Japan to accelerate green initiatives while ensuring emerging Asia is not left behind

Japan’s energy security is dependent on that of countries across Asia, and Tokyo hopes to play a leadership role in helping emerging nations in the region shun dirty coal and reduce their carbon emissions, Japan’s outgoing industry minister told an environment conference here.

“We need to cooperate and establish mechanisms to attract investment and funding to ensure that no single country in Asia is left behind,” Mr Hiroshi Kajiyama said at the first annual Asia Green Growth Partnership ministerial meeting on Oct 4.

Japan has earmarked US$10 billion (S$13.6 billion) in this regard for the Asia Energy Transition Initiative to help Asean, Central Asia and the Middle East move away from fossil fuels.

There is no one-size-fits-all solution for every country, he noted. So it was important to first secure a commitment for carbon-neutrality from countries, and at “the earliest possible timing” in line with goals under the Paris climate accord to cap global temperature rise at under 1.5 deg C by 2100, he said.

The meeting was attended by industry ministers or their equivalents from 22 countries, including Singapore’s Dr Tan See Leng, who is Second Minister for Trade and Industry.

China and South Korea were invited but did not attend, citing their national holidays, a ministry official told The Straits Times.

Dr Tan, who is also Manpower Minister, laid out the efforts that Singapore has been making towards green growth, including its efforts to boost solar energy and research and the development of new emissions-reducing technology such as ammonia and carbon capture, utilisation and storage.

Mr Kajiyama’s attendance at the meeting was one of his final duties before his successor Koichi Hagiuda was sworn in under the new government led by Prime Minister Fumio Kishida. The Premier is not only committed but also set to accelerate Japan’s energy transition, which began under his predecessor Yoshihide Suga.

Japan has long been accused of being addicted to dirty coal, and had until recently drawn flak for exporting coal power plant technologies to emerging Asia.

The world’s third-largest economy has, however, changed tack under global pressure and has now committed to achieving carbon-neutrality by 2050 and to slash carbon emissions by at least 46 per cent from 2013 levels by the end of this decade.

“It is most effective to make efforts according to each country’s economic, social and energy situations and technological capabilities,” Mr Kajiyama said, noting the need to embrace “a variety of options, such as nuclear power, hydrogen and ammonia, to promote energy transitions in a realistic way”.

Mr Hagiuda noted at his first news conference as industry minister on Tuesday that Japan, likewise, will “pursue every option” towards net-zero emissions.

This includes gradually restarting nuclear plants after safety checks, even as nuclear energy still has a bad name in Japan following the Fukushima disaster in 2011.

Japan is also making a strong commitment towards green technology.

Bank of Japan governor Haruhiko Kuroda said on Oct 6 that it was important to act now rather than later. The central bank will launch a scheme in December to provide zero-interest loans to financial institutions for investments that address climate change.

The Financial Services Agency will likely require large companies to make climate-related disclosures, including carbon emissions, from April next year, the Nikkei reported. This will likely cover some 4,000 companies.

Yet independent of this, individual companies are also reducing their environmental footprint.

The Nikkei said in another report last week that Japanese oil giant Eneos Holdings will acquire Tokyo-based start-up Japan Renewable Energy for more than 200 billion yen (S$2.4 billion) by buying out shareholders Goldman Sachs and Singapore sovereign wealth fund GIC.

Tokio Marine, one of Japan’s largest insurers, said this month that it will stop underwriting and financing new coal mining projects, while financial institutions like Mizuho and Sumitomo Mitsui have divested from coal-fired power plant projects.

Tokyo hosted its first-ever decarbonisation expo at the Tokyo Big Sight last month, featuring hundreds of companies, including Tokyo-based Blue Biomass Fuel.

The company acquires palm oil from Malaysia plantations, which is then shipped to Japan for the conversion into usable electricity.

Mr Satoru Koizumi of the firm’s corporate planning division told The Straits Times that Blue Biomass Fuel has worked with insurer Sompo to create what is believed to be Japan’s first insurance contract for biomass fuel procurement.

“The scheme will compensate for losses caused by supply delays due to disasters or accidents, as well as for expenses incurred by power plants as they search for substitute energy sources,” Mr Koizumi said.