Japan's G7 Fossil Fuel Push

We speak with Susanne Wong and talk about the upcoming G7 Summit in Hiroshima and go over issues related to Japan's insistence on seeing more investments in gas-related infrastructure, the recent G7 energy ministers meeting that took place in Sapporo in the run up to the G7, Japan's foreign energy policy and its impacts on Southeast Asian countries, the problems with an over-reliance of gas for countries like Bangladesh where Japan is now supporting its energy development, and other topics.

Susanne is the Asia Program Manager at research, communication and advocacy organisation, Oil Change International, and she works with an international and Japanese-led coalition in pressuring the Japanese government to change course on fossil fuels. Previously, Susanne worked on issues and campaigns that affected communities by mega projects in marginalised countries and regions from Laos to the United States.

LinkedIn: Susanne Wong
Twitter: @susanneir
Oil Change International Twitter: @priceofoil

Transcript

Host (01:33): We are here with Susanne Wong. Susanne, thank you so much for coming on Energy Insights. It's a pleasure to get you on here, and while I would've introduced you to listeners beforehand, I always like to give our guests an opportunity to tell us about themselves and their background and what they're working on.

Susanne Wong (1:53): I'm the Asia Program manager at Oil Change International, which is an international NGO that works to speed the ongoing transition to clean energy. I've been working on social and environmental justice issues for over 25 years now, and I've been so privileged to spend a lot of that time supporting coalitions, fighting for just and sustainable development. One of those is the Fossil Free Japan Coalition, which is an international coalition of dozens of civil society organizations and movements in Japan and across the world working to end Japan's support for gas, coal, and oil. 

Host (02:37): Today, I did want to talk about all things energy related and especially G7 related, given that the summit is about to take place in Japan later this month. But first, I'm just curious to ask, what attracted you to working on, for example, you mentioned justice issues, and you've been in this field for 25 years. Was this an unfolding journey, or was there a certain moment where it kind of all just clicked for you? 

Susanne Wong (03:04): I think I've always been committed to helping both protect the environment and support the rights of communities who depend on it, which is pretty much all of us. So I really have appreciated the opportunity, whether it's fighting against dams, fighting against big tech development, and displacement of communities in the Bay Area in California, or fighting against coal or gas projects across Asia.  I think it's all tied to the same problematic development model that basically sacrifices the rights of people and communities and ecosystems for profit.

Host (03:45): Awesome. So without further ado, let's jump into the upcoming G7 summit. I think it would be useful just for context if we step back a bit and try to go over a brief summary of what happened in last year's summit in Germany. Now, it's only been one year, but the world has changed significantly since then. If I do remember correctly, last year, there was quite a bit of criticism thrown at the G7 for its lack of leadership on energy issues during that time, given that they were talking about putting more money into gas and putting more support into gas-related infrastructure, given Russia's invasion of Ukraine. I was just wondering what your take on last year was and the critiques on the lack of leadership shown by the G7 last year.

Susanne Wong (04:46): Last year, basically, one of the most significant things that the G7 did was committing to end international public finance for fossil fuels by the end of 2022. It was actually, of all the things, of all the bluster, all the promises, all the commitments, that doesn't amount to nearly enough strong action to address the climate crisis. This is actually a huge step forward. 

The G7 actually provides about almost 80 billion dollars in public finance or government funds for international fossil fuel projects from 2020 to 2022. This is a huge number on its own, but this public finance also unlocks a much larger amount of private finance for these fossil fuel projects. Most of the public finances given through loans and export credit guarantees that reduce the financial risk of projects that their companies are involved with abroad. So shifting this money towards renewable energy would go a long way towards meeting the obligations of the world's richest countries.

But like you said, G7 leaders actually weakened this commitment by adding in loopholes on LNG and allowing new investment in fossil fuels because of the war in Ukraine. Japanese officials seized on this opening, like officials with the Ministry of Economy, Trade and Industry, just days after the commitment said Japan would continue financing upstream oil and gas projects. So there was a significant step forward, but a loophole large enough to allow many new gas infrastructure projects to go forward. 

