Japanese and Korean Coal Energy Financiers and Developers Under Fire from Asian Climate Activists
During a series of meetings by Japanese and Korean companies involved in coal energy, anti-coal protesters across Asia and Australia held protest actions to call on top financiers from Japan and Korea to adopt a total coal exit policy.
June 27, 2020
During more than a weeklong series of shareholders and board meetings held by Japanese and Korean companies involved in coal energy, hundreds of anti-coal protesters across Asia and Australia held rallies and other actions to call on top financiers from Japan and Korea to adopt a total coal exit policy. The rallies were held simultaneously in Tokyo, Seoul, Manila, Jakarta, Bangkok, Hanoi, Sydney, Kathmandu, Dhaka, Delhi, Kolkata, Lahore, and Karachi.
The protesters included people from communities around the sites of existing as well as planned coal plants and mines in Asia financed by these companies.
The series of annual general meetings of shareholders of major Japanese and Korean companies started with Marubeni, Mitsubishi and Sumitomo on June 19. These meetings were followed by Mizuho Financial Group and J-Power on June 25; Korea Electric Power Corporation (KEPCO) and Sumitomo Mitsui Banking Corporation (SMBC) today, June 26. Next week, on June 29, another online rally will be held to coincide with the shareholder meetings of Mitsubishi UFJ Financial Group (MUFG) and Tokio Marine.
“We are holding these actions to send a strong message to Asia’s dirty companies to end their support for coal-fired power plants. As peoples of Asia situated at the frontline of climate change’s adverse impacts, we denounce their deplorable policies on coal. Coal is the single biggest contributor to greenhouse gases from among fossil fuel energy sources. It pollutes air, water, and soil causing serious health and environmental impacts, affecting the lives and livelihoods of communities near coal plants and coal mines. It is exacerbating the climate crisis and leading us towards climate catastrophe,” said Lidy Nacpil, coordinator of Asian Peoples Movement on Debt and Development (APMDD).
She added: “While several of these dirty companies said they would no longer invest in new coal-fired power plants, loopholes built into their coal policies enable them to continue to finance coal power in Asia directly or indirectly. We demand a swift and total coal exit policy, which covers corporate loans, underwritings, bonds and shareholdings for coal-related companies, with clear timetables.”
Nacpil said it is urgent for these companies to immediately halt all forms of support for and involvement in coal.
“It is not enough to end support for new coal projects, they must also withdraw support for ongoing projects and operating coal-fired power plants. Their current policies are inconsistent with the Paris Agreement. The world must reach zero emissions before 2050 and actions in the next four to five years will spell the difference whether or not the climate goal can be reached,” she said.
The Paris Agreement's long-term temperature goal is to keep the increase in global average temperature to well below 2°C above pre-industrial levels; and to pursue efforts to limit the increase to 1.5°C, recognizing that this would substantially reduce the risks and impacts of climate change.
In addition to online mobilization, the groups are running email and twitter action campaigns targeting the directors and shareholders of the companies (find the email action here https://endfossilfuelsasia.net). They also issued an open letter calling on each company to make a total coal exit signed by grassroots movements in Asia and international civil society organizations. The letters were delivered directly to the companies.
“Support for total coal exit by dirty companies has been gaining momentum. Yesterday, Asