Taking stock of US-Japan energy diplomacy
Looking back ahead of the Biden-Kishida talks
The US-Japan-Philippines trilateral summit is set to take place this week in Washington D.C. While the summit will mainly focus on security issues, climate and clean energy are also on the agenda, as both Prime Minister Kishida and METI Minister Saito have explained.
Rather than prognosticate about what exactly will be discussed and its implications, what I want to do here is to take stock of US-Japan diplomacy in the domain of energy.
What talks have there been? Which issues are top of mind for US and Japanese leaders? What are their mutual sentiments?
The stocktake in this post suggests 3 takeaways about the bilateral relationship in the domain of energy:
US-Japan ties are strengthening, as evidenced by the proliferation of partnerships and dialogues that have been launched over the last two to three years
Energy talks between the two countries touch upon a wide range of priorities, from decarbonization to achieve both countries' climate goals, promoting clean energy in the broader Asia-Pacific region, strengthening energy security, to linking clean energy innovations to economic growth
At times US officials have been critical of some parts of Japan's energy strategy as being inconsistent with addressing climate change. Predictably, these criticisms have been directed at Japan's continued reliance on coal and promotion of ammonia and hydrogen co-firing
Let's take a closer look.
I do intend to write a later piece analyzing the talks once we know the summit’s outcome, so stay tuned!
Partnerships & dialogues
The bilateral ties between the US and Japan on energy issues have visibly strengthened. The best evidence for this is to count up the number of partnerships and dialogues that have been launched over the last three to four years. These talks take place at various levels of government, serve multiple purposes (e.g., knowledge-sharing, private-public networking, value alignment), and cover a wide range of energy topics (e.g., decarbonization, energy security and supply chains, innovation and economic growth).
The following are the high-level partnerships that have been on my radar. I'm sure I'm missing other initiatives, so if you know of any, let me know in the comments.
US-Japan Competitiveness and Resilience Partnership (CoRe): Announced in April 2021, CoRe serves as an umbrella partnership for more specific climate and clean energy-oriented partnerships highlighted below. In CoRe, the US and Japan work to advance innovation, protect the world from future pandemics, combat the climate crisis, and enhance people-to-people ties between the two countries. On the issue of climate, the countries promote global subnational zero-carbon commitments, policies and actions, climate-smart agriculture, cooperate on clean energy, and address climate-related financial risks through enhanced transparency for investors.
US-Japan Climate Partnership: Also launched in April 2021 to reinforce bilateral cooperation to achieve US and Japanese 2050 net-zero goals. Concretely, this means the two nations will cooperate on implementing the Paris Agreement, advance climate and clean energy technology, and promote the energy transition in the Indo-Pacific. Limiting methane emissions, ceasing new direct government support for unabated international coal power, using existing nuclear power, and critical minerals have also been added to the agenda.
Japan-US Clean Energy Partnership (JUCEP): Biden and Kishida established JUCEP to implement the above two partnerships. It promotes open, competitive, and transparent energy markets in the context of the Free and Open Indo-Pacific (FOIP), Japan's foreign policy doctrine promulgated by the late Shinzo Abe. Specifically, JUCEP aims to direct private investments to accelerate decarbonization in Indo-Pacific countries, and formulate policy measures and create business opportunities in the energy and infrastructure industries in Japan and the US.
In October 2021, JUCEP invited the Indonesian government and over 170 private sector entities and 20 government agencies from the 3 countries to a clean energy investment opportunity event.
Japan-U.S. Clean Energy and Energy Security Initiative (CEESI): Established in May 2022 as the “preeminent Japan-US ministerial-level energy dialogue,” CEESI aims to strengthen energy security through stable energy supply (including LNG), and speed up the deployment of clean energy technologies including renewables, hydrogen and fuel ammonia, CCUS, and nuclear power. US and Japanese officials have focused on the role of Japan's GX Promotion Act and the US Inflation Reduction Act (IRA) as key domestic legislation that can help accelerate these technologies.
Japan-US Energy Security Dialogue (ESD): Launched in December 2022, the ESD aims to increase energy security, promote the energy transition, economic cooperation, and strengthen the rules-based economic order in the Indo-Pacific. The surge in energy prices, continuing price volatility, and supply disruptions triggered by Russia's invasion of Ukraine were the proximate motivations for the ESD.
Minerals Security Partnership: Built on the 2019 US-Japan Trade Agreement, the Minerals Security Partnership was announced in March 2023 to strengthen critical minerals supply chains for clean energy and battery production (including cobalt, graphite, lithium, manganese and nickel). This partnership might allow Japan to benefit from the US IRA’s tax incentive measure. It will also work to craft best practices on reviewing foreign entities' investments in critical minerals, measures to promote circular economy approaches to reduce demand for and environmental impact of mineral extraction, and a host of other issues surrounding this sector.
Hints of US criticism for Japan
On the whole, the trend in US-Japan energy diplomacy has been one of stronger ties in scaling up clean energy both at home and abroad.
But there have been signs that the US is not completely happy with Japan’s GX policy. This is especially the case with that pesky technology of mixing ammonia and hydrogen as fuels in gas-fired power plants
During the 2023 G7 ministerial meeting on climate, energy and environment, the US Climate Envoy John Kerry voiced his opposition to Japan’s hydrogen and ammonia policy. It’s worth quoting in full:
We believe there are a number of possibilities for future technologies. But the role of co-firing ammonia and hydrogen with natural gas could pose some serious problems and significant challenges. We are very concerned that natural gas (which supposedly has lower emissions than other fossil fuels) is being touted as the solution to the challenge before our eyes. People are concerned that mixing ammonia or hydrogen with gas will postpone the problem rather than accelerate the transition. Spending more energy to produce hydrogen and ammonia and burning them mixed with gas will increase the costs and fail to reduce emissions.
Kerry’s successor, John Podesta, also voiced his concern over Japan’s continued reliance on coal-fired power plants. He explained that Japan’s strategy to co-fire ammonia with coal will ultimately prolong coal. He urged Japan to set a timeline for phasing out coal and set more ambitious emission reduction targets. He also hinted that the US might raise this issue at the summit this week.
My guess, though, is that the issue of ammonia co-firing won't pose much of a hindrance to the continued strengthening of US-Japan energy diplomacy.