest loans to build coal-fired power plants in India, Vietnam and Indonesia through the Japan Bank for International Cooperation, using equipment from manufacturers such as Mitsubishi Heavy, Hitachi and Toshiba.
These projects have been attacked by environmental activists because they put fast-growing economies on the path to decades of high carbon emissions, contributing to future climate change.
Under the new policy, Japan will only support exports of the most efficient ultra-supercritical generators, and only when the purchasing country has put in place a decarbonization strategy. Combined with the falling cost of renewable energy sources such as solar and the reluctance of banks to finance coal, this will make it difficult to start projects.
Mr Koizumi said international criticism at the COP25 conference in Madrid had hit the nail on the head. “There has been a lot of reporting in Japan about the criticism we have received about coal,” said the minister, son of former prime minister Junichiro Koizumi and a rising star of politics. “Japan hadn’t really noticed it before. Until now, everything revolved around nuclear power in Japan.
After the Fukushima collapses in 2011, much of the country’s public energy opposed nuclear power, but coal production increased to compensate for any reactors that remain offline.
Energy is the world’s essential business and Energy Source is its newsletter. Every Tuesday and Thursday, straight to your inbox, Energy Source brings you essential information, cutting-edge analysis and insider intelligence. register here.
Last week, the Economy Ministry announced a new policy on domestic coal production, aimed at phasing out old coal-fired power stations which provide about 16 percent of electricity nationwide. However, two-thirds of that capacity will be replaced by new, more efficient coal-fired generators, committing Japan to burning fossil fuels for a very long time.
An alliance of environmental groups, including local branches of Greenpeace and Friends of the Earth, said the pledge not to fund coal-fired power plants abroad was in principle a “step forward”, but that the government should have adopted an outright ban.
“In addition, the principles leave an important gap, since they do not apply to projects which are at the planning stage”, says the group, noting that three large coal projects – Vung Ang 2 in Vietnam, Indramayu in Indonesia and Matarbari Phase 2 in Bangladesh – were already in preparation.