Japan expects the G7 ministerial meeting in April to consider ways to stabilize global oil and LNG markets, while addressing issues of energy security and decarbonization in the wake of Russia's invasion of Ukraine, a top government official told S&P Global Commodity Insights Jan. 6.
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Japan takes the presidency of the G7 -- Canada, France, Germany, Italy, Japan, the UK, and the US -- in 2023, with the G7 Ministers' Meeting on Climate, Energy and Environment taking place in Sapporo over April 15-16 amid a series of energy security challenges, while facing the need to make progress toward carbon neutrality.
"We believe it is important to address issues of decarbonization and energy security -- two sides of the same issues -- and discuss the issues squarely at this G7 ministerial meeting," Minami said in an interview.
"To discuss both issues, we believe assurance of energy security is a premise for proceeding decarbonization firmly," he said, adding that stable supplies of oil and gas with an "affordable price" will be key for stabilizing the global economy.
Means to secure a sufficient oil and gas supply capacity globally will be discussed at the G7 meeting as part of possible measures to stabilize the markets following insufficient oil and gas upstream investments after 2015 on the heels of accelerated moves toward decarbonization and low energy prices, he added.
Japan also intends to bring up the importance of LNG as transition energy at the G7 meeting, where it also plans to discuss the role of LNG in energy transition with such decarbonizing solutions as carbon capture and storage, as well as using gas as feedstocks for producing hydrogen and ammonia, Minami said.
In the face of increasing use of coal in some countries as a result of gas shortages as a consequence of situations surrounding Ukraine, prospective discussions at the G7 meeting will likely be more reflective of actual circumstances faced by each country, Minami said.
"In this context, our country will raise needs of upstream investments and investment for LNG facilities," he said.
US LNG
Aside from the G7 meeting, Tokyo intends to bolster its energy security ties with Washington following the Dec. 1 launch of the Japan-US energy security dialogue, the first of its kind between the ANRE and the Department of State, Minami said.
To address the impacts of Russia's invasion of Ukraine on energy markets, the US and Japan intend to diversify global LNG markets and increase resilience against short term disruptions as countries move away from unabated fossil fuels and toward a sustainable net-zero future, according to a joint statement.
At the launch meeting, Japan and the US discussed the need for diverse and secure supplies of energy, noting support for upstream investment in the US to enhance energy security, according to the joint statement.
"After all, it is Japan's principle to give serious consideration for importing [LNG] from the US, which is politically extremely stable, as part of its efforts to diversify supply sources," said Minami, adding that US LNG supply accounts for about 10% of Japan's LNG imports.
The Japanese government intends to provide financial support in the event of such needs as building LNG terminals in the US, he added.
Asia decarbonization
In Asia, which accounts for more than half of the global CO2 emissions, Japan has been working to develop the Asia Zero Emission Community, or AZEC as a practical platform to help accelerate energy transition in the region.
In its latest move, Japan intends to launch the AZEC ministerial meeting on March 4 in Tokyo, with expected attendance of energy ministers from the Association of Southeast Asian Nations, or ASEAN, Minami said.
"Japan is considering providing supports in the area of finance, technology and human resources to partner countries for the AZEC in its coordinated policy efforts toward decarbonization," Minami said.
The meeting, which will be chaired by METI minister Yasutoshi Nishimura, comes after Japan and Indonesia announced an initiative to realize the AZEC on the sidelines of the G20 Summit in Bali on Nov. 14 and invited other regional countries to join the initiative.
Asian countries will work toward "realizing a clean, sustainable, just, affordable, and inclusive energy transitions while taking into account different national circumstances," according to a joint announcement.
Under the AZEC cooperation framework, Japan said then it would assist Indonesia in its energy transition by mobilizing resources and funding from Japanese public institutions.