Host (06:29): So now, prior to any meetings that were held in Japan, we're talking just at the beginning of, say, 2023. There was, and I think you mentioned this as well, a significant amount of talk about Japan pushing through an agenda since they are the chair of the G7 this year. They were pushing through an agenda that did have links to fossil fuel interest, for example. This, in a sense, was a bit of a preview to the meeting that happened between energy meetings in Sapporo recently, the pre-G7 summit meeting. I just wanted to get your take on that. But perhaps before we go into that specifically, I was just wondering if you can give us a tour of Japan's reliance on fossil fuels. How dependent is the country on things like gas and coal, and also, how is the country fairing in its transition to cleaner energy?

Susanne Wong (07:29): Japan is heavily reliant on imported fossil fuels for power generation. It's about 75% in 2019. As you probably know, the nuclear disaster in Fukushima was a huge turning point for Japan. Out of concern for public safety, nuclear reactors were shut down, and Japan developed and advanced intense plans to build new coal plants and ramp up its LNG use. But at the same time, Japan actually needs to phase out coal, [and] reduce reliance on LNG. That needs to go in the opposite direction, but Japanese corporate interests are so powerful and they're driving government policy. 

This really interesting report, a really important report that just came out a couple [of] months ago from some researchers in Berkeley, that actually looked at Japan's energy situation and saw that Japan has significant potential to scale up renewables. They thought Japan could scale up its solar PV and wind and other renewables to 70% by 2035. So there is a pathway towards decarbonizing Japan's electricity sector. But right now, there's no political will. 

Host (08:49): You mentioned the corporate sector in Japan being really powerful. Is this a handful of companies or is this a consortium of many companies in Japan?

Susanne Wong (09:02): The entrenched fossil fuel interests are big and broad in Japan. It ranges from JERA, which is the biggest power producer in Japan, one of the biggest LNG importers globally to developers, to trading houses like Mitsubishi and Mitsui that are involved in some of the biggest, baddest oil and gas projects globally, to the big Japanese megabanks, SMBC, Mizuho, and MUFG; they're some of the top financiers for fossil fuels globally.

Host (09:36): Going back to my earlier point about the meeting that happened in Sapporo recently between energy ministers, perhaps we can go over the good news first, which is [that] there were some big commitments made there at that meeting by some energy ministers there. For example, they committed to a big increase in renewable energy. I'm just wondering what your reaction was to these commitments, and do you think, unlike last year, the G7 is showing more leadership on decarbonization and clean energy? 

Susanne Wong (10:10): It's critical that the G7 scale up support for renewables. It's so important for the global energy transition. At the same time, these commitments are absolutely undermined by the G7’s continuing support for fossil fuels. To be totally honest, the G7 has to show, has to do much, much more to show real climate leadership. It needs to end international public finance for fossil fuels without exception, needs to close the door to new investments and gas, and it has to commit to domestic coal phase-out by 2030. At the recent April ministerial meeting, they're still not agreeing on a timeline for coal phase-out, which seems almost like step one in the process of taking action to decarbonize electricity sectors and take real action on climate. In addition, they need to stop approving new licenses for oil and gas projects and new LNG infrastructure. 

One thing I just wanted to say is that the G7 claimed that it actually ended its international public finance for fossil fuels at the April ministerial, but it's honestly just a big lie. Japan approved a new gas project in Uzbekistan a couple of months ago. Italy approved financing for new oil and gas infrastructure in Brazil. We've talked about; they left the door open for more investments in gas; it isn't progress or climate leadership. Honestly, it doesn’t bode well with Japan at the helm of the G7 right now, backing LNG expansion, ammonia co-firing, and other dirty fossil technologies.

Host (12:01): How important is leadership on energy by the G7? I just wanted to drill down on that for a bit. How much do their decisions really affect the globe, and what kind of example do you think this sets for other countries in the globe? Say, for example, the G20 countries?

Susanne Wong (12:22): The G7 is, as you know, made up of the world's richest countries. They account for 40% of the world's economic activity and a quarter of global carbon emissions. They have an obligation to act unequivocally and with urgency to lead the global transition to renewable energy, and they're honestly wasting valuable time. The window to meet our climate goals is shrinking, and Japan, in particular, is headed in the opposite direction. The US is doing no better with its recent approval of the Willow Oil Drilling Project and the Alaska LNG terminal. 

What it comes down to is we all want and need a brighter future for our children where they can thrive, and those most responsible for the climate crisis, which is imperiling our communities and our planet, the onus is on them. So G7 governments have the biggest obligation to cut emission and their addiction to fossil fuels and take real action to help safeguard our future. 

Host (13:30): Awesome. And I just wanted to go over now the quote-unquote bad news from the meeting in Sapporo. There were a number of countries that were actually pushing for a coal phase-out by 2030, and if I remember correctly, the UK and Canada were two of those countries. But then there was pushback on this idea by countries like Japan. I mean, the language that they agreed on at the end was what many people are saying watered down, where they settled on, quote, concrete and timely steps in accelerating domestic unabated coal power generation, unquote. I was just wondering what your reaction to this whole fiasco is, and is that a letdown compared to an agreement on a total phase-out?

Susanne Wong (14:28): Yeah, it's a massive letdown. It's a failure of leadership, simply. The science is crystal clear and has been for years and years, like we need to end our reliance on fossil fuels, and it includes phasing out coal. The fact that the richest countries, it's been very clear that the richest countries need to do it by 2030, and yet the clock is ticking, and they can't even commit to a concrete timeline, and are still in many cases, just beholden to the coal industry. 

One thing to point out is that the UK is a really positive model. Coal accounted for 40% of [the] UK's power generation in 2012, and in less than ten years, they dropped it to less than 2%. It was less than 2% in 2020. So Japan is actually resisting all efforts to end coal, and yet there's that new report that I mentioned showing how Japan can largely decarbonize its power sector by 2035 and end coal. There are actually realistic and reasonable pathways to achieve this. Japan, like we've talked about, its resistance is based on these entrenched corporate interests that are dominating government policies on energy and climate, and they're really launching this massive PR push right now to convince; I was thinking it's kind of like they're trying to convince governments that essentially the earth is flat, that fossils aren't actually the primary cause behind the climate crisis and we have to keep using them. It's honestly a big scam. 

Host (16:16): Now if we take into context the UK's experience, how is Japan really justifying this push of what could be akin to a stagnation of progress on clean energy? 

Susanne Wong (16:29): Yeah, I agree. I feel like it's the case in kind of country after country, where the kind of fossil fuel interests and the ministries and governments that regulate them are one and the same, and where there is, like you say, this revolving door. In the case of Japan, I think Japan feels like it lost the race on renewables and doesn't have the renewable technology to offer to other countries. So it's basically out there, but it figures that they've been importing LNG for decades. So their companies have this kind of expertise in gas and LNG. They're kind of out there trying to promote gas and fossil-based technologies. They're doing it around the world, and they're promoting them as green, but I think it's basically just them kind of pedaling these technologies and trying to shine up the same dirty technologies and push them out as like forward-looking technologies of the future when it's the same dirty technologies that got us into this mess in the first place.

Host (17:43): This reminds me of many of the justifications for this being thrown around. For example, I mean, not just to single out Japan now, but in the US, energy security has been a big factor in that new exploration in Alaska that's just been approved. Then, of course, Japan has also cited energy security as a means to continue, or at least in their case, wanting to push an agenda that basically puts forward fossil fuels as kind of what they're calling a temporary solution to energy security. I'm just wondering what your reaction is to these ideas of energy security, and do they hold much weight? Do these arguments hold much weight? 

Susanne Wong (18:40): It's a really good question, and it's gonna be top of the agenda in Hiroshima, the G7. The thing is that the International Energy Agency has actually said very clearly, that the reason for the energy and climate crisis kind of worsening is actually because of the slow transition to renewable energy. It's quite clear that the path towards energy security is paved with renewables and yet, and that means no new oil and gas fields, no new LNG infrastructure. I think the war has revealed the risks of relying on expensive, imported fossil fuels. Some countries were priced out of LNG after the war happened, and what happened is there've been predictions that they actually can't afford to buy any new cargos, any kind of long-term cargos. Bangladesh is a really good example. Their reliance on imported fossil fuels has been to the detriment of people in the country. There was an article that was out a few months back that said that Bangladesh would actually face rolling blackouts because they couldn't afford to purchase LNG cargos. I think they might have had one recently, but clearly, this is one example showing that reliance on imported LNG is not a path towards energy security or stability. 

