This report reveals that Japanese public financial institutions, including the Japan Bank for International Cooperation (JBIC), Japan Organization for Metals and Energy Security (JOGMEC), Nippon Export and Investment Insurance (NEXI), Japan International Cooperation Agency (JICA), and Development Bank of Japan (DBJ), provided a staggering $93 billion in public financing for these projects over the past decade (from March 2013 to March 2024). This amount is four times larger than the $24.5 billion allocated to clean energy projects during the same period. Despite Japan's 2022 G7 commitment to end fossil fuel financing, the report highlights a troubling increase in such financing in 2023, revealing a significant gap between Japan's policy commitments and its financial actions.

JBIC is the largest financier, responsible for 55% of the total public finance for overseas oil and gas projects. The analysis also shows that financing for gas-only projects, standing at $56 billion (60%), significantly exceeded the $26 billion (28%) allocated to oil projects. A substantial 45% of the funds were directed toward upstream investments, which promote the extraction and processing of fossil fuels, with Mozambique emerging as the top recipient country due to financing for the Rovuma Area 1 LNG project, currently delayed due to insurgency in the area.

Japan’s continued upstream project investments, especially at a time of decreasing domestic gas demand, suggest that downstream investments creating demand for gas in Asia are likely to increase in the coming years. In line with Japan’s Green Transition (GX) and Asia Zero Emissions Community (AZEC) initiatives, this approach centers on maintaining Japan’s LNG trading scale, driving the country to offload its excess LNG to regional markets in South and Southeast Asia, thereby continuing to promote fossil fuel reliance. The report also identifies Mitsui & Co., Mitsubishi Corporation, and JERA as the leading Japanese entities receiving gas-related financing.

These findings underscore that Japan’s continued support for fossil fuels not only undermines climate action and harms local communities but also heightens the risk of stranded assets and damages the country's international reputation as renewable energy becomes more cost-effective. 

Policy Recommendation

• Announce restrictions on all global oil and gas financing, including for projects set to use dangerous distractions such as CCS and hydrogen, and instead increasing financing for renewable energy projects.

• Participate in and lead diplomatic efforts to establish a joint commitment among OECD countries on ending oil and gas export finance.

• Ensure transparent disclosure of financing amounts for energy-related projects.

By addressing these critical issues, the report aims to redirect Japan's financial resources toward more sustainable and climate-friendly investments, contributing to global efforts to mitigate the climate crisis.