Japan is one of the largest fossil fuel financiers outside the country. Some $11 billion a year goes into financing fossil fuels abroad, mainly oil and gas. So far, Japan does not intend to change course and continue funding, making it the only G7 country to stay the course.
At the COP26 summit last year, all G7 countries except Japan had committed to the financing agreement. However, various activists on the ground would see Japan’s shift of direction as a welcome move, as the money could be used for renewable energy instead of $11 billion in fossil fuel financing.
However, a look at Japan’s energy mix makes it clear that this is not so easy to realize. About 67% of Japan’s electricity is generated with fossil fuels. Of this, 31.6% is coal, 31.6% gas, and 4% oil. After Fukushima, nuclear power plants were reduced to a minimum and now account for only 6%.
This is exactly what makes the plight of Japan visible because simply changing the financing would have a huge impact on the economy in Japan. In order to start this change, Japan now wants to start up the nuclear power plants again.
Japan’s Prime Minister Fumio Kishida has promised concrete steps that Japan will take to bring shut down nuclear power plants back online, but he is not talking about new power plants. He also stated that Japan will gradually shut down inefficient coal-fired power plants by 2030 and replace them with carbon-free thermal power plants. Coal-fired power plants account for about 31.6% of Japan’s electricity, as do gas-fired power plants.
Therefore, if decarbonization is a priority, gas-fired power plants must also be taken off the grid. Nuclear power can fill the gaps as a clean and reliable energy source, but new investments are needed. However, a look at Japanese energy policy shows that the transformation will face major hurdles.