Press Conference by Minister Nishimura (Excerpt)

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

 

10:46-11:01 a.m.
Tuesday, October 10, 2023
Press Conference Room, METI Main Building

Opening Remarks

Circular economy

Good morning. I wish to start by talking about one point.
Earlier this morning, officials from relevant ministries and agencies gathered under Prime Minister Kishida to share information on a circular economy. Prime Minister Kishida instructed us to strengthen our efforts for promoting a circular economy based on the perspective of regional revitalization.
More specifically, the first step is to incorporate urgent actions into economic measures, the second is to strengthen government-industry-academia collaboration with close cooperation among relevant ministries and agencies, and the third is to start reviewing budgets and relevant systems, including legal systems.
METI will promptly consider what actions to incorporate into our economic measures, in close cooperation with the relevant ministries and agencies.
For accelerating resource circulation, it is necessary to ensure the participation of all sectors, not limited to companies but broadly covering local governments, universities, and consumers. Accordingly, METI will endeavor to form a consensus for taking concrete actions, such as clarifying national goals, through the Circular Economy Partnership among Government, Academia and Industry, an initiative that was launched in September and that has 105 organizations, including companies, associations, local governments, and universities, participating in it at present.
We would like to fully utilize this partnership as a collaborative effort for creating pioneering initiatives in local areas, and accelerate efforts for promoting a circular economy.

Question-and-Answer Session

The Clashes between Hamas and Israel

Q: The armed conflict between the Islamic organization Hamas and Israel is intensifying. You visited Israel and Palestine in September and exchanged opinions with each of them concerning the strengthening of economic relations and the expansion of trade and investment. Will you explain your view at this point on how the Government of Japan will respond and what effects this conflict may have on the Japanese economy?

A: Certainly. On October 7, Palestinian militants, including Hamas, launched a number of rockets into Israel and infiltrated into Israeli territory from the Gaza Strip, and caused numerous deaths and injuries, including innocent general citizens. The Government of Japan strongly condemns this. We offer our condolences to the bereaved families and express our heartfelt sympathies to the injured.
The Government of Japan is deeply concerned about the number of casualties in the Gaza Strip caused by attacks by the Israeli Defense Forces.
The Government of Japan has supported a two-state solution whereby a future independent Palestinian state and Israel live side by side in peace and security. With this concept, the Government of Japan has played the central role, in cooperation with Palestine, Israel, and Jordan, to create the Corridor for Peace and Prosperity.
As you said, I recently visited Palestine and Israel to pay courtesy calls to President Abbas of the Palestinian Authority, and President Herzog of Israel, and exchanged opinions with them. I talked about Japan’s efforts for the peace and safety of the two countries. The current situation is extremely regrettable.
Especially in the West Bank, I visited the agro-industrial park in Jericho, for which Japan has been offering support, and exchanged opinions with 13 local companies.
Additionally, 13 Japanese companies visited Rawabi, where development is progressing as the first digital base there, for business matching with Palestinian companies to back up the economic development of Palestine. Also in Israel, we discussed the expansion of cooperation in various fields, including the strengthening of innovation-related collaboration, and reached an agreement. We are seriously concerned that the momentum for those initiatives and business collaboration with Palestinian companies will be derailed.
At present, 87 Japanese companies are doing business in Israel and are collaborating with Israeli companies in such fields as innovation. We have received a report that no Japanese people in Israel have been harmed. The Government of Japan will continue making the utmost efforts for securing their safety.
Japanese people are working at around 30 companies in Israel, but most Japanese people residing in Israel have already evacuated or are planning to do so. At present, the travel warning issued by the Ministry of Foreign Affairs is Level 2, which advises avoiding non-essential travel. So, please take note of this information and be safe. The Government of Japan will make the utmost efforts for securing the safety of Japanese people.
Recovering peace and stability in the Middle East as early as possible is very important for the world economy and for the Japanese economy. I would also like to do what I can do in my position.

