GAMBLING ON GAS

Between January 2017 and June 2020, Japanese public and private institutions provided at least US$23.4 billion in financing for LNG infrastructure across 10 countries. The report argues that the original rationales for this policy—energy security, climate friendliness, and economic viability—are now flawed due to the vulnerability of supply chains exposed by COVID-19, the high global warming potential of methane leakages, and the declining costs of renewable energy. It highlights that major Japanese banks (MUFG, Mizuho, and SMBC) provided the bulk of this funding, while five major trading companies saw a combined year-on-year profit drop of US$625 million in LNG-related businesses by March 2020. The document concludes that continuing to fund LNG infrastructure risks creating stranded assets and contradicts the UN's Principles for Responsible Banking.

• From January 2017 to June 2020, Japanese public and private entities provided at least US$23.4 billion in financing for LNG infrastructure, including terminals, tankers, and pipelines across 10 countries. This total consists of US$5.0 billion from public institutions and US$18.4 billion from private institutions.
• Japanese private financiers dominated the funding, with the 'big three' multinational commercial banks—Mitsubishi UFJ Financial Group (MUFG), Mizuho, and Sumitomo Mitsui Banking Corporation (SMBC)—accounting for 65.7% of all public and private funding during the 2017–2020 period.
• The report argues that the energy security rationale for LNG is flawed, citing a period in late April 2020 where Japan reportedly had only a two-week stockpile of LNG due to COVID-19 disruptions.
• From a climate perspective, the report states that methane leakages in the supply chain and the energy required for liquefaction and transport negate the carbon dioxide advantages of gas over coal, meaning new infrastructure will worsen the climate crisis.
• Economic shifts have made renewables more competitive than gas; a 2019 Rocky Mountain Institute study found clean energy portfolios cheaper than 90% of proposed gas-fired power capacity in the US, and the IEA projected that offshore wind could meet Japan's total power demand by over ninefold by 2040.
• Five major Japanese trading companies—Itochu Corporation, Marubeni, Mitsubishi Corporation, Mitsui & Co., and Sojitz Corporation—experienced a combined year-on-year profit decrease of US$625 million in their LNG-related businesses for the fiscal year ending March 31, 2020.
• Japanese investments in US LNG projects were partially motivated by a desire to improve diplomatic relations with the Trump administration and address criticisms of Japan's trade surplus.
• Significant financial risks remain with approximately US$190 billion in capital outlays for over a dozen major LNG projects still under development or construction involving Japanese interests.

APA

Aitken, G., & Nace, T. (2020). GAMBLING ON GAS. Global Energy Monitor. https://globalenergymonitor.org/sites/default/files/migration/reports/JapanLNG_2020_r2_11.pdf

Chicago

Aitken, Greig, and Ted Nace. GAMBLING ON GAS. Global Energy Monitor, 2020. https://globalenergymonitor.org/sites/default/files/migration/reports/JapanLNG_2020_r2_11.pdf.

Wikipedia

{{cite report |last1=Aitken |first1=Greig |last2=Nace |first2=Ted |title=GAMBLING ON GAS |publisher=Global Energy Monitor |date=June 2020 |url=https://globalenergymonitor.org/sites/default/files/migration/reports/JapanLNG_2020_r2_11.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{aitken2020gambling, author = {Aitken, Greig and Nace, Ted}, title = {{GAMBLING ON GAS}}, institution = {Global Energy Monitor}, year = {2020}, month = jun, url = {https://globalenergymonitor.org/sites/default/files/migration/reports/JapanLNG_2020_r2_11.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }