Japan’s environment minister sees business risk in building new coal-fired plant

Image: Japan’s Environment Minister Koichi Yamamoto speaks at a news conference at Prime Minister Shinzo Abe’s official residence in Tokyo, Japan, August 3, 2016. REUTERS/Kim Kyung-Hoon

TOKYO (Reuters) – Chugoku Electric Power Co and JFE Steel may need to rethink plans for a new coal-fired power plant if they cannot present clear measures to address climate change concerns, Japan’s environment minister suggested on Friday.

Minister Koichi Yamamoto, in an opinion statement over the companies’ plan for a 1.07 gigawatt (GW) coal-fired power plant, flagged a business risk and suggested the companies should consider all options including scrapping the plan.

JFE Steel is a unit of JFE Holdings Inc.

“It is important for the companies to recognize severe business risk surrounding coal-fired power stations and think about all possible options including reconsidering the plan if no clear path to cut emissions by 2030 and later is available,” Yamamoto said in a statement which was submitted to the industry minister.

Japan ratified the 2015 Paris agreement to curb to curb carbon dioxide emissions by 2030 and 2050.

The companies plan to build a power station in Chiba, near Tokyo, aiming to start operation in 2024.

Government approval for a power plant project in Japan is based on an examination of its effects on the surrounding environment.

The industry ministry handles the process and is authorized to give an approval, although the environment ministry can submit opinions during the assessment that could influence the final decision.

The environment ministry had issued rare objections to five new coal-fired stations in 2015 but was pushed by the industry ministry last year to accept voluntary steps by power companies to curb emissions.

But as Japan aims to curb emissions by 26 percent by 2030 from 2013 level and 80 percent by 2050, the ministry needs stricter checks, an environment ministry official said.

“We’re worried that there are so many plans to build new coal stations which could hinder us from achieving goals,” he said.

As Japan opened up its power retail market last year, companies are rushing to build new power plants.

The new plants, if all built, will raise emissions from coal power plants to 300 million tonnes in fiscal 2030, against 267 million in 2014 and Japan’s target of 220 million to 230 million tonnes in 2030, the ministry estimates.

The industry minister Hiroshige Seko, however, brushed off that claim on Friday, saying the opinion is not an objection.

“We’ll take it into an account and will make an appropriate action,” he said.

(Reporting by Yuka Obayashi, Additional reporting by Osamu Tsukimori; Editing by Ruth Pitchford)

Copyright 2017 Thomson Reuters. Click for Restrictions.

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