Japan’S FOSSIL GAS expansion

Current as of: 13 October 2022

A new study looking across Bangladesh, Thailand and Vietnam, the sites of the three largest gas power project expansions (outside China), identifies the Japanese companies most actively pursuing a liquefied natural gas (LNG) buildout in Asia, putting the climate goals of the Paris Agreement in peril.

Japanese companies are collectively attempting to back 15 proposed LNG power projects that would add 33.2 GW of thermal power capacity. Beyond these power projects, 7 LNG import terminals and FSRUs are also proposed involving Japanese companies. JERA (a joint venture of TEPCO and Chubu Electric), Mitsubishi Corporation and SMBC Group, are among the worst offenders.

This buildout is being proposed despite the International Energy Agency (IEA)’s landmark scenario stating we need to stop adding fossil fuel supply if we are to achieve the goal of net-zero emissions globally by 2050, warning that much of the proposed and even existing LNG infrastructure risks becoming stranded.

Planned LNG projects involving Japanese companies  in Bangladesh, Thailand and Vietnam alone would counteract Japan’s 2030 Nationally Determined Contributions target more than three times over.

Japanese companies and the buildout of LNG power in Bangladesh, Thailand and Vietnam

Market Forces reviewed the LNG projects slated for Bangladesh, Thailand, and Vietnam, the countries with the three largest gas power project buildouts in Asia after China (according to the Global Energy Monitor’s (GEM) Asia Gas Plant Tracker (April 2022) based on capacity under construction and proposed).

Japan and the USA play a key role in the planned buildout of LNG projects in Bangladesh, Thailand and Vietnam. Of all foreign domiciled companies involved, one third of the proposed LNG to power capacity involves Japanese companies.

Of the Japanese companies, JERA (joint venture of TEPCO and Chubu Electric), Mitsubishi Corporation and SMBC Group are among the most heavily involved:

• JERA is involved in 5 proposed LNG to power projects totalling 11,600 MW in Bangladesh and Vietnam.
• Mitsubishi Corporation is involved in 1 proposed LNG power project totalling 1,500 MW in Vietnam (Table 1).
• JERA and Mitsubishi Corporation rank among the top Japanese companies in terms of MW capacity of proposed LNG to power projects (excluding those involved at the feasibility study level) (Table 1).
• JERA and Mitsubishi Corporation are also involved in, or expected to be involved in 4 proposed LNG terminals in Bangladesh and Vietnam (Table 2).
• SMBC Group is the only Japanese commercial bank with known involvement in proposed LNG power projects in Bangladesh and Vietnam at this stage. It is expected to be involved in funding 2 LNG projects in Vietnam with 3 GW capacity. SMBC is also the financial adviser of the 1.4 GW Pertamina LNG Power Plant proposed in Bangladesh. The only other known prospective lender from Japan is the public financial institution JBIC (Japan Bank for International Cooperation).

Table 1: Involvement of Japanese companies in proposed LNG to power projects

Table 2: Combined list of projects with JERA, Mitsubishi Corp and SMBC involvement

This buildout spells disaster for communities and climate

The lifecycle emissions from 15 proposed LNG power projects’ operating lifetime with all Japanese companies’ involvement (33.2 GW) is estimated to be 2.14 billion tonnes of CO2-e. This figure does not include projects where Japanese companies are involved at the environmental impact assessment and feasibility study stage.

This is more than three times the equivalent of Japan’s 2030 absolute emission reduction target under its nationally determined contributions (NDCs) towards achieving the goals of the Paris Agreement more than three times over [1].

JERA, Mitsubishi Corporation, SMBC Group and other companies need to live up to their commitments to net zero emissions by 2050, withdraw from these projects and ensure the communities in these countries get the same opportunity as wealthy countries to develop with clean and cheap renewable energy.

Local community members repairing their boats on the empty swathes of land set aside for Japan-backed LNG to power project proposed to be built in Matarbari, Bangladesh.
Photo credit: Market Forces