Asian Civil Society Organizations Warn European Leaders about the ‘Japanese Model’ of LNG Investment

London, UK – Today, during the International Energy Agency (IEA) Summit, 27 civil society organizations from 9 countries in Asia sent a letter to European Union (EU) decision-makers warning them not to follow the ‘Japanese Model’ of using public money to invest in LNG. 

The European Commission recently published their Affordable Energy Action Plan to tackle their current energy affordability crisis. The spirit behind the Affordable Energy Action Plan is laudable. However, the plan includes proposals to sign more long-term LNG contracts and to follow Japan’s “longstanding policy of supporting investments in export infrastructure in countries producing liquefied natural gas (LNG),” including in the United States. This will expose the EU to increased dependence on imports from unstable regimes, and will not lower energy prices for people. Instead, policymakers can best address energy security and affordability by doubling down on the EU’s ambition on energy efficiency and a just transition to 100% renewable energy, rather than adopt the expensive and risky ‘Japanese model.’ 

The letter’s signatories include frontline communities and allies impacted by Japanese financed gas and LNG projects, who have witnessed the harmful impacts of this model firsthand, and energy market analysts have clearly outlined that Europe would be similarly affected. In the letter, organisations warn that the ‘Japanese model’:  

• Undermines Asia’s energy security; 
• Leads to volatile energy prices exposing consumers to price spikes and instability;  
• Results in Japan selling its surplus contracted gas into spot markets sometimes at a  loss. Europe following this model risks major losses,;
• Blocks a just energy transition;
• Poured billions of dollars into fossil gas expansion and has left a legacy of harm around the world. 
• Will undermine Europe’s energy security and independence and add to the EU’s energy import bill. 
• Would conflict with European climate goals by locking in long-term fossil fuel infrastructure.

The EU Commission should heed the warnings from the Asian organizations with experience with the Japanese model. The only path for the EU to true energy independence and security is to rapidly wind down and ultimately end its reliance on fossil fuel imports, from anywhere. Doing so will save the EU billions, build a resilient economy, and ensure Europe’s long-term energy security for all by accelerating a just transition towards renewables. 

In response: 

Laurie van der Burg, Campaign Manager Global Public Finance at Oil Change International, said:

“Instead of bowing to Trump’s bullying, the EU should listen to civil society in Asia who have seen firsthand the damage caused by Japan’s public financing for overseas LNG investments and long-term fossil gas contracts. LNG hasn’t delivered energy security or affordability, instead it has caused blackouts, rising debts and devastating climate and health impacts. The EU is already saving billions by cutting gas imports through renewable energy and energy efficiency. As it phases out Russian gas, it must stay on course and avoid increasing reliance on imports from yet another unstable regime. The only guarantee for Europe’s energy security, independence and affordability for all is a just transition to renewables.”

Ayumi Fukakusa, Executive Director, Friends of the Earth Japan, said: 

“Japan has left a global legacy of harm with its LNG finance – harming communities, undermining energy security and worsening the climate crisis. They make the harm even worse by reselling an excessive volume of LNG as domestic demand is declining. The EU should heed the lessons from Japan’s experience and reject the “Japanese model” for financing LNG and instead support the rapid and just energy transition.”

Mr. Hasan Mehedi, Chief Executive, Coastal Livelihood and Environmental Action Network (CLEAN), Bangladesh, said:

“The EU should run away as fast as possible from the ‘Japanese model’ for LNG finance. Japan’s fossil finance in Bangladesh has undermined energy security and worsened our debt burden. Electricity produced from LNG costs ten times more than domestic fuels and three times more than renewable energy, making it unaffordable for communities in Bangladesh. Instead of financing dirty LNG, we urge the EU to help speed the just development of renewable energy.”