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Japan’s Policy for Halting Coal-Fired Thermal Power to be Seriously Tested
It is Time to Contribute to the Paris Agreement by Promoting Renewable Energy

In the “Outline of a new strategy for overseas infrastructure development” announced in July 2020, it was clearly stated that, in principle, the Japanese government would no longer export coal-fired power generation. Although Japan has been the subject of criticism from abroad for many years, it has taken a big step with this new policy that strongly reflects the intentions of the Ministry of the Environment led by Minister Shinjiro Koizumi. With the 26th session of the Conference of the Parties (COP26) of the United Nations Framework Convention on Climate Change (UNFCCC) scheduled for November 2021, it is time to consider the future path of Japan’s policy for halting coal-fired thermal power.

Japan moves forward, but just follows Europe and the United States

The Paris Agreement, adopted as an international framework after 2020, states that efforts should be made to limit the rise in global average temperatures to 1.5 degrees Celsius compared to the pre-industrial era. This trend of decarbonization has led to a “breaking away from coal-fired power generation” in Europe and the United States (US), and several measures have already been implemented by both governments and private financial institutions.

In June 2013, the US government’s Climate Action Plan announced that it would not provide public financial support for new coal-fired projects outside of the US and called on public institutions in other countries and international financial institutions to stop lending to coal-fired projects. In response, international financial institutions, such as the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD), as well as Nordic countries suspended public assistance in principle or tightened regulations in the same year.

In December 2015, the Organisation for Economic Co-operation and Development (OECD) Export Credit Group also reached a “Sector Understanding on Export Credits for Coal-Fired Electricity Generation Projects” (OECD Sector Understanding). As a result, the Export Credit Agencies (ECAs) of OECD member countries have been banned from supporting the exports of “supercritical technology” and “subcritical technology” since January 2017, with some exceptions. Although support for the export of “ultra-supercritical technology” continues to be allowed, the international community, including Europe and the US, is steadily ceasing support for coal-fired thermal power.

What about the trend in Japan? Support from the Japanese government has been provided through the Japan Bank for International Cooperation (JBIC), the Nippon Export and Investment Insurance (NEXI), and the Japan International Cooperation Agency (JICA).

However, following Europe and the US, the Japanese government has begun to pull out of coal-fired thermal power. First of all, the JBIC and the NEXI have been required to comply with the OECD Sector Understanding since January 2017 as ECAs of OECD member countries. In the “Strategic Energy Plan” released in July 2018, four criteria for the export of coal-fired thermal power were announced. One of the criteria is that the Government of Japan must support the installation of ultra-supercritical coal-fired power generation facilities only for countries that have no choice but to use coal as an energy source.

In the “Outline of a New Strategy for Overseas Infrastructure Development” presented at the 47th meeting of the Management Council for Infrastructure Strategy in July 2020, it was clearly stated that “the government would not provide support unless it fully understood the energy picture and decarbonization policies of partner countries.” This is a more in-depth statement than before. Following the outline, Minister of the Environment Shinjiro Koizumi said at a press conference on July 9 that “in principle, we will not support new coal-fired projects.” Tadashi Maeda, Governor and Representative Director of the JBIC, also indicated at another press conference on July 29 that “there will be virtually no new loans.”

Yuki Tanabe, Program Director of the Japan Center for a Sustainable Environment and Society (JACSES), commented on the new strategy as follows: “The opinion of the Ministry of the Environment, which wanted to promote decarbonization under the initiative of Environment Minister Koizumi, was acknowledged. As a result, new coal-fired projects are unlikely to emerge in the future.”

Japan has exploited loopholes

In spite of the above progress, it is still too early to rejoice. This is because Japan already has a “track record” of exporting coal-fired thermal power by exploiting loopholes in the regulations. For example, the OECD Sector Understanding came into effect in January 2017, so it is not applicable to projects that had applied to the JBIC or NEXI before January 2017. Moreover, the ultra-supercritical technology is also coal-fired even if the power generation efficiency is said to be good. There was a possibility that ultra-supercritical technology would be subject to new regulation in the near future. As a result, the JBIC and the NEXI decided to provide support for many coal-fired projects before the regulations were tightened. According to Hozue Hatae, Development Finance and Environment Campaigner at Friends of the Earth (FoE) Japan, an international environmental NGO that has been investigating the actual export of coal-fired thermal power by Japan, the JBIC and NEXI have decided on a total of six public assistances (ultra-supercritical technology: 3, supercritical technology: 2, and subcritical technology: 1) after the adoption of the OECD Sector Understanding.

In addition to these developments, there are three other projects, including (a) Vung Ang 2 in Vietnam, (b) Matabari 2 in Bangladesh, and (c) Indramayu in the West Java province of Indonesia, that are not subject to the regulations in the outline because discussions had already been initiated with the partner countries. Specifically, (a) is a project that the JBIC and NEXI are involved, and (b) and (c) are projects associated with the JICA. For (b), a preparatory survey for cooperation will be conducted in the near future.

As for (c), there are many issues to consider beyond assessing the pros and cons of coal-fired thermal power. First of all, we need to answer this basic question: “Is a power plant necessary?” According to Hatae, “There is already a 30% surplus of electricity in the Java-Bali electric system, to which Indramayu belongs.” As Indonesia considers relocating its capital to Kalimantan, it is doubtful whether electricity demand will increase in Java in the future. It is also necessary to consider the impact on the daily lives of local residents. For example, local peasants are on the verge of losing their livelihoods as landowners sell their land. In addition, according to a field survey by the FoE Japan, the amount of compensation provided to each peasant is not equal since it is provided through the landowners.


Implementation should consider residents first

What should Japan consider when providing assistance? First, support for the formation of projects utilizing renewable energy should be a priority. Take Indramayu, for example. Japan should not put extensive efforts into assisting in the construction of coal-fired power plants, as there is already a surplus of electricity. Instead, Japan should take the time to think about how they could promote the use of renewable energy with partner countries. Environment Minister Koizumi said at the above-mentioned press conference that he would start a policy dialogue with the Vietnamese government to promote Vietnam’s decarbonization. However, it would have been better to do so before collaborating on the Vung Ang 2 project.

Even though these three coal-fired projects cannot be stopped, I would like to ask the Government of Japan and related stakeholders to consider the livelihoods of local residents first, and then implement projects later. Fair and appropriate compensation is also needed. Unfortunately, opposition is strong, and the project is not going well in Indramayu. It is important to carefully implement the project and minimize opposition from civil society. Moreover, it will be necessary to clearly explain these circumstances to the international community and seek their understanding of the fact that Japan will no longer support the export of coal-fired power plants. The COP 26, where world leaders gather, may be a good place to start the appeal.

As a part of an overall climate change strategy, we should have a sense of crisis and halt coal-fired thermal power as soon as possible. No matter how idealistic our goals may be, there is no bright future for us if we find loopholes and water down the countermeasures. Looking at the global trend of halting coal-fired thermal power, Japan should also consider promoting renewable energy to achieve the Paris Agreement. On the path to leaving a wonderful earth for the future generations, Japan’s determination is being tested.


By Keitaro Fukushima, Editor

“International Development Journal”, 2020 November edition


IDJ-Report 本気度試される日本の脱石炭火力



翻って、日本の動向はどうか。日本政府による石炭火力の輸出支援はECAsである国際協力銀行( J B I C ) と日本貿易保険(NEXI)、そして政府開発援助(ODA)の実施主体である国際協力機構(JICA)を通じて実施されてきた。だが、欧米を追随する形ではあるが、ようやく日本政府も石炭火力から手を引き始めている。まず先述したOECDセクター了解は2017年1月以降、OECD加盟国のECAsであるBICとNEXIに順守が求められている。日本政府独自の政策としては、18年7月の「エネルギー基本計画」の中で、石炭をエネルギー源として選択せざるを得ないような国に限り、原則、世界最新鋭である超々臨界圧以上の発電設備の導入を支援するなど、石炭火力の輸出にかかる4要件が打ち出された。


上記の進展があるとは言え、まだ手放しで喜ぶには早いだろう。日本勢にはすでに規制の穴を突いて、石炭火力の輸出をしてきた“実績”があるからだ。例えば、OECDセクター了解は2017年1月の施行であり、それ以前の経過措置期間中にJBICやNEXIに申請が来ていた案件は同了解の対象外であった。また、いくら発電効率が良いと言っても、所詮は超々臨界圧も石炭火力である。近い将来、規制の対象になる可能性は十分にあった。その結果、生じたのが石炭火力案件の“駆け込み”的実施である。日本勢による石炭火力の輸出の実態を調査してきた国際環境NGO(特活)FoE Japanの波多江秀枝委託研究員によると、JBICとNEXIはOECDセクター了解の後に経過措置のものも含め、計6件の公的支援(超々臨界圧3件、超臨界圧2件、亜臨界圧1件)を決定した。
③は石炭火力の是非に留まらない課題が山積している。まず「そもそも発電所が必要なのか」という問いだ。先述の波多江氏は「すでにインドラマユが属するジャワ―バリ系統で電力が30%余っている」と指摘する。同国内ではカリマンタン島への首都移転が検討される中、今後ジャワ島で電力需要が増えるかどうかは怪しい。そして現地住民の日常生活への影響も考慮する必要がある。例えば、地権者が土地を手放したことで小作農の生計手段が失われる危機に瀕している上、FoE Japanの現地調査によると、地権者を介した補償を行っているため、小作農に対る補償額が一律になっていないという。


(本誌編集部・福島 勁太郎)

国際開発ジャーナル 2020年11月号掲載記事

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