Japan, other developed country financiers called to stop bankrolling gas expansion in SEA amid fossil fueled high energy prices, climate crisis

Ahead Energy Day at the 27th Conference of Parties to the United Nations Framework Convention on Climate Change (COP27), sustainability think-tank Center for Energy, Ecology, and Development (CEED) and partners raised alarm over massive plans for new fossil gas in Southeast Asia, which are being fueled largely by developed nation financiers and investors even as a raging climate crisis and rising fossil fuel prices indicate an end to gas instead of expansion is needed today.

Southeast Asia has a massive 117 GW gas power plants in the pipeline, with a total estimated capital cost of pre-construction and in-construction projects reaching up to USD 102 billion as of March 2022.

“Southeast Asia’s gas boom comes at a time of intensifying clarity that the climate crisis leaves no space for new fossil fuels – coal, gas, or oil – anywhere in the globe. It is trading the chance to move forward a renewable energy transition while opening the pandora box of more carbon and methane emissions that will certainly mark the end for the 1.5 degree C Paris goal. This is even as Southeast Asian peoples are also among the most vulnerable in the world to climate impacts,” said Gerry Arances, Executive Director of CEED.

“At the same time, massive plans for gas will only further turn us into a victim of a tug of war for LNG supply globally. We would have been spared from these problems if it were not for financiers that bankroll gas in the region,” he added.

According to the report, Japanese banks top the list as the biggest financiers of fossil gas in the region. One of the world’s major traders and importers of LNG, Japan has heavily financed gas and LNG projects beyond its borders through their public and private financial institutions.
“Japan has been one of the biggest financiers of coal projects in the past decade, and now they are trying to expand the gas market in Asia. This needs to be challenged by us. Their policies and behavior should be changed. We know gas is not a bridge fuel: gas makes East Asian countries and Southeast Asian countries’ energy security more vulnerable – it is a bridge to further crisis. We have to stop now, and we have to call out Japan and other financiers who enable these projects continuously,” said Ayumi Fukakusa, Climate Change and Energy Campaigner of Friends of the Earth Japan.

Seven Japanese public and private banks participated in a total of USD 15 billion in financial support to fossil gas related projects in the last seven years. Japan Bank for International Cooperation (JBIC) even has financial relationships with the developer of an LNG terminal in biodiversity hotspot know ad the Verde Island Passage in the Philippines – a project which recently received a cease and desist order due to land conversion violations.

“As a G7 country, Japan also committed to stop public finance to fossil projects by the end of this year. But what the Japanese government is saying is, we will not change anything. This is not okay at all,” Fukakusa said.

Since the signing of the Paris Agreement, 123 financial institutions channeled USD 33.4 billion into the fossil gas industry in SEA between January 2016 and March 2022.

For his part, Climate Action Network Southeast Asia Regional Coordinator Nithi Nesadurai says the energy crunch and resulting soaring prices of energy further make the case for ending SEA’s ambitious gas plans.

“If in the Philippines it has raised the prices of electricity, in Malaysia it has raised the subsidies for electricity to phenomenal levels whereby even the finance minister has come on and said that for every one dollar of subsidy, 53 cents goes to the top 20% richest people in the country,” he said.

Financiers must instead divert their attention to more sustainable endeavors.

“Every dollar spent in fossil gas expansion is a dollar taken away from investing in renewable energy solutions. There are alternative energy, renewable energy solutions which could come and provide real energy security which every country needs – because if you are going to be relying on imported gas and oil, you don’t have security,” added Nesadurai.

“The climate crisis, the fossil fueled high prices of energy clearly dictate that there is no place for new gas in Southeast Asia,” Arances concluded.


Aryanne De Ocampo
Advocacy, Networking, and Communications Program Head
Center for Energy, Ecology, and Development (CEED)
adeocampo@ceedphilippines.com | +639295940057