Growing climate change risks and plummeting prices due to the COVID-19 pandemic are threatening Japanese banks and public agencies’ investments in various LNG projects which reached $23.4 billion, according to a study by Global Energy Monitor (GEM). The investments include loans and support in more than 20 LNG terminals, tankers, and pipelines in ten countries. The study said 14 more LNG terminals in 11 countries are in line for Japanese investments.
Japan’s energy security drive has boosted investments in LNG projects since the 2011 Fukushima disaster which shut many of its nuclear reactors. Japan is the world’s largest LNG importer, producing 40% of its electricity by burning gas from LNG. However, imports are in long-term decline thanks to growing competition from renewables and energy storage which are getting cheaper.
Responding to the report, Japanese lenders said they had adopted new policies which tighten support to fossil fuel projects. They have also become big lenders for renewable energy infrastructure. The climate risks have also forced oil majors such as Shell and Shell to write off billions of dollars of their gas and oil assets values.
