The Japanese cabinet council on 9 June authorised a revision of its official overseas development assistance (ODA) policy, adding energy security as a key issue for developing nations.
Japan revised its Development Cooperation Charter, a basic foreign policy for assisting developing nations, for the first time in eight years. The new charter added energy security as a key agenda, stating that Japan will "aggressively" support developing countries by diversifying supply sources and establishing related infrastructures.
"Japan will promote cooperation to enhance resilience and diversification of supply chains as well as economic diversification, sustainably procure resources, promote and protect technology," according to the charter. "In particular, the enhancement of resilience and diversification of supply chains, [and] sustainable development of critical mineral resources."
The focus on energy security comes on the back of the G7 group's plans to diversify the economic supply chain. The G7 leaders' summit in Hiroshima, Japan, on 19-21 May designated critical minerals, semi-conductors and electric vehicle (EV) batteries for special protection. The group made its first statement on economic resilience and security, pledging to build resilient supply chain networks among trusted partner countries, and pushing back against "non-market policies and malign practices".
Green transformation
The amended charter also emphasises assistance programmes to promote green transformation technologies in developing nations to achieve decarbonisation and energy transition. This is in line with Japan's broader green transformation policy to boost public-private investments in achieving carbon neutrality by 2050.
The new charter enables the country to promote decarbonisation projects that involve Japanese companies and decarbonisation-related technologies abroad, especially in Asian regions that account for more than 40pc of Japan's total ODA expenditure.
Japan aims to spur decarbonisation in Asia by combining these measures with the Asia Zero Emission Community that it set up in March to accelerate energy transition in the region.
Japanese bureaucrats are sceptical about promoting the European approach towards energy transition that utilises wind and solar power to Asian countries, stressing the importance of a more diversified approach.
"I occasionally hear that we must follow European way of decarbonisation but we feel uncomfortable on this," said Ryo Minami, director-general for international policy on carbon neutrality at the country's Agency of Natural Resources and Energy. "Asian nations should choose [energy] transition pathway taking into their own circumstances into account," he said during the Asean-Japan Business Week 2023 in Tokyo last week.
Many Asian nations are unable to have generate sufficient wind power like in Europe, where strong westerlies blow, Minami added, and Asia is not spacious to set up massive solar power facilities like in Europe where there are vast plains and plateaus.
He did not specify what types of renewable energy are suitable for Asian regions, but reiterated Japanese prime minister Fumio Kishida's speech about promoting decarbonisation in Asia with advanced Japanese hydrogen and ammonia technologies.
Japan also recently created a new legal framework to leverage fossil fuels to drive its decarbonisation efforts. The country imported around 72mn t of LNG and 116mn t of steam coal in 2022. The volumes could fall in line with the expansion of renewable sources and the possible restart of more nuclear reactors. But Japan still plans to generate 41pc of its electricity from thermal power in 2030-31, down from 76pc in 2019-20. Given the intermittency of renewables, Tokyo will continue to look to LNG to ensure energy security on the way to carbon neutrality, reinforcing energy diplomacy with key suppliers like Australia.
