On the day that Prime Minister Fumio Kishida gave his unusually humorous and blunt address to the US Congress, senior officials from Japan and the US sat down to talk about the partnership between their respective countries on climate and energy. John Podesta, the senior advisor to the president who oversees US climate change policy, sat face-to-face with Japan's Economy, Trade and Industry Minister Ken Saito.
For Japan-watchers, the trilateral summit between the US, Japan, and the Philippines in Washington was the single biggest event taking up oxygen in the media last week. While the summit's main objective was to reaffirm and strengthen defense cooperation as deterrence against China's growing bellicosity in Asia, the summit also signaled the trio's closer ties in the domain of energy and climate.
The joint statement that emerged from the energy delegates' meeting covers a wide swath of energy-related issues (also see the White House’s Factsheet). In today's post, I'd like to highlight the main agreements in the climate and energy part of the statement.
Four observations
Before diving into the details, here are a few of my observations on the agreements:
Closer ties on clean energy and climate: No surprises here. The summit marked an unambiguous strengthening between the three countries (especially between the US and Japan) on these policy fronts. Specifically, they extended and deepened the climate and energy initiatives I highlighted in my previous post.
Nudging other major economies: The energy talks offered more than a few glimpses of the US and Japan aspiring to push other countries to be more aggressive in their clean energy and climate commitments. These included, for example, urging other countries to ratchet up their 2035 Nationally Determined Contributions and “commit to prioritizing concrete and timely steps towards the goal of accelerating the phase-out of domestic unabated coal power.”
China-proofing and Trump-proofing: Consistent with the core of the trilateral summit, the US and Japan are driven by the need to reduce their dependence on China for clean energy technologies through "friendshoring" and "minilateralism." Another elephant in the room was the specter of a Trump victory in November and the threat of a radical roll-back of US climate commitments. The US and Japan hope that strong diplomatic initiatives will foster cross-border partnerships that can withstand another 4 years of a Trump presidency.
Strong progress in 5 energy-related areas: The joint statement seemed to mark particular progress in 1) offshore wind development, 2) infrastructure investments(including energy), 3) establishing critical mineral supply chains independent of China, 4) nuclear energy, and 5) carbon management.
Summit outcomes
The joint statement from the US-Japan energy talks covers a broad range of energy issues. Briefly, here are the five areas that saw a lot of bilateral progress.
Offshore wind
The US has an ongoing strategy to scale up its offshore wind deployment, called the Floating Offshore Wind Shot, which aims to reduce the cost of floating offshore wind in deep waters by more than 70% and reach 15 gigawatts (GW) of domestic generation capacity by 2035.
At the summit last week, Japan announced that it will join the Floating Offshore Wind Shot as the first international collaborator. This means that the US and Japan will collaborate on innovating in engineering and manufacturing to reduce the cost of offshore wind toward the US target. The two governments will report on their progress annually.
For what it's worth, the two sides also acknowledged each other's other offshore wind initiatives. Japan will be investing ~¥120 billion (US$ 776 million) through its Green Innovation Fund. It also launched an industry platform called Floating Offshore Wind Technology Research Association (FLOWRA), where industry participants work with academics to reduce costs and reach mass production of floating offshore wind.
The US Department of Energy, on the other hand, is investing US$ 5.8 billion in public-private funds through its Strategy to Advance Offshore Wind Energy to bolster the offshore wind supply chain.
Infrastructure investments
In June 2022, the G7 countries spearheaded an initiative called the Partnership for Global Infrastructure and Investment (PGI) to invest a total of $600 billion over the next five years in global infrastructure projects.
At last week's summit, the US and Japan committed to working together and with partner countries on fostering investments under the PGI. Japan, the Philippines and the US are particularly focusing on coordinated investments in high-impact infrastructure projects in the Indo-Pacific, which will include clean energy and critical minerals.
Critical minerals supply chains
Minerals needed to manufacture batteries, solar panels, wind turbines, and other components central to the energy transition have gained much more attention recently, not least because of China's overwhelming dominance in the processing stages of their supply chains. And the last few years have painfully demonstrated what can happen if a hostile state decides to weaponize its supply of key natural resources or commodities against countries dependent on them.
Reducing reliance on China in this area means three things: supporting the extraction and processing of minerals in non-China countries, increasing imports from those countries, and reducing the demand for virgin minerals through recycling.
The trilateral energy talks aimed to hit all three of these goals. The US and Japan, for example, will explore joint projects through the Minerals Security Partnership and the Partnership for Resilient and Inclusive Supply-chain Enhancement (RISE). They'll also bolster the recycling of electrical and electronic scrap in both countries plus other like-minded countries in the Indo-Pacific.
The Philippines is a particularly important partner in this domain because it happens to be the second largest producer of nickel ore in the world (nickel is used in batteries in electric vehicles). The Philippines will become a founding member of the Minerals Security Partnership Forum, and the three countries agreed to forge ties to strengthen supply chains of nickel that are not too dependent on China.
Nuclear energy
The US has been an enduring supporter of nuclear energy development in Japan. This attitude hasn't changed, and it's explicit in the joint statement.
In line with the international pledge at COP28 last November to triple installed nuclear energy capacity globally by 2050, the US "applauds the Prime Minister's plan to restart nuclear reactors to meet (Japan's) decarbonization goals," reads the statement.
The more concrete agreement in these talks was the support that the US and Japan pledged to extend to the Philippines for its nuclear energy development. The three countries will expand their partnership on safe and secure civil-nuclear capacity building. The US and Japan will also co-host a nuclear energy study tour in Japan for nuclear experts and policymakers from the Philippines and other countries. This is in addition to deeper trilateral cooperation on civilian nuclear workforce development to advance the Philippines' civil nuclear energy program.
Carbon management
Carbon management is an umbrella term encompassing all of the technologies and processes involved in the capture, use, transport, and storage of CO2 as well as CO2 removal from the atmosphere.
There are now a number of multilateral initiatives and platforms where governments and industry players collaborate on carbon management. These include the Carbon Management Challenge, the CCUS Initiative under the Clean Energy Ministerial, and the Mission Innovation CDR Launchpad.
The US and Japan reaffirmed their commitment to these initiatives to develop carbon management technologies to strive toward the Paris Agreement goals. The US also committed to collaborating with Japan to study the potential for CO2 transport and storage hubs between Alaska and Japan.