A step in the right direction on coal?

On February 25th, Environment Minister Shinjiro Koizumi announced that the government (not just the Ministry of the Environment but the entire government) agreed to “review” the current policy of foreign assistance for coal-fired power plants. It should be noted that this is just an announcement of starting a “review” and thus it does not contain any changes to the existing policy yet, though the Minister mentioned its direction of “tightening” of the conditions for providing finance for coal-fired power plants.

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The current government’s position and conditions are expressed in the 5th Strategic Energy Plan as follows:

“In order to lead global decarburization taking into account the Paris Agreement, GOJ proposes to the partner country all options that contribute to CO2 emissions reduction, including renewable energy and hydrogen, etc., based on the needs of the partner country, to actively promote “low-carbon infrastructure exports.” In this process, in the case that there is a request from a partner country for Japan’s high efficiency coal thermal power generation then only for those countries that are forced to choose coal as an energy source from the perspectives of energy security and economic viability GOJ supports the introduction of power generation equipment that is in principle at or above ultra-supercritical pressure (USC), the global state-of-the-art, taking into account OECD rules and in a form that is consistent with the energy policy and climate change measures of the partner country.” (p. 24)

The four red parts are called “four conditions.”  The review is intended to revisit them.

The result of review and discussion will be reflected in the government’s Export Strategy for Infrastructure Systems, whose outline is expected to be adopted in June.

The Export Strategy is something that covers the entire fields of infrastructure systems and, in fact, coal-fired power plants are just a tiny part of it.  The Strategy has been revised every June since the first version adopted by the Management Council for Infrastructure Strategy under the Cabinet Secretariat in 2013.   Its goal is that Japanese companies should receive orders for infrastructure projects with a total value of approximately 30 trillion yen in 2020.  Hence this year is one milestone.

At this point, it is uncertain whether the review could actually result in any meaningful change of the Japanese government’s policy to promote coal-fired power plants overseas.