National

Environment Minister Koizumi breaks ranks on Japan's financing of Vietnam coal plant

Kyodo, Staff Report

Environment Minister Shinjiro Koizumi on Tuesday spoke out against a coal-fired power plant project in Vietnam, calling into question the government’s planned financial support for the project amid a rising global outcry from climate activists.

Dozens of nongovernmental organizations are calling on the Japan Bank for International Cooperation (JBIC) not to finance the 1.2 gigawatt Vung Ang 2 plant project led by Mitsubishi Corp.

JBIC and Japan’s megabanks are considering financing the $2.2 billion (¥242 billion) project, and construction is slated to be conducted by Chinese and U.S. firms.

Koizumi said the government’s support of overseas financial assistance has been conducted amid concerns that the global market could be dominated by China unless Japan plays a more active role. He added that he found it odd Japan was financing the project but that Chinese and U.S. firms would be in charge of construction.

The government’s long-standing policy has been to finance coal projects in developing countries if four criteria are met, including if the country requests the introduction of state-of-the-art coal-fired units.

Koizumi does not have veto power on the project, but his comments place support for the project in question amid heightened criticism of coal power by the international community. Koizumi’s opposition could lead to a possible disagreement among Cabinet members.

“It would be hard for this project to gain acceptance from Japanese citizens and the international community,” he told reporters at a regular news conference. “I want to change Japan’s policy so that it will make a contribution to decarbonization.”

Mitsubishi Corp. declined to comment on specific projects but added that it no longer plans to work on new coal plant projects in the future, except for those already in development.

Climate activists, who object to the project and say that it will result in a large volume of carbon emissions for an extended period of time, hailed Koizumi’s comments.

FoE Japan (a member of Friends of the Earth International) and other environmental groups wrote in a joint statement that they welcome Koizumi casting doubt on public assistance for coal projects, and call on the government and private sector to withdraw from coal investment and financing as soon as possible.

The joint statement added that Japan ranks second in the world for its public financing of coal power, with Japan’s three megabanks ranking as the top three financiers for projects between 2017 and 2019.

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