Energy mix

Q: I would like to ask you about the energy mix. Fifty years have passed since the Fourth Middle East War, which triggered the first oil crisis. Based on this experience, Japan has endeavored to reduce dependency on the Middle East and on oil as a primary energy source. However, the situation has not improved much. Could you explain your view on the optimal energy mix that Japan should aim at and challenges for achieving that?

A: At the time of the first oil crisis in 1973 that you mentioned, I was an elementary school student, but I remember the chaotic situation where consumers clamored for toilet paper. That oil crisis triggered the establishment of the Agency for Natural Resources and Energy, which has since then endeavored to secure a stable and low-cost supply of energy to serve as the basis for the Japanese economy and people’s lives. However, various events that have occurred so far, and Russia’s aggression against Ukraine last February in particular, have drastically changed the situation, and the whole world is facing extremely difficult challenges to secure a stable supply of energy, achieve economic growth, and respond to climate change simultaneously.
The current energy crisis has occurred at a point when the whole world has been making efforts for decarbonization, and in this sense, we consider it to be a composite crisis of resources and energy, making it different to the first oil crisis. In the long run, the whole world has to reduce dependency on oil, LNG, and coal to achieve decarbonization, but countries, especially emerging nations in Asia, need to use fossil fuels in order to achieve economic growth for the time being. Among fossil fuels, LNG, which emits less CO_2, is expected to play a very important role as a transition energy. Under the current circumstances in which the LNG supply from Russia is suspended, global competition for procuring LNG is becoming more and more fierce, especially in Europe.
Against this background, while we need to promote the diversification of energy sources, we also need to maintain good relationships with countries in the Middle East. From such a viewpoint, we are very much concerned about the current situation, particularly the clashes between Israel and the Palestinian militants. As I mentioned earlier, we consider that peace and stability in the Middle East is of the utmost importance.
From the perspective of economic security, it has become extremely important to strengthen the supply chains not only for fossil fuels but also for critical minerals, in other words, to build supply chains with reliable partners. In this sense, I said that the current crisis is a composite one of resources and energy, differing from the first oil crisis. Regarding LNG, since assuming the office of Minister of Economy, Trade and Industry, I have exchanged opinions with ministers of Malaysia and countries in the Middle East such as Oman, as well as those of Brunei and Australia with the aim of securing a stable supply of LNG. On the occasion of the G7 meeting, I advocated the necessity of upstream investment and shared that idea with G7 member countries. With regard to critical minerals, as have been announced earlier, I visited the southern part of Africa this summer, and visited Canada and Australia in September to explore various approaches for securing critical minerals and for building supply chains.
Additionally, we have been developing relevant domestic laws. We introduced the idea of Strategic Buffer LNG (SBL) under the Economic Security Promotion Act and made a system to secure a certain amount of LNG. Among our two Green Transformation (GX)-related Acts, the GX Decarbonization Power Source Act stipulates the utilization of nuclear power and the development of a power grid for introducing renewable energy. In this manner, we have refined our legal system. The GX Promotion Act presents the future direction of advance investment at a level of 20 trillion yen through the issuance of GX transition bonds, thereby promoting investment at a level of 150 trillion yen in the public and private sectors combined.
In this manner, we have been making responses to the composite crisis of resources and energy and will make further efforts for achieving a stable energy supply, decarbonization, and economic growth at the same time.
In that process, we will have to take realistic actions. For example, we will promote the use of both renewable energy and nuclear power instead of choosing only one of them. In the meantime, regarding electricity rates, in Germany, where the use of renewable energy is being rapidly promoted, electricity rates are roughly twice of those for Japanese households, and in the UK, where the dependency on coal has been reduced rapidly from 40% to 10% over the past 10 years, electricity rates are 1.5 times of those in Japan, and Prime Minister Sunak has expressed his intention to partially review the current rapid-paced measures.
It is a challenge to promote decarbonization in a realistic manner while protecting people’s lives and the economy and achieving economic growth. In order to secure a stable supply of energy, including new sources of energy, we will formulate and steadily implement practical policy measures.