Press Conference by Minister Hagiuda (Excerpt)

*Note: This is a provisional translation for reference purposes only.

9:11-9:24 a.m.
Friday, March 18, 2022
Press Conference Room, METI

Opening Remarks

Supply Chains for Strategic Materials and Energy

I would like to mention three points.
First, today, on the 18th, it has been decided that METI will establish a task force on supply chains for strategic materials and energy as instructed by Prime Minister Kishida. This decision is based on the globalization of supply chains, the spread of COVID-19, and changes to the international situation such as unilateral changes to the status quo by force violating international law. METI will carry out discussions in a cross-sectional framework aiming to eliminate vulnerabilities in strategic goods and energy supplies—essential to Japan's survival, people's lives, the economy, and industries—and to obtain and secure superiority in choke point technologies in the global supply chain. In addition, Prime Minister Kishida has instructed METI to proceed in close cooperation with the relevant ministries and agencies, whom we will have participate as observers.
Before everything, I have instructed them to promptly compile responses to the concerns over the supply of strategic goods from Russia, Ukraine, and other countries, and we will advance discussions quickly.

Hydrogen and Ammonia

Secondly, on Tuesday, March 29, a new subcommittee will be established under the Advisory Committee for Natural Resources and Energy to start discussions on expanding the introduction of hydrogen and ammonia. Hydrogen and ammonia are the keys to transitioning to zero-emission thermal power without the use of fossil fuels. They can also help decarbonize a wide range of fields, including industry and transportation, and we believe that they are essential sources of energy for becoming carbon neutral. In addition, it is increasingly important to accelerate public implementation of hydrogen and ammonia, which can achieve both goals of a stable supply of energy and decarbonization, when energy security has become even more critical given the situation in Ukraine and other factors.
At the same time, it is a fact that they are more expensive than existing fossil fuels, and it is necessary to reduce prices by increasing their demand and developing an efficient supply infrastructure for commercialization. For this reason, this council will focus on cost differences compared to existing fuels, developing infrastructure and other issues toward expanding the introduction of and commercializing hydrogen and ammonia.
Please contact the administrative staff for more information.

Offshore Wind Power

Finally, for the third point, we will review the public calls for offshore wind power.
In light of the situation in Ukraine and based on the Strategic Energy Plan, we must urgently accelerate the introduction of renewable energy as a domestic source of energy, which is also important for decarbonization from an energy security perspective. In particular, the results of the public call at the end of last year based on the Act on Promoting Utilization of Sea Areas in Development of Power Generation Facilities Using Maritime Renewable Energy Resources revealed that offshore wind power can become a large-scale power source that is cost-competitive with solar power and other power sources. Although the ability to early commissioning was one of the evaluation items in the past tenders, we will adjust future calls in order to encourage competition among companies in terms of not only prices but also early commissioning.
Accordingly, the deadline for the public calls that are currently underway for the sea area off the coast of Happo Town and Noshiro City, Akita Prefecture, will be extended to ensure early commissioning, and those public calls will be made open anew in conjunction with newly-designated project target areas starting this summer. We would like to start discussions on the specifics of the public calls at the council next week, and reflect the conclusions in the screening criteria.
Please contact the administrative staff when there is more information on this matter.
That is all.

Question-and-Answer Session

Soaring Oil Product Prices

Q: I would like to ask about three points.
For the first point, the rise in crude oil prices has paused and is currently moving around $100 per barrel. Prices remain high, but please tell us what you think of the current price level.
For the second point, the government, including you, is continuing to talk to oil producing countries, and Minister for Foreign Affairs Hayashi will visit oil producing countries such as the UAE this weekend. I think he is going to talk to them by exchanging information related to energy. What kind of results are you expecting from his visit? Those are my first two questions.

A: On March 7, the prices of crude oil temporarily exceeded $130 per barrel, but I believe they went back to $90 and are now fluctuating around $100. It cannot be denied that they remain high, so we are concerned about the impact it will have on corporate activities and our daily life.
However, when they reached $130, I was a little concerned about how far they would rise, and I was at a loss at what we should do after 25 yen, but now they have fallen slightly, and the weather is gradually getting warmer, so we will carefully see what effects the existing measures will have.
Of course, Japan has continued to talk to urge various oil producing countries at all levels, including the UAE, Saudi Arabia, and Kuwait. In addition, at the recent Extraordinary Ministerial Meeting of the IEA or at the G7 Extraordinary Energy Ministers' Meeting, I called for major consumer countries to cooperate in talking to them, and they have agreed to do so.
I will refrain from commenting on future plans and prospects for increased production, but I believe that we should continue talking to oil producing countries by strengthening collaboration with major consumer countries and international organizations, and taking advantage of various opportunities. I will also personally do so. Of course, I do expect that Minister Hayashi will discuss this topic when he visits the UAE this time, so I hope he will make a firm request from a different perspective from ours.

Q: Last night, Prime Minister Kishida held a telephone meeting with the Crown Prince of Saudi Arabia. During the meeting, they agreed to deepen their cooperation toward the stabilization of the oil market and toward the carbon neutral era, and they also agreed that they would hold talks between the energy ministers of both countries. What specific measures are you considering for the future?

A: I received a report that during the meeting between Prime Minister Kishida and Crown Prince Mohammed yesterday, it was decided that I would talk with Minister Abdulaziz about stabilizing oil supplies. I have already been in discussions with Minister Abdulaziz, but we will strengthen them even further.
In the future, I will speak with the Minister firmly about the situation of the international crude oil market, how we will respond, and other matters at an appropriate time.