Japanese financial institutions and energy companies continue to move away from supporting coal-fired power generation, as the country’s leadership reiterates what it says is an “unwavering resolve to decarbonize.” Several of the country’s investment banks and other financial institutions have signaled their unwillingness to continue support of coal projects, and energy major Mitsubishi in late February said it is pulling out of the $2 billion, 2-GW coal-fired Vinh Tan 3 power plant project in Vietnam, marking its first exit from a coal project. Mitsui & Co. has told Indonesian officials it plans to sell its stake in Paiton Energy, an independent power producer in Indonesia that operates coal-fired plants.
Japan has been criticized for continuing to give state support to export coal-fired power plants in the form of loans from the Japan Bank for International Cooperation (JBIC). Japan in July 2020 tightened its criteria for backing such projects, with government officials saying financial and other support would only be given to countries that are making efforts to reduce carbon emissions, and to those that must have coal-fired generation due to financial reasons. The stricter criteria, which include a numerical requirement for power generation efficacy, are included in a new government strategy regarding infrastructure exports for the five years from 2021. JBIC Gov. Tadashi Maeda in March said the state-run lender has no immediate plans to finance any new coal-fired power projects.
The U.S.-based Institute for Energy Economics and Financial Analysis has said more than 130 large banks and insurance companies worldwide have placed restrictions on coal-related investments. Japan’s move is an about-face for the country, whose public and private sectors for years encouraged the construction of new coal-fired power plants outside its borders, with officials saying it showed support for emerging economies.