Japan looks to tighten overseas coal financing policies

Japan aims to withdraw its support for new overseas coal-fired power generation developments by the end of this year but is prepared to make an exception for projects with measures to cut CO2 emissions.

The Japanese government announced on 17 June its plan to halt financial support, including through its official development assistance scheme, for new overseas coal-fired power projects without CO2-reduction technologies. Details of CO2-reduction measures that qualify for an exception have not yet been decided. The ministry of economy, trade and industry (Meti) is discussing potential exceptions and it is unclear when these will be firmed up.

Japan will continue to support existing projects.

The country revised its environmental policies following the 11-13 June G7 summit in the UK, which called for greater contributions to global financing of the transition to carbon neutrality.

Japan previously allowed financing for projects with cutting-edge technology such as ultra-supercritical with more than 43pc generating efficiency, integrated coal gasification combined cycle (IGCC), biomass or ammonia co-firing, CO2 capture and storage and carbon recycling that can contain CO2 emissions as much as IGCC. This policy also mandated Japan to set long-term decarbonisation strategies for importing countries.

By Nanami Oki