On 20 August 2019, Greenpeace’s Global Air Pollution Unit exposed Japan’s deadly double standard – Japan is financing coal-fired power plants overseas, which pollute the air at levels that would not be accepted in Japan.
While the report focuses on public finance, Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Financial Group (SMFG) and Mizuho Financial Group (Mizuho) have participated in deals totaling US$16.8 billion to finance these polluting power stations.
Financing polluting coal power
The report looked at 18 coal power stations financed from January 2013 to May 2019, with Japanese commercial bank contributing funds for all but three coal power stations.(*1) The report found that the emissions of the overseas power stations far exceeds the median emissions expected from new coal power stations in Japan.(*2)
For example, the Nghi Son 2 power station which was financed by SMFG, MUFG and Mizuho(*3) in 2018 will emit almost up to 27 times more air pollution than the average domestic Japanese coal power plant, with emission limits of 455, 350 and 140 mg/Nm3 for NOx, SO2 and dust, respectively. At the highest, the emission limits in overseas projects come up to 13 times more nitrogen oxides (NOx), 33 times more sulfur dioxide (SO2) and 40 times more dust pollution.
Horrendous effects of coal power pollution
These pollutants cause fallout of toxic heavy metals and acid rain which can damage crops, forests and waterways, increase the risk of heart disease, stroke, lung cancer, and respiratory illnesses in adults and respiratory infections in children, which lead to premature deaths in these affected populations.
According to the modeling result, the power stations financed by the Japanese commercial banks would cause estimated 8,475 premature deaths in one year alone across Indonesia, Vietnam, India and Morocco, far exceeding the deaths that would result if standards used in Japan were being applied.
Type of coal technology makes little difference
The Japanese banks support the use of so-called “quality infrastructure” of which Japan is very proud. However, “quality infrastructure” seems limited to higher efficiency boilers, which continue to emit air pollutants. These banks stop financing coal power altogether given that no technology which results in such significant health impacts and deaths can be called “quality infrastructure”.
Of the banks, SMFG and Mizuho have policies which purport to restrict finance only to projects which use ultrasupercritical projects, although the policies’ loopholes make it possible to finance just about any coal power plant. Even if restrictions are applied without the loopholes, the report points out that ultrasupercritical projects only reduce air pollutant emissions by approximately 10 to 15% compared with a power plant with a subcritical boiler. This is hardly a dramatic reduction in pollution. Stronger emissions standards and controls make a much greater difference.
In financing this polluting technology, Japan is contradicting itself. The Ministry of Economy, Trade and Industry (METI) in its 2018 report on promoting quality energy infrastructure in Vietnam states that in introducing Japanese ultrasupercritical technology, “appropriate measures for pollution prevention (e.g. smokes and dusts) as applied in Japan should be taken.”(*4) Nevertheless, as the report shows that Japan continues to apply inferior technology to other countries.
It is unacceptable that Japan and its commercial banks, MUFG, SMFG and Mizuho are promoting a deadly double standard to the coal projects it finances overseas. These banks should be promoting renewable energy solutions overseas that do not poison the environment and harm local communities, while still promoting development.
(*1) These power stations are Indramayu in Indonesia, Matarbari in Bangladesh and Thai Binh 1 in Vietnam. In Greenpeace’s health modelling analysis, they provided data on the health impacts in 17 of the 18 projects which would affect Bangladesh, Vietnam, Morocco, Indonesia and India.
(*2) This is based on data on actual permit conditions of the plants, which prescribe emissions limits stricter than the national standards in the environmental permits.
(*3) Japan Bank for International Cooperation, “Project Finance and Political Risk Guarantee for Nghi Son 2 Coal-Fired Power Generation Project in the Republic of Vietnam”, online: https://www.jbic.go.jp/en/information/press/press-2018/0413-010921.html.
(*4) Section 7.2, Pg. 140