Weighing short-term, long-term energy policy
Looking to support acquisition of upstream assets amid low oil price
Pushing for zero emissions in thermal power
Japan’s newly elected prime minister, Yoshihide Suga, has re-appointed Hiroshi Kajiyama as minister of economy, trade and industry, after the cabinet of former prime minister Shinzo Abe formally resigned, Chief Cabinet Secretary Katsunobu Kato said Sept. 16.
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This means Kajiyama will be at the helm of Japan’s de-facto energy ministry at a time when the country is seeking to square the circle of achieving an energy transition while meeting its energy needs.
In recent months, the coronavirus pandemic and slowing economy have caused Japan’s monthly crude oil imports to plunge to their lowest in more than half a century, while keeping demand for key refined products such as gasoline at multi-decade lows.
In a statement Sept. 16, Petroleum Association of Japan President Tsutomu Sugimori called on Suga to press ahead with robust measures against the coronavirus pandemic and to promote economic recovery.
Against the backdrop of plummeting domestic oil demand, the government intends to provide Japanese companies financial support via the state-owned Japan Oil, Gas and Metals National Corp. to acquire upstream assets, according to METI’s director general of oil, gas and mineral resources, Ryo Minami.
“This is of the utmost importance because we are in a situation where various companies are selling their non-strategic assets because of the low crude oil price,” Minami told S&P Global Platts in an interview Sept. 1.
“In the event of seeing strategic assets being put up for sale, Japan should acquire them with financial support from Jogmec as the private sector is in financial difficulty because of the low oil [price],” he added.
Minami also said that Japan’s push for “zero emissions in thermal power generation and zero-emission fuels” are among METI’s fuel policy priorities for fiscal 2020-21 (April-March).
METI Aug. 7 launched formal policy discussions on a regulatory framework to ensure the country phases out inefficient coal-fired power plants by 2030, with measures including limiting the new construction of inefficient plants.
The latest move followed a directive announced July 3 by Kajiyama to start drawing up a new, more effective framework to ensure the phasing out of inefficient coal-fired power plants by 2030 as part of Japan’s strategic energy plan.