[Joint Statement] NGOs call on Japan to end overseas public finance for fossil fuels including Indramayu and Matarbari 2 coal plants, at G7 Summit (2021/6/7)

Joint Statement:
NGOs call on Japan to end overseas public finance for fossil fuels including Indramayu and Matarbari 2 coal plants, at G7 Summit

※　After the announcement on June 7, the number of supporting organizations has increased with the addition of signatures from 4 organizations: NRDC (USA), FoE US (USA), Jubilee (Australia), and The Law and Policy of Sustainable Development Research Center (Vietnam). There are 39 organizations in 14 countries in total.

On June 11 - 13, leaders will gather for the G7 summit in Cornwall, UK to discuss policy priorities, including “tackling climate change and preserving the planet’s biodiversity (*1)”. We, as 39 organizations from 14 countries, call on the Japanese government to take strong climate leadership at the G7 Summit and commit to ending public financing for all fossil fuel projects, including the Indramayu coal-fired power plant project (Indramayu) in Indonesia and the Matarbari coal-fired power plant Phase 2 project (Matarbari 2) in Bangladesh, which the Japan International Cooperation Agency (JICA) is expected to support.

According to the “Net Zero by 2050, A Roadmap for the Global Energy Sector” report published by the International Energy Agency (IEA) on May 18, 2021, “beyond projects already committed as of 2021, there are no new oil and gas fields approved for development” in IEA’s pathway to net-zero by 2050 and “no new coal mines or mine extensions are required” (*2). With regard to the electricity sector, IEA states that in its net-zero emissions scenario, “CO2 emissions from electricity generation fall to zero in aggregate in advanced economies in the 2030s”, and “in emerging market and developing economies around 2040” (*3). Therefore, supporting new fossil fuel-based power generation is inconsistent with the goals to achieve net-zero emissions by 2050.

Coming on the heels of the ground shifting IEA report, G7 Climate and Environment Ministers issued a joint communiqué on May 21 agreeing to stop new international financing of “unabated” coal projects by the end of this year and “phase out new direct government support for carbon-intensive international fossil fuel energy, except in limited circumstances” (*4). While this is a positive step, the climate crisis requires that G7 governments immediately stop financing all fossil fuel projects, including oil and gas, if we are to reach our critical climate goals.

Even if the policy on ending public finance for all coal-fired power plants is announced, we are deeply concerned that Japan will continue supporting Indramayu and Matarbari 2. Therefore, as a concrete step, we urge the Japanese government to immediately announce that it will no longer support these two overseas coal-fired power projects.

Japan’s continued support for fossil fuels is undermining countries’ efforts to transition to clean energy. For example, the Japanese government is planning to finance Indramayu despite Indonesia’s plans to stop building new coal-fired power plants after 2023 in order to meet its carbon-neutral goals (*5). In February 2021, the Bangladesh government decided to drop nine new coal-fired power plants, with a combined power capacity of 7,461 MW, due to rising costs of imported coal and a decrease in financial support from overseas investors (*6). Still, the Japanese government is planning to finance Matarbari 2. At the same time, China’s embassy to Bangladesh informed the local Ministry of Finance in a letter that “the Chinese side shall no longer consider projects with high pollution and high energy consumption, such as coal mining [and] coal-fired power stations (*7).” Indramayu and Matarbari 2 are already facing serious problems, including inconsistency with the Paris Agreement, an overcapacity of power in both countries, the lack of economic justification due to the ever-falling costs of renewable energy, environmental pollution at the proposed sites, and human rights violations affecting local residents.

In addition, both projects do not comply with JICA’s “Guidelines for Environmental and Social Considerations.” In Indonesia, local farmers have strongly opposed the Indramayu project for more than 5 years as the project will destroy residents’ livelihood and aggravate air pollution. This clearly shows a lack of “social acceptability” in the project as one of the requirements of JICA’s Guidelines. Several farmers who voiced opposition to the project experienced serious human rights violations as they were unlawfully arrested for fabricated crimes and were imprisoned for five to six months (*8). In Bangladesh, the construction of an access road has caused a river to fill up due to the dumping of dredged soil, leading to further loss of livelihoods for local fishermen who rely on the river, which is an impact that was not estimated in the environmental impact assessment report (*9).

The climate emergency and COVID-19 pandemic have revealed that our global health and well-being are intricately tied together. We cannot afford for the Japanese government to impede the critical climate action we desperately need. For these reasons, we call on the Japanese government to take strong climate leadership at the G7 Summit and commit to ending public financing for all fossil fuel projects, including the Indramayu and Matarbari 2 coal-fired plants.