*Note: This is a provisional translation for reference purposes only.
Tuesday, September 6, 2022
Press Conference Room, METI Main Building
Visit to the US
I would like to mention one thing.
I will be visiting the United States from tomorrow—the 7th—until the 11th. I will go to Los Angeles, where I will attend the IPEF ministerial meeting, which will be held in person for the first time.
I will contribute to discussions on the role expected of the Indo-Pacific Economic Framework (IPEF), toward forming an open, fair, and inclusive economic order in the region, and also addressing 21st century issues such as digital technology, supply chains, and decarbonization.
The participating countries have held continuous discussions day after day, and I cannot predict whether negotiations will begin at this ministerial meeting. I will discuss firmly so that negotiations will begin as soon as possible. In addition, I plan to exchange views individually with ministers of relevant countries.
After that, I will visit San Francisco for exchanging views and making on-site visits, which I hope will contribute to strengthening support measures to form Japan's startup ecosystem and accelerating DX in the automobile sector.
As I am traveling while the COVID-19 pandemic continues, I will make every effort to ensure that adequate preventive measures are taken, with the help of the host country.
IPEF Ministerial Meeting
Q: There are two questions from the lead company.
First, you just talked about staying in the United States this week for the IPEF. What particular points would you like to focus on during the negotiations?
A: As I said at the beginning, the ministerial meeting will be held from the 8th to advance concrete discussions on how all of the participating countries should address 21st century issues such as digitalization of economies, strengthening of supply chain resilience, and decarbonization efforts, in order to form an open, fair, and inclusive economic order through the IPEF.
There are already economic frameworks in the region such as the RCEP and CPTPP—which I was the minister in charge of—but I recognize the importance of making the IPEF a framework that allows member countries to feel tangible benefits through an inclusive economic order.
Japan will contribute as much as possible to making the framework meaningful with a balance of open and fair rules and cooperation, and benefits and merits gained from trade and investments.
I will discuss these issues thoroughly so that negotiations can begin as soon as possible.
Q: My second question is about Sakhalin-2. Two Japanese companies—Mitsubishi Corporation and Mitsui & Co.—have decided to invest in the new company operating Sakhalin-2. Please give us your thoughts on this.
In addition, I believe that specific conditions regarding interests will be negotiated between the shareholders of the new company, and Russia's influence is expected to grow even stronger due to the government's withdrawal. Please give us your thoughts on what efforts the government will make to ensure a stable supply of LNG.
A: Mitsui & Co. and Mitsubishi Corporation have both applied for a stake in the Russian government's new company operating Sakhalin-2. I am aware that the Russian government has decided to allow the two companies to participate. I think this decision is of vital significance from the viewpoint of Japan's stable energy supply. I understand that the shareholders will hold various discussions in the future, and the government will continue to give thorough support wherever possible while closely communicating the situation with the private sector.
As for LNG, power and gas companies currently hold stocks of LNG of around two to three weeks, so in an emergency, businesses will share their stocks as necessary in the short term. In addition, we will work in the medium to long term to secure a stable supply of LNG through whatever means are possible, including alternative procurement from the spot market or LNG suppliers other than Russia, as well as controlling demand as necessary. At the G20 Energy Ministers' Meeting, I met with the Minister Bowen of Australia to share these points, and confirmed that we will cooperate in the future. I will closely communicate with ministers of relevant countries and make every effort to ensure a stable supply for Japan.
Measures Against Soaring Crude Oil Prices
Q: I would like to ask about the decision made last night by OPEC+. Just after they decided to increase production in September, they conversely decided to decrease production in October. I think that the consumer side needs an increase in production to ensure stable energy prices and a stable supply. Please give us your thoughts on this decision by OPEC+ and how Japan will talk to or negotiate with oil producing countries in response.
A: I believe an agreement was made at the OPEC+ Ministerial Meeting held yesterday to reduce production in October by 100,000 barrels per day. I also understand that the supply and demand situation remains uncertain. I will refrain from commenting on trends in crude oil prices, but we will continue to closely monitor with great concern the outcomes of the OPEC Ministerial Meetings, which will impact the supply and demand of crude oil, and its prices. As the international energy market situation is changing day to day, we will closely and cautiously monitor these trends and their effects on the Japanese economy. Furthermore, we have many opportunities to urge various oil producing countries to increase production while strengthening cooperation with the IEA and major consumer countries, and I will also talk to them directly at the ministerial level.
Sanctions against Russia
Q: This may be related to what you said just now, but at the G7 Finance Ministers' meeting the other day, there was an agreement to set an upper limit on the price of Russian crude oil. Although METI does not have direct jurisdiction over this matter, as the ministry in charge of the energy sector, what does METI think about this agreement and its potential effects?
A: I have heard that there was an agreement to impose a price cap at the G7 Finance Ministers' Meeting on the 2nd. This system aims to stabilize the international oil market while reducing Russia's oil revenue. I am aware that there will be an in-depth discussion for designing the system based on the G7 agreement toward effective implementation.
I understand from this communique that its implementation will be synchronized with the timeline for the EU's sixth package of sanctions, so the cap is expected to be imposed starting on December 5. To that end, an in-depth discussion will be held to design the system.
Japan will discuss concrete designs of the system from the viewpoints of the stabilization of the international oil market, Japan's stable energy supply and energy security, while cooperating with the other G7 countries.
Nuclear Power Policy
Q: The other day, the Japan Atomic Energy Agency (JAEA) decided to join the UK government's high-temperature gas reactor development plan. Please give us your thoughts on this, and on the relationship and consistency with the fact that the government is discussing the development and construction of next-generation reactors toward the end of the year.
A: I have heard that the Japan Atomic Energy Agency (JAEA) is one of six potential partners that were shortlisted to join the high-temperature gas reactor project being promoted by the UK government. I understand that the JAEA owns an HTTR—high temperature engineering test reactor—in Ibaraki that can achieve an outlet temperature of 950 degrees centigrade—the highest in the world—and that this technology from Japan is highly evaluated. I welcome this decision and expect that the cooperation with the UK will develop in the future.
Regarding the development of advanced reactors, the Sixth Strategic Energy Plan approved by the Cabinet last October clearly states that Japanese companies with advanced manufacturing capabilities will collaborate with and participate in development projects abroad. Taking that into account, the application to join this project was made in June of this year.
In any case, we have received support from Prime Minister Kishida for the future directions of nuclear power policy. We will continue discussions while listening to expert opinions from the viewpoint of securing all options, including the development and construction of next-generation advanced reactors, aiming to reach conclusions by the end of this year.
We will continue to promote research and development of advanced reactors and fostering of human resources while taking advantage of the results of international collaboration.