Japan to impose ban on Russian coal imports following G-7 pledge: PM

Japan will impose a ban on coal imports as a part of extra sanctions towards Russia following the newest dedication by leaders of the G-7 nations, Prime Minister Fumio Kishida mentioned April 8, marking the nation’s first dedication to curb any commodity imports from Russia.

“We’ll scale back our dependency on Russia within the power sector by lowering the [coal] imports in phases in addition to shortly securing various options,” Kishida informed a press convention.

G-7 nations goal to expedite efforts to chop reliance on Russian power, together with phasing out and banning Russian coal imports and chopping Russian oil dependency, the leaders mentioned in a joint assertion April 7.

“Japan is not going to solely ban the coal imports but additionally step into lowering the Russian dependency in general power together with oil,” Kishida mentioned.

Russia was Japan’s third-largest coal provider in 2021 after Australia and Indonesia, importing 19.734 million mt of Russian coal in 2021, or 11% of the nation’s complete imports of 182.629 million mt, in accordance with finance ministry information.

Russia equipped 4% of Japan’s complete crude oil imports of two.48 million b/d in 2021, with the Center East supplying 92% of the inflows, the information confirmed.

“As a way to keep away from tightening energy provide and the demand steadiness in the summertime and winter, we intend to maximise our use of such energy sources as renewables and nuclear energy, that are additionally extremely efficient for power safety and decarbonization.”

Phasing out
The premier’s feedback come after Minister of Economic system, Commerce and Business Koichi Hagiuda mentioned earlier April 8 that Japan supposed to part out Russian coal imports with the last word goal of suspending them as a part of the G-7 pledge.

“Because the conditions surrounding power are completely different in accordance with every nation, we intend to part out [Russian coal imports] in phases,” Hagiuda informed a separate press convention.

“Our goal is to droop the imports in the end by lowering them as we discover various [supply] nations,” Hagiuda mentioned.

METI is presently surveying massive Japanese shoppers by firm and sector on their outlooks for Russian coal procurement subsequent winter with a view to avert any potential influence throughout the excessive demand season, Haguida mentioned.

As soon as Japanese corporations lower their coal imports from Russia, the federal government intends to reply by guaranteeing various sources of provide with a view to alleviate the influence on industries, he mentioned.

JERA, Japan’s largest energy era firm, mentioned that when the Russian coal import ban is in place, it plans to interchange its procurement of Russian coal, a part of its portfolio provide from its buying and selling arm JERA International Markets, with provides from different nations, an organization spokesperson mentioned.

Russia accounted for simply over 10% of JERA’s coal imports of round 20 million mt in fiscal 12 months 2020-21 (April-March).

For its half, Tohoku Electrical, which depends on Russia about 10% of the entire procurements, expects to have the ability to safe round two to 3 months of coal necessities, an organization spokesperson mentioned, including that it’s going to take into account various provide sources.

Suspending Russian coal
Kyushu Electrical, which doesn’t have any long-term coal provide contracts with Russia, has suspended its Russian coal procurement amid elevated uncertainty over procurement for secure energy provide and has began in search of various provides, an organization spokesperson mentioned.

Russia accounted for about 7% of Kyushu Electrical’s coal procurements of round 6.8 million mt in fiscal 12 months 2020-21.

Kansai Electrical, which additionally doesn’t have any long-term Russian coal provide contracts, has not had any Russian coal procurement offers since Russia’s invasion of Ukraine, an organization spokesperson mentioned.

Kansai Electrical’s Russian coal procurement is estimated at lower than 10% for its anticipated complete coal procurement of about 3.90 million mt in FY 2021-22, the spokesperson mentioned.

The G-7 leaders — representing Canada, France, Germany, Italy, Japan, the UK and the US — mentioned April 7 they might proceed working to “guarantee secure and sustainable world power provides, together with by accelerating discount of our general reliance on fossil fuels and our transition to wash power.”

Japan’s efforts to scale back its Russian power dependency will even contain diversifying its power sources by using renewables and nuclear energy, Hagiuda mentioned.

Whereas the G-7 leaders additionally dedicated banning new funding in key sectors of the Russian economic system, together with the power sector, Hagiuda mentioned Japan is not going to withdraw from the Sakhalin 1 and a couple of tasks and the Arctic LNG 2 challenge as these are usually not new funding tasks in addition to vital for the power safety.

Russia accounted for 9% of Japan’s complete LNG imports of 74.32 million mt because the fifth-largest provider in 2021, in accordance with finance ministry information.

Greater than half of the 9.6 million mt/12 months LNG manufacturing capability on the Sakhalin 2 challenge is dedicated to Japanese offtakers, and Sakhalin 2 LNG accounts for nearly all of Japan’s LNG imports from Russia.
Supply: Platts