Keep pace with the G7 allies! Japan plans to gradually reduce coal imports from Russia

Koichi Hagiuda, Japan's minister of economy, trade and industry, said on Friday that the country planned to gradually reduce coal imports from Russia while looking for alternative sources of supply after Europe and the US tightened sanctions on Russia.

The move highlights a potential shift in Japan's energy procurement policy, one of the world's largest energy importers.

Koichi Kaseda said Japan's goal was to phase out coal imports from Russia. However, he also admitted that it would be difficult to find an alternative source of supply immediately.

Russia is the second largest supplier of thermal coal to Japan in 2021. Russia accounted for 11% of Japan's total coal imports in 2021 and is Japan's fifth-largest supplier of crude oil and liquefied natural gas (LNG), according to government data.

Japan imports almost all of its coal consumption, making it the third-largest importer of coal after India and China, according to the US Energy Information Administration (EIA).

"We will need to find alternative suppliers, otherwise we will face difficulties in ensuring domestic coal supplies, which could lead to problems such as power outages. We need to prevent this from happening. " Koichi Shimada said. "We will cooperate with the sanctions against Russia without placing a burden on domestic industry."

Japan will co-ordinate action with Europe and the US after the Group of Seven issued a statement promising additional sanctions against Russia in response to Russian action in Ukraine. The G7 statement said these countries would ban new investment in Russia's energy sector and expand trade restrictions, including phasing out and banning imports of Russian coal.

Mr Kaseda's comments follow EU countries' agreement on Thursday to ban imports of coal from Russia, extending sanctions to Russia's energy sector for the first time.

Japanese Prime Minister Fumio Kishida said on Thursday that Japan would announce further sanctions against Russia as early as Friday after coordinating with allies of the Group of Seven.

Japan has stepped up sanctions against Russia after the conflict between Russia and Ukraine escalated on Feb. 24, including removing Russia from the international payment network SWIFT and freezing the assets of the Russian central bank. In addition, Japan has frozen the assets of Russian officials, oligarchs, banks and other institutions, kept pace with the Group of Seven and banned the export of high-tech products to Russia.

However, Mr Kishida made it clear last week that Japan would not withdraw from Sakhalin 2, an energy joint development project with Russia, on the grounds that the liquefied natural gas provided by the project was crucial to ensuring Japan's energy security.

In order to strengthen energy security and reduce dependence on Russian fuel, Japan's Ministry of economy, Trade and Industry held a group meeting at the end of March to discuss measures such as installing energy-saving infrastructure in steel mills to reduce coal use.