Japan’s Investment in Russian Energy is Part of its Energy Import Dependence

Japan’s Investment in Russian Energy is Part of its Energy Import Dependence

Japan is largely dependent on imports from abroad for oil and gas. According to the Japan External Trade Organization in 2021, Russian crude oil and LNG accounted for 3.6% and 8.8% of its imports, respectively. While not nearly in the same range as the dependency of European nations on Russian fossil fuels, the amounts are not immaterial, especially as Japan plans to increase LNG in its fuel mix over the coming decades in its bid to wean itself from coal. Moreover, Japan sees its investments in Russian projects as part of its execution of its national energy security strategy, and not simply as high-margin business opportunities.

So, while Japan has taken actions in line with other developed nations against Russia’s aggression such as: freezing central bank assets—up to 10% of Russia’s currency reserves—and revoking its “most favored” status. Japan’s energy import dependance has resulted in the conclusion that withdrawing from the Sakhalin 2 oil and gas project in the Russian Far East is not currently a viable option, as announced directly by the current Japanese Prime Minister Fumio Kishida. While Russia’s state-owned Gazprom’s ownership of 50% of the Sakhalin 2 project has led to Shell exiting its 27.5% stake, Mitsubishi and Mitsui’s combined stake of 22.5% will remain in place with the rationale that this investment is for energy security.

The Promotion and Implementation of Climate Policies

Unfortunately, Russia’s invasion of Ukraine has resulted in a knee-jerk reaction that seems to have become a default around the world—that is, to maintain short-term approval ratings by focusing on short-term energy policies aimed at minimizing inflationary pressure by increasing the supply of fossil fuels in the market. Japan’s energy self-sufficiency, one of the lowest of the OECD countries, sits around 11% further limiting Japan’s ability to focus on longer-term sustainable solutions as Japan’s energy security issues are more pronounced due to its high ratio of energy imports.

Unfortunately, Russian’s invasion has had no visible positive impact on the advancement of sustainable energy polices in Japan and has had the negative impact of bringing into focus of the probability of disruptions which could potentially bring the Japanese economy to a halt. That said, Japan’s 2019 “Act of Promoting Utilization of Sea Areas in Development of Power Generation Facilities Using Maritime Renewable Energy Resources” has created a framework to move Japan to become one of the world’s largest producers of wind power with a potential of 45 gigawatts over the coming decades. While progress over the last three years in developing offshore wind power facilities has been slow since 2019, Russia’s invasion of Ukraine has resulted in a greater sense of urgency regarding off-shore wind as other options such as nuclear and hydrogen are more sensitive to military disruption and Japan’s already-strained relationship with Russia.

War’s Impact on the Health and Wellbeing of Planet

Russia’s invasion of Ukraine has been a stark reminder that the possibility of conventional warfare is always real even between nations which share so much history and culture. However, the real reminder is that of the potential of escalation to nuclear war as the Ukraine looks to become a proxy war quagmire between the nuclear powers of NATO and Russia. While the pandemic has resulted in over six million deaths and Russia’s invasion of Ukraine has exacerbated our struggles with the reduction of carbon emissions, the truth is that both of these deadly serious issues pale in comparison to the escalation of this war to nuclear bomb attacks, or even a single nuclear bomb exploding in an act of war or terrorism. Even the smallest nuclear exchange would result in an unacceptable number of immediate civilian deaths, the destruction of most of the world’s financial wealth held in risk assets, and devastation of supply chains and commercial agriculture, etc. that would lead to years of famine for billions of people. This invasion is much more dangerous than it might appear in that most people have forgotten the potential horror of nuclear holocaust as it lost our attention following the end of the Cold War some thirty years ago; however, the Japanese have certainly not forgotten the horror of nuclear attacks on civilians and its aftermath which can still be felt today three quarters of a century later.

As with the pandemic, this war has crystallized the idea that there are times where we must focus on immediate solutions that concretely mitigate the risk, whether a pandemic, the further escalation of this war, or the continued destruction of a stable climate on the back of continued reliance on fossil fuels. We hold our future in on our own hands, but when it comes existential threat, the future has come to us, and now is the time for decisive action if we are to leave a habitable planet to our children.

Learn More Resources






This Post was submitted by Climate Scorecard Japan Country Manager James Hawylak


Climate change is real, and what governments do matters.

Help us work with key stakeholders globally to ensure continued support of the The Paris Agreement.