The Japanese government, one of the few remaining governments still financing overseas coal-fired power plants, issued a policy on July 9 stating that, “in principle,” the government will not finance overseas coal plants for any country that does not have a decarbonization policy. While the shift in language is notable and reflects the fact that the world is rapidly moving beyond coal, the policy contains dangerous exceptions allowing financing for “highly efficient” coal technologies and will not apply to coal plants already under consideration.(*1) Japan’s Environment Minister Shinjiro Koizumi stated that the policy will make it difficult for the government to support overseas coal-fired power projects in the future.
The move comes in response to strong international criticism. The Japanese government has faced protests and criticism during its hosting of the G20 last year, at the UN Climate Action Summit in New York and at COP 25 in Madrid. UN Secretary General Antonio Guterres drove the point home, calling on governments in Asia to end their “addiction to coal” last year. He recently renewed his calls, urging countries to stop financing coal and pledge not to build new coal-fired power plants to facilitate a shift towards clean energy.
Instead of taking bold action in line with the global exodus away from coal, the Japanese government chose to maintain exemptions for continued coal financing in its policy and will not apply the policy to projects currently in its financing pipeline. The Japanese government has, and will continue to, come under fire until it categorically ends its support for coal-fired power plants.
Groups in Japan and Indonesia recently launched a petition calling on the Japanese International Cooperation Agency (JICA) to reject financing for the Indramayu coal plant in Indonesia. The project threatens the livelihoods of thousands of farmers and fishermen and is associated with serious human rights violations. The petition says, “the Project must not be pushed through at the expense of the livelihoods and environment of the local community, or in exchange for future generations’ opportunities and choices, and global climate.”
According to Lidy Nacpil, Coordinator of the Asian Peoples’ Movement on Debt and Development, “We are deeply disappointed that the Japanese government’s policy on coal still falls short of what is needed to prevent catastrophic climate change. Japan should not remain deaf to the demands of many people and communities across Asia that it should completely end its financing and involvement in coal power immediately. The swift and just transition to renewable and clean energy is not only possible but is urgently needed.”
This petition follows a letter from 44 groups in 18 countries calling for JICA to reject support for the Matarbari 2 coal plant in Bangladesh.
The letter reads:
“Like the rest of the world, Bangladesh’s economy is hit hard by the COVID-19 pandemic…In the meantime, super cyclone Amphan ravaged the nation’s coastline last month and caused damage worth US$ 129.00 million. Simply put, Bangladesh cannot afford another coal-fired power project which is likely to be a stranded asset and need a huge amount of government subsidy.
“Moreover, JICA’s involvement in the Matarbari coal-fired plants is contradictory with its Climate Change Cooperation Strategy, according to which, ‘JICA will strongly support the transformation to a low-carbon and climate-resilient society and economy in developing countries’ with the aim of ‘attaining the objectives and goals of the Paris Agreement.’”
The Japanese government is also considering financing for the Vung Ang 2 coal plant in Vietnam. Vung Ang 2 drew the consternation of Minister Koizumi who initially called on Japan to reject financing for the project earlier this year. This led to the review of the coal infrastructure export policy, but the project is, thus far, still under consideration.
The No Coal Japan Coalition urges the Japanese government to take bold and overdue action to reject financing for all new overseas coal plants, including those under consideration, without exception.
According to a statement from Japanese NGOs, the policy states that the Japanese government, in principle, will not provide official support for new coal-fired power projects in any country where the Japanese government does not have a thorough understanding of that country’s energy situation and issues as well as its policies toward decarbonization, such as through a framework for bilateral consultation regarding energy and environmental policies. The policy does not substantially alter the four conditions for Japanese government assistance for overseas coal power as stated in Japan’s Fifth Strategic Energy Plan. The policy revision adds new conditions requiring the host country to move towards decarbonization and the use of Japan’s most advanced coal technologies.