NO CLEAR EXIT: Japan’s resistance to a real coal phaseout

Japan is the only G7 country without a clear coal phaseout deadline, with coal accounting for nearly one-third of its electricity generation as of 2023. The Japanese government is promoting 'next-generation' technologies, specifically carbon capture and storage (CCS) and ammonia co-firing, which the report characterizes as 'false solutions' due to their high cost and limited effectiveness. These policies are supported by market mechanisms like the Capacity Market and the Long-Term Decarbonization Power Source Auction, which incentivize the continued operation of coal plants. Furthermore, Japan's three megabanks—Mizuho, MUFG, and SMBC—provided US$23.5 billion in coal financing between 2021 and 2023, often utilizing loopholes that exclude only new clients. The report also highlights the Asia Zero Emission Community (AZEC) initiative, noting that 35% of its 158 agreements involve fossil fuels, potentially locking Southeast Asian nations into outdated energy systems.

• Japan is the only G7 nation lacking a coal phaseout plan or a specific deadline, with coal providing approximately 29% of its total electricity generation in 2023.
• The Japanese government promotes carbon capture and storage (CCS) and ammonia co-firing as climate solutions, despite these technologies being criticized for lack of financial viability and limited effectiveness in reducing emissions.
• Between 2021 and 2023, Japanese banks provided US$23.5 billion in coal financing, with 80% of this amount coming from the three megabanks: Mizuho Financial Group (US$8.1 billion), Mitsubishi UFJ Financial Group (US$6.1 billion), and Sumitomo Mitsui Banking Corporation (US$4.7 billion).
• Market mechanisms in Japan, such as the Capacity Market and the Long-Term Decarbonization Power Source Auction, create financial incentives that discourage the closure of coal plants.
• Japan's Asia Zero Emission Community (AZEC) initiative risks locking Southeast Asian partners into polluting energy systems, as 35% of its 158 agreements involve fossil fuels, including co-firing projects in Thailand, Indonesia, and Malaysia.
• The coal policies of Japanese megabanks contain loopholes, such as only excluding 'new clients' or those whose 'primary' business is coal, allowing continued financing for existing clients and diversified corporations like Glencore.

APA

Koh, D., Momoi, T., Gach, E., McCully, P., Pinson, L., Gueguen, G., Louvel, Y., & Rocamora, C. (2024). NO CLEAR EXIT: Japan’s resistance to a real coal phaseout. Reclaim Finance. https://reclaimfinance.org/site/wp-content/uploads/2024/10/No-Clear-Exit-Japans-resistance-to-a-real-coal-phaseout.pdf

Chicago

Koh, Danielle, Takako Momoi, Evan Gach, Patrick McCully, Lucie Pinson, Gwenn Gueguen, Yann Louvel, and Cynthia Rocamora. NO CLEAR EXIT: Japan’s resistance to a real coal phaseout. Reclaim Finance, 2024. https://reclaimfinance.org/site/wp-content/uploads/2024/10/No-Clear-Exit-Japans-resistance-to-a-real-coal-phaseout.pdf.

Wikipedia

{{cite report |last1=Koh |first1=Danielle |last2=Momoi |first2=Takako |last3=Gach |first3=Evan |last4=McCully |first4=Patrick |last5=Pinson |first5=Lucie |last6=Gueguen |first6=Gwenn |last7=Louvel |first7=Yann |last8=Rocamora |first8=Cynthia |title=NO CLEAR EXIT: Japan’s resistance to a real coal phaseout |publisher=Reclaim Finance |date=November 2024 |url=https://reclaimfinance.org/site/wp-content/uploads/2024/10/No-Clear-Exit-Japans-resistance-to-a-real-coal-phaseout.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{koh2024clear, author = {Koh, Danielle and Momoi, Takako and Gach, Evan and McCully, Patrick and Pinson, Lucie and Gueguen, Gwenn and Louvel, Yann and Rocamora, Cynthia}, title = {{NO CLEAR EXIT: Japan’s resistance to a real coal phaseout}}, institution = {Reclaim Finance}, year = {2024}, month = nov, url = {https://reclaimfinance.org/site/wp-content/uploads/2024/10/No-Clear-Exit-Japans-resistance-to-a-real-coal-phaseout.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }