Spotlight Activity: Japan’s Marubeni Corp’s Pledges to Halve Coal-fired Power Capacity by 2030, and Not to Start New Coal-fired Powered Plant Projects Anymore
On September 18th, Marubeni Corp. announced that it would no longer enter into any new coal-fired power generation businesses and halve the net capacity of its existing coal-fired power plants’ capacity.
Marubeni Corp. is one of the biggest trading companies in Japan, engaging in various business activities worldwide including various financial investments. Its annual net sales in 2018 was 7,540 billion JPY.
In its announcement, the Company added that it might consider pursuing coal-fired power projects that adopt the best available technology (BAT) and are compliant with government policies, leaving leeway for new deals, as other financial institutions announced similar intentions.
This decision by the company might be attributed to the recent movement of global companies and pension funds to divest assets in companies that generate revenues from fossil fuels, especially coal. This movement might make Marubeni anxious about its growing reputational risk and the risk of its investments in coal-fired power plants becoming bad stranded assets.
The company also said it would begin to raise the ratio of power generated by renewable energy in its power supply capacity to 20 percent by 2023 from about 10 percent in 2018.
Status: Moving Forward
Japanese companies have been criticised by the international community due to their unwillingness to withdraw their businesses from coal-fired power plants. In that regard the announcement by Marubeni is considered extremely significant, and it is likely that other companies will make similar announcements soon.
Dear Mr. Nakagawa, Minister of Environment of Japan,
It is a huge progress that Marubeni Corp. announced that it would no longer enter into any new coal-fired power generation business and halve the net capacity of coal-fired power plants’ capacity.
There are, however, still some Japanese companies which have not pledged their withdrawal
of business and finance from coal-fired power plants, which contribute hugely to the GHG emission.
We would strongly suggest that you persuade those companies and financial institutions, which are still commit ed to coal-fired power plants to make similar announcements, and withdraw from them via ESG Working Group held in Ministry of Environment of Japan
Minister of Environment Japan, Masaharu Nakagawa