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Sumitomo Mitsui becomes first Japanese

bank to withdraw from coal

P JAPANESE banking giant Sumitomo Mitsui exporting coal-fired generating technology.
Financial Group is to withdraw from coal by In March, the Japanese government said it
halting new financing for all coal-fired power was seriously looking at ending financial support
projects. for exports of coal-burning generation technol-
It is the first major Japanese lender to make ogy in a bid to boost decarbonisation.
a complete commitment to ending support for The government is looking to follow the poli-
coal, and now puts pressure on the country’s cies adopted by the US and the European Union
other banks to cut their fossil fuels, Reuters in ending support for exports of generating tech-
reported. nology and finance and insurance services, the
The move by Japan’s second-largest bank by Nikkei reported.
assets comes after Prime Minister Yoshihide This would be a major change of policy for
Suga announced last month that the country Tokyo, which until now has supported exports
aims to nearly double its target for cutting carbon of technology by the country’s industrial giants.
emissions and as governments and companies Japan uses bodies such as the Japan Bank for
globally move towards decarbonisation. International Cooperation (JBIC) to offer loans
SMFG had previously allowed itself to lend and financial support. Although the bank insists
to coal projects that were considered to be more on modern technology and lower greenhouse
environmentally friendly, as indeed did most of gas (GHG) emissions, it still has a major expo-
Japan’s banks and finance houses. sure to fossil fuel projects.
These so-called ultra-supercritical (USC) Japanese companies including Mitsubishi
power plants burn coal more efficiently than Corp. have signed such deals with Vietnam and
older designs and emit less greenhouse gases Indonesia.
(GHGs). The Japanese stance on coal has long been
The bank has now removed this exception criticised by overseas investors on the grounds
from its wider coal policy in its updated corpo- that it goes against efforts to combat climate
rate lending policy. change. Foreign governments, mainly those of
“We have gotten rid of the criteria, as some the US and European nations, have joined the
study showed even USC power plants would not chorus.
reduce CO2 emissions dramatically,” Tatsuya The Japanese government has decided that it
Takeda, general manager of SMFG’s corporate should work toward terminating support for coal
sustainability department, told an online press projects, given that it has made decarbonisation
briefing. as a pillar of its growth strategy.
The decision is the latest of several by Japan’s Southeast Asia is a major customer for Japa-
banks to fine-tune their lending policy for coal nese technology, and 40% of the region’s electric-
projects, although SMFG is the first bank to ity is generated by coal.
make the commitment not to back any new coal As well as coal, Japan is also pursuing hydro-
ventures. gen technology and has finally launched offshore
Rival bank Mitsubishi UFJ Financial Group wind licensing rounds.™
said last month it would stop financing upgrades
of existing coal-fired power plants, but stopped
short of a complete coal ban.
As well as financial backing, Japan is still

P6 www. NEWSBASE .com Week 19 12•May•2021