Out-Law News | 25 Jun 2021 | 2:49 am | 1 min. read
The Japanese government has committed $10 billion to finance the decarbonisation of projects in Southeast Asia.
The projects include renewable energy, energy-saving, liquefied natural gas (LNG), and conversion of coal-fired power plants to gas-fired.
Japan's Ministry of Economy, Trade and Industry (METI) proposed that the Asia Energy Transition Initiative (AETI) would support the energy transition in the region. AETI will provide financial support, technology development, deployment, and human resources development, said a joint statement.
The proposed transition plan includes the expansion of multilateral power trading, the development of common ASEAN gas market, the optimisation of clean coal technology and carbon capture, utilisation and storage (CCUS), enhancing energy efficiency, speeding up renewable energy deployment, advancing regional energy policy and planning and the development of human resource capacity and capability on nuclear energy.
Infrastructure expert John Yeap of Pinsent Masons, the law firm behind Out-Law, said: “This support from the Japanese government is to be welcomed and is interesting on several levels. It recognises developed regional economies have a role to play in enabling the entire Asian region to decarbonise. Developing economies continue to face affordability challenges, and decarbonisation is an added cost that some of these economies may find difficult to finance.”
“Perhaps more interestingly, the policy appears to support gas as well as clean coal technology, both of which would fall outside green taxonomy of not just western nations within the EU, but China’s own recently amended catalogue. This aspect of the policy appears to indicate an acceptance that decarbonisation in certain regions within ASEAN will continue to see gas as a transition fuel, and perhaps clean coal technology should it become possible for it to commercialised,” he said.
It is reported that Japan’s financial support will be in form of lending and investments from its public and private sector.
According to Reuters, METI minister Hiroshi Kajiyama considered the AETI “as a package of Japanese support for realistic transitions in Asia towards carbon neutrality”.
Japan in 2020 set its aim to become carbon-neutral by 2050 and put it on the same timeline within the European Union (EU).