Press Conference by Minister Hagiuda (Excerpt)

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

9:36-9:52 a.m.
Tuesday, July 5, 2022
Press Conference Room, METI

Opening Remarks

GX Implementation Council 

To start off, I would like to say two things.
The energy situation remains unpredictable, with factors including a tight power supply situation and an intensifying crisis regarding the supply of resources and energy due to Russia's invasion of Ukraine. We must therefore remain fully committed to securing a stable supply of energy.
Meanwhile, it is imperative that Japan also accelerate its efforts to become a society based on clean energy with a view toward ambitious targets such as being carbon neutral by 2050 and reducing greenhouse gas emissions by 46% in 2030, thereby achieving both economic growth and decarbonization.
The GX Implementation Council will be launched in the Office of the Prime Minister from this summer, and the whole government will flesh out the policies toward achieving GX. Taking the opportunity presented by the new structure within the ministry, I launched a GX Implementation Policy Headquarters at METI today. Headed by myself, it will add impetus to our policy considerations. Please contact the administrative staff for more information after this briefing.

Visit to Australia 

The second point I want to mention is that from July 11 to 15, I will be visiting Australia to attend the Quad (Japanese, US, Australian, and Indian) Energy Ministers' Meeting and the Sydney Energy Forum. This will be the first Quad Energy Ministers' Meeting and will be a follow up to the Quad Summit held in Tokyo this May. The meeting will be an opportunity to discuss expanding cooperation while directly sharing insights with the other countries regarding clean energy fields such as hydrogen, ammonia, CCUS, and carbon recycling. The meeting will have great significance for speeding up decarbonization, promoting social implementation of clean energy technologies, and also improving Japan's energy security. In addition, I will attend the Sydney Energy Forum, which the Australian government will be hosting for the first time. Additionally, I will take full advantage of bilateral talks and other opportunities to spread awareness of Japan's efforts toward decarbonization and strengthening its energy security.
I will also use the visit as an opportunity to pursue bilateral talks with the new Australian government's Minister for Trade and Tourism, the Hon. Don Farrell, and to discuss trade policies on matters such as the CPTPP, RCEP, and IPEF, in light of the current global situation.
Through the visit, I will further strengthen relations with the US, Australia, India, and the other countries involved, and widely spread awareness of the Japanese government's thinking on various related issues.

Question-and-Answer Session

Sakhalin-2

Q: My question is about the Sakhalin-2 presidential decree.
I believe Japan has taken a firm stand on its interests in Sakhalin thus far. I would like to ask whether there will be any changes to this broad policy. Please tell us how the Japanese government is going to respond to this situation, and what kind of response you are looking for from the two investing companies.
Another point is that reportedly, to acquire shares in the new company, it will be necessary to apply within one month of its establishment. Can you also tell us if a specific date is stated as the deadline?

A: Although the presidential decree will not immediately stop imports of LNG from Sakhalin-2, I want to carefully examine what will be required in this situation with the business operators. We are closely examining potential impacts on the handling of Japanese companies' interests in Sakhalin-2 and on its imports of LNG to Japan, so I will refrain from making any predictions about future action. Sakhalin-2 is an important project for Japan from the viewpoint of a stable supply of electricity and gas. We will continue responding to the situation with the public and private sectors acting together, in order to ensure a stable supply of LNG.
We are currently gathering information on the presidential decree through diplomatic channels, asking the Russian government to explain, including the investment conditions and the deadlines for all the procedures it will require of Japanese companies. I will refrain from sharing any more details, but we intend to continue to take careful action while securing a stable supply of energy and protecting the citizen's livelihoods and economic activity, also considering Japan's vulnerability in terms of energy supply-demand structure.
There was a mention of the deadline for application being within one month, but we are not sure when the starting date of that “one month” is, so we want to examine the details thoroughly.

Economic 2+2 and the IPEF

Q: I also have some questions about the Economic 2+2 and IPEF. Please tell us if anything has been decided regarding when and where they will take place. In addition, if they are held, please tell us what you would like to discuss, and what outcomes you would like to see.

A: In the Economic 2+2, I would like to discuss strengthening Japan-US cooperation in areas such as economic security (including improving supply chain resilience) and strengthening the rule-based economic order in the Indo-Pacific region, based on the policies confirmed between the leaders.
The aim of the IPEF is to achieve sustainable and inclusive economic growth in the Indo-Pacific region, and I want it to be a framework for achieving concrete benefits based on the actual circumstances there. Japan would like to contribute to the framework so that results will be seen as soon as possible by prioritizing what can be done immediately.
I understand that the times, places, and agendas of both meetings are currently being coordinated, and nothing has been decided at present.

Visit to Australia 

Q: I have some questions about your Quad visit. I would like to ask what issues you want to pursue in relation to energy security representing Japan during the visit. Also, in light of the prospect of additional talks with natural gas producers such as the US and Australia, I would like to ask how Japan is going to cooperate with them.

A: First, while global efforts toward decarbonization such as making more use of clean energy are becoming increasingly important, concerns and interest regarding energy security are also growing, particularly given the escalating crisis in Ukraine. I believe therefore that it will be extremely important for the energy ministers from the major Indo-Pacific nations to discuss energy security and climate change issues.
In terms of outcomes, this will be the first meeting, so I would like to openly discuss the matters with other participants, and report the outcomes at a later date.
Regarding gas, as I have repeatedly reported to you, I have been frequently asking the US to increase production since the prices began to soar last year.
In addition, in the past opportunities such as bilateral talks with the ministers concerned of the Australian government, it was agreed as a broad direction that we should be prepared for various situations, and that reducing overall dependency on Russia was definitely the way to go, particularly since its invasion of Ukraine. So naturally, I would like to ask Australia to cooperate with Japan in securing alternative gas supplies, and there have already been inter-ministerial discussions between our two governments regarding the matter.
I intend to take the opportunity of meeting face to face to reaffirm this.

Sanctions against Russia

Q: I would like to ask about the sanctions against Russia. Discussing the effects of the sanctions in the NHK's Sunday Debate on the 3rd, Prime Minister Kishida said that Russia is now getting the message, in the form of soaring prices and thorough withdrawal by financial institutions and infrastructure companies.
However, the fact is that the inflation rate in Russia continues to fall, a ruble financial crisis is being avoided, and rising energy prices are increasing its oil export revenues. In addition, Russia is calling for a new G8 that exceeds the G7 in real GDP.
The government says it will keep in line with the international community, but 127 countries participated in the St. Petersburg International Economic Forum held behind the G7 summit, despite being called on to boycott it. What the government is calling the international community is just the US and its allies like Japan and Europe that follow it, which amounts to only about a third of the United Nations. As is clear from the presidential decree on requisitioning Sakhalin-2, sanctions by about a third are not only proving ineffective, but also strengthening solidarity against the West and causing damage to Japan's national interests.
Perhaps Japan should for example declare itself neutral, and like India, prioritize its own national interests and end the ineffective sanctions against Russia in order to secure a stable supply of energy and food.
Please tell us your thoughts on the matter.

A: First, I am aware that President Putin has signed a presidential decree demanding, among other things, the transfer to a soon-to-be-established new Russian corporation of all the rights and obligations of Sakhalin Energy, in which Japanese companies also have interests. Our general position is that nothing must undermine Japan's resource interests, and we are currently closely examining the impact of the decree on the handling of Japanese companies' interests in Sakhalin-2 and on imports of LNG from it to Japan.
As you have pointed out, some are certainly arguing that the sanctions are not proving effective, but on the other hand, I think some of these opinions come from propaganda. If Russia remains defiant even in the face of the unified action of this collection of developed countries, then that is significant. Rather, I think it is a major problem that there are countries supplying Russia with the resources it needs. So, I do think it is important to keep in line with like-minded countries with whom we share the same values.
On the other hand, as I have been saying since the beginning of this incident, each country faces a different energy security situation, so in that sense I think we would rather keep in line with the rest of Asia.
Japan intends to proceed with its efforts in cooperation with the other G7 countries while firmly protecting its stable supply of energy. Japan is also an Asian country, and I will never forget that. When I am in international conferences, I really feel that there are many countries in Asia that cannot speak out even if they want to. Consequently, I think that Japan must also act as a representative of Asia, speaking on behalf of countries that cannot take action. In that regard, I want to engage in diplomacy in a balanced manner.