Host (20:15): I think there's a bit of irony in this where you have countries citing energy security, but then you have examples like Bangladesh, which are clearly not the ideal situation for any country to have in terms of, you know, relying on one source of fuel or an energy resource too much, and then it actually works against your best interests in terms of energy security. I think there's a bit of a justice issue here too, where you have richer countries that can afford to pay higher prices for this infrastructure that they've already got, and then you have a country like Bangladesh, who is one of the poorest countries in the world. So what do you make of that? Is there a fundamental unfairness in what's happening in the world right now? 

Susanne Wong (21:10): Yeah, it's really insidious kind of what's going on, like we mentioned the case of Bangladesh. At the same time that Bangladesh is facing this crisis and countries around the world were facing this crisis over expensive imported LNG, Japan was actually working to kind of hook these countries into greater reliance on imported LNG and ammonia and more. Japan is actually writing the power master plan for Bangladesh and actually the decarbonization plan for Indonesia. And all of these plans shamelessly back the need for Japanese fossil technologies and underplay the importance of developing renewables. There's groups like CLEAN [in] Bangladesh and WALHI in Indonesia that have called Japan out for playing down the importance of renewable energy in these plans. Japan is really working overtime to derail the energy transition, and they're using this banner of energy security when it's not in the interests of these host countries at all.

Host (22:26): Now they have, for example, at that recent meeting in Sapporo, they have said that gas investments would, quote, meet climate objectives without creating lock-in effects, unquote. Can we take that seriously? Is that an accurate description of what is in store for the world? Especially in regards to, as you just mentioned, countries like Bangladesh and Indonesia?

Susanne Wong (22:57): You know, it's so problematic, it's so infuriating. There's no room in terms of emissions to lock in new gas, oil and coal infrastructure. If we're actually going to mitigate and avoid the very worst impacts of the climate crisis. At the same time, these gas projects actually required to go forward. A lot of the importing, gas import terminals, they rely on 20 year contracts. So in order to be economically and financially viable, they have to kind of sign these really long-term deals to make it viable, and so that the developers will get their money back and achieve enough for return. So the idea that these projects won't require lock-in, have lock-in effects, is just kind of very misleading. 

Host (23:51): Let's stick on the topic of Japan and the overseas issues. So now there's this new policy that they've just put out called the Green Transformation, otherwise known as GX. There's been a lot of talk about how this will affect developing countries in Southeast Asia, like Thailand, Vietnam, and the Philippines. Could you tell us a little bit about what GX plans to do or what it's purported to do and how it will do this? 

Susanne Wong (24:26): As you said, Japan recently approved its GX strategy or its so-called green transformation policy that is anything but green. This new strategy is an exercise in greenwashing that, as we've been talking about, purely benefits Japanese corporate interests. The strategy relies heavily on fossil fuels, so it's fossil-based technologies, including LNG, the co-firing of ammonia at coal power plants, hydrogen, and carbon capture and storage. These technologies would prolong the use of fossil fuels at a time when we must urgently phase them out and when renewable energy is actually cheaper, reliable, and available. One of the big concerns is that Japan's using its diplomatic might to promote these dirty technologies at the G7 and also at ASEAN. In fact, this year is Japan and ASEAN’s 50th anniversary of cooperation. So there's a summit planned in December where it's likely that Japan will continue to promote these technologies. They've also convened this Asia Zero Emissions Community Initiative to basically build some more support and demand for these technologies. They're both selling the technology but kind of manufacturing the demand from governments across Southeast Asia.

Host (25:56): What's the reaction been? If you can comment on the reaction in Southeast Asia? Are government's quite receptive to this plan or has there been some questioning, or any pushback?

Susanne Wong (26:08): There were a slew of deals that were signed in March around the Asian Zero Emissions Community ministerial that Japan organized. I think there's not a lot of understanding about these technologies and the impact they'll have in terms of the transition. So it's really critical to share more information about the risks that these pose. There's, you know, the richest governments have an obligation to provide climate finance to help countries in the global south transition, and they're wasting these funds on technologies that will likely end up being uneconomic or end up as stranded assets. They're also wasting time as well as capital and money by advancing these projects. I think it's really critical to kind of get that message out and for governments to understand the risks that Japan is imposing on them. 

