Japan tightens state lending for overseas coal plants

It received criticisms in funding such plants in Indonesia and Vietnam.

The Japanese government said it will tighten state-backed financing criteria for overseas coal-fired power plants after facing criticism over its support for the dirtiest fossil fuel.

The move marks a partial shift away from Japan’s strong official backing for coal but includes exemptions, leaving some non-governmental organizations sceptical about how much impact the new approach will have.

“As a principle, the government will not provide assistance for new coal projects to those countries where Japan is not fully aware of the local energy situation and challenges or policies for decarbonisation,” the government said in a statement.

It has received criticism from many quarters over its support, usually through Japan’s export credit agency, for the construction of coal-fired plants in countries such as Indonesia and Vietnam, as well as new plants at home.

The government said it was “essential” to cut carbon emissions under the Paris Agreement to combat climate change, which is already affecting many countries including Japan.

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