Center for Energy, Ecology, and Development | Greenpeace Thailand | People’s Coalition for The Rights to Water (KRuHA) | Southeast Asia Working Group on Fossil Gas and Just Energy Transition | Trend Asia
We, the Southeast Asia civil society group of climate, environment, and energy advocates, vehemently condemn Japan Bank for International Cooperation (JBIC)’s decision to co-finance USD 415 million, or nearly half of the USD 832 million, in syndicated loans for Vietnam’s Block B gas field.
The Block B project, located in the Mekong Delta region in southern Vietnam, includes the construction of pipelines connecting to the O Mon power complex.
Japan and Vietnam both pledged to reduce emissions and reach net zero by 2050. Supporting Block B development, however, is a clear contradiction to their climate commitments. In 2021, the International Energy Agency (IEA) reported that there should be no new oil and gas fields to meet the Paris Agreement of keeping the increase in global temperature within 1.5ºC.
While the Vietnamese government announced through its Power Development Plan 8 (PDP 8) its goal to reduce the share of coal power in the country’s energy mix, it is turning to fossil gas as a supposed transition fuel.
But fossil gas is a fossil fuel fallaciously marketed as “clean.” In fact, fossil gas emits methane, which has 80 times the heat-trapping potential of carbon dioxide over the first 20 years it is released in the atmosphere.
The Global Methane Pledge aimed to catalyze collective action among countries to reduce methane emissions by at least 30 percent from 2020 levels. Over 100 participating countries including Japan and Vietnam, have committed to this pledge. Yet, the development of Block B gas field clearly does not align to the goals of the Pledge.
At the 2022 G7 Summit in Elmau, Japan committed to ending international public financing for fossil fuels by the end of 2022. However, to this day, Japan continues to fund fossil fuel projects, directly contradicting this commitment.
Research showed that state-owned JBIC is the biggest financier of gas projects in Southeast Asia, contributing USD 3.3 billion from 2016 to 2023. This new commitment to back another gas development, alongside Japan’s Asia Zero Emissions Community (AZEC) initiative that manufactures demand for false solutions, will only hijack the urgent and necessary transition to clean energy.
Southeast Asia already has an estimated total of 328 gigawatts (GW) of planned renewable energy (RE) projects as of 2023. Vietnam leads in RE commissioning post-Paris Agreement, with more than half of the region’s commissioned capacities totaling 17.6 GW.
Japan should do better on this decarbonization momentum by redirecting financing toward the deployment and integration of renewables. While Vietnam should harness its rich renewable resources to leap towards an energy transition.
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