Japan's New Coal Export Policy a Step in the Right Direction

The blog was co-written with Qingyang Liu.

In July 2020, Japan released a new policy on overseas coal-powered projects after facing criticism for the government’s promotion of new Japanese-supported coal plants overseas. While the policy is an acknowledgement that there are serious environmental health and climate damages from exporting coal-fired power plant technology, the loopholes in the new policy mean that new projects can still get support from the Japanese government.

The statement, coming on the heels of a decision to close 100 inefficient domestic coal-fired power plants in Japan by 2030, was released by the Japanese government on July 9, after internal deliberations within the government. It says that in principle, the government will not provide assistance for new coal projects to those countries where Japan is not fully aware of the local energy situation and challenges or policies for decarbonization.

Unfortunately, the policy includes exemptions where the Government of Japan will still fund coal plants: if partner countries with “no alternative” to coal-fired power plants request to access Japan's “highly efficient” coal-fired power generation technologies, and where the plant would “promote” an energy transition towards decarbonization with the support of Japan. According to Japan Times, the four conditions that Japan used to evaluate whether to export coal-powered technology are: “said nation has no other reasonable options for alternative energy sources, the request is made through official channels directly to the Japanese government, the foreign nation’s energy policy and climate change prevention measures are comprehensive, and coal-fired power satisfies the basic standards of Ultra Supercritical Coal, which refers to more modern plants with higher efficiency and often lower heat waste, pollution and carbon emissions.”

The newly released infrastructure export plan will take effect in December. While the new coal export policy marks a welcome shift away from Japan’s previous stance of supporting Japanese coal industry profits at all costs, without proper consideration of the project impacts, the new policy does not go far enough. Many Japanese environmental organizations have raised concerns over loopholes in the policy. A joint statement released by six environmental NGOs points out that the principles will not apply to projects already in the pipeline (i.e. in the planning or construction stage). Projects already under consideration include the controversial 1200 MW Vung Ang 2 coal project in Vietnam and the 900 MW Indramayu coal power station in Indonesia. The statement also argues that “highly efficient” coal-fired plants (which are in fact a dangerous misnomer) will lock in future greenhouse gas emissions for a long time. It remains to be seen whether Japan will keep using the policy loopholes to justify even more new projects in the future.

Despite the criticisms, most media sources report that the new policy makes it much more difficult for Japan to support coal-fired projects abroad. Of course, Environment Minister Shinjiro Koizumi should be applauded for efforts to push Prime Minister Abe and other ministries in the right direction. However, it is clear from the new coal export policy that Japan still has a way to go in reforming its coal export policy. The government, and the private Japanese banks that are still co-financing many of the projects, will continue to face calls from communities worldwide to end support for coal.

About the Authors

Han Chen

Manager, Energy Policy, International Program
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