Press Conference by Minister Hagiuda (Excerpt)

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

8:41-8:50 a.m.
Friday, April 8, 2022
First floor lobby, Annex to the House of Representatives

Opening Remarks

Earthquake off the Coast of Fukushima

To start off, I would like to say one thing.
At the Cabinet meeting earlier, measures were compiled to support those affected by the earthquake off the coast of Fukushima Prefecture that occurred on March 16.
Some small and medium-sized enterprises in Fukushima and Miyagi Prefectures have been affected by the Great East Japan Earthquake and the earthquake off the coast of Fukushima last year, as well as by the recent earthquake. The repeated disasters and COVID-19 pandemic have put their businesses in a difficult condition. In light of these circumstances, we have decided to support these SMEs for the resumption and continuation of their businesses by providing a Group Subsidy as a special measure, just like we did after the earthquake last year.
We will proceed promptly with the recovery and reconstruction in a manner considerate of the people affected by the disaster while grasping the progress thereof by listening carefully to the people in the affected areas.

Question-and-Answer Session

The Situation in Ukraine

Q: I have two questions regarding energy.
First, regarding additional sanctions, the EU announced a ban on the import of Russian coal. What is Japan's response?

A: In order to strengthen sanctions against Russia in a similar manner, the leaders of the G7 nations agreed to promptly advance plans to reduce their energy dependence on Russia, including phasing out and prohibiting coal imports from Russia. On this basis, specific energy-related sanctions will be implemented based on each country's circumstances and energy security policy.
Japan intends to further reduce its dependence on Russia's energy through efforts to diversify energy sources including renewable and nuclear energy as well as to secure supply sources outside Russia. We will also urge energy producing countries to ensure a stable supply.

Q: My other question is about the release of oil reserves.
It has been announced that IEA member states other than the USA agreed to release an additional 60 million barrels, and that Japan would contribute 15 million barrels. Please tell us the reason for pledging 1.5 times as much as the allocation.

A: Given the current situation in Ukraine, it is important to make this collective action to release oil stocks effective. The international community needs to act in a unified manner, and after coordinating with the IEA and other countries concerned, the decision was made to release 15 million barrels—the largest volume after the US.
The IEA did not decide on an allocation to each country. Although there was a guide, this figure was determined based on our own decision, and I am afraid your calculation of 1.5 times is not appropriate.

The Situation in Ukraine

Q: I would like to ask you a few questions about the G7 statement released last night.
The statement also included banning new investment. Japan is taking part in three projects in Russia, namely Sakhalin-1 and -2, and Arctic LNG 2. Does the government's policy of not withdrawing from them and maintaining those interests remain the same? 

A: We have interests in all these projects and have secured the right to offtake on a long-term basis. They are important for our energy security in times with soaring energy prices, like the present, as we can procure the output for less than the market price. Thus, we do not plan to withdraw from them.
Sakhalin-1 and -2 are already in production, so there are no new investment plans. The new plan for Sakhalin-1 LNG production was already suspended after Exxon announced its withdrawal. As for Arctic LNG 2, it is a project in which Japan already has an interest, i.e., an existing investment project; therefore, I believe it does not fall under the scope of the ban on new investment.

Q: I have another question regarding coal. I understand you are going to reduce it, but do you mean that you are banning it, phasing it out, or simply reducing the quantity? What is Japan's goal?

A: I do not think that any likeminded country will have a normal relationship with Russia in this current situation. Therefore, Japan is also implementing certain sanctions in line with the G7.
However, as I mentioned earlier, energy situations vary by country, so we will gradually reduce Russian coal toward phase-out. In the meantime, if alternative suppliers cannot be found, we would eventually become unable to secure enough coal for domestic use, leading to a potential power outage like the other day. We want to avoid such a situation, so we will look for alternative suppliers, but at the same time, we will also reduce imports gradually and ultimately stop importing Russian coal. That is what we aim to do.

Q: Regarding coal, you just mentioned a phase-out. It could have an impact on businesses in the energy and steel sectors. What do you think about that?

A: We are checking coal-intensive companies' situations either by industry or individually.
We are first verifying the outlook for next winter to prevent any major impacts. As I mentioned earlier, if we reduce imports from Russia, we will take on the responsibility of securing alternative sources. We will cooperate with the sanctions approaches in such a way as to minimize the inconvenience the industry may experience.