Host (27:10): Do you see the GX affecting, for example, a country like Vietnam has seen really great progress in terms of clean energy. Do you see a policy like GX potentially derailing this progress that's been made? 

Susanne Wong (27:25): Oh, absolutely. I think Vietnam is a really good case. There's been a significant delay in finalizing the latest power development plan, and I think it's because, from what I've seen from recent news clippings, is that leaders are concerned because they've actually committed to reach net zero, I think by 2050. And so they're actually realizing that they're actually trying to look at the math and the science to see what level their emissions need to be at and trying to reconcile that with their power mix by 2030. It's caused, I think, a lot of delay because they're looking at how to actually support grid development and renewables in order to meet those targets. I think they're doing the deliberate planning and taking pause from business as usual to actually meet their climate objectives. It's something that Japan should take note of, and actually, all the companies that are wanting to invest and push fossil fuels in countries like Vietnam, because it poses a huge risk. Japanese business interests are kind of banking on the fact that countries across Southeast Asia and globally will be receptive to these strategies. But the thing is, as climate policies change within each country, I think there's a huge risk that these projects will end up being stranded or abandoned. I think it's not only risky for our climate and for the host countries, but also for Japan and its corporate backers. 

Host (29:11): Going back to the G7, has there been any chatter from G7 countries regarding Japan's GX policy? 

Susanne Wong (29:21): Yeah, thankfully, the UK, the US, and Canada pushed back against Japan's dirty energy plans, including the push for ammonia co-firing. Apparently it caught the source of heated discussions leading up to the ministerial and so it was really significant. I think Japan was looking to the G7 to endorse its fossil based technologies and there is significant resistance, which is a relief, to be honest. But they actually carved out this loophole on gas investments, which is really concerning. In addition, the Japanese government and media have been interpreting the kind of tepid mention of ammonia co-firing in the G7 communique as an explicit endorsement by the G7 of Japan's energy strategy, which is very concerning. They're spinning it as if the G7 is backing their plans when that's far from the truth.

Host (30:26): Great. I just had one last question before we go. I know this is probably a big question, but what would you like to see happen at the G7? And also, of course, this will lead into other conferences like the G20 and also importantly COP28 in Dubai, later on this year. What does an ideal scenario look like for you? 

Susanne Wong (30:52): Thanks so much for asking. What the G7 really needs to do and as energy security will be at the top of the agenda, and Japan will continue to push these dirty technologies at the G7, there needs to be clear action to end international public finance for fossil fuels. Full stop, no exception. That is a significant move that the G7 countries need to make to show the climate leadership that is desperately needed and that, like I mentioned, is an obligation as the countries that are most responsible for the climate crisis to end financing of fossil fuels. They need to close the loopholes on new gas investments. We heard that Japan is going to continue to push for exceptions around gas, they need to close this door. It's really critical, especially since they're saying that this G7 will set the tone for like you say, the different international events that are happening and leading up to COP in UAE, which is a huge concern given that it's a major oil and gas producing country. 

It's honestly not voting well, but I just wanted to end with one bright light. There is a movement that is growing, that is strengthening against gas expansion. There's the Don't Gas Africa movement that started, I think last year, the Asian People's Movement on Debt and Development and partner groups launched the Don’t Gas Asia campaign just last week, and they're demanding a just and equitable transition to renewable energy. This movement will only continue to grow in power and strength, and it's critical to the G7 heed to their call. 

Host (32:50): Awesome, Susanne. I just wanna say again, thank you so much for coming on and offering your insights and thoughts on this really important matter. I was just wondering, before you go, if you could share where we can find you or where we can follow you or where we can follow your organization's work.

Susanne Wong (33:12): Thanks so much. I encourage the listeners to visit our coalition webpage, fossilfreejapan.org. We're actually organizing a global week of action leading up to the G7, and there's already probably more than 20 actions planned in, maybe, 15 or so countries. The list is growing. There’s actions planned from Bangladesh to the Philippines, to the US and UK and even Australia, where you are. I encourage folks to follow along, help amplify, and find out what they can do to help stop Japan's dirty energy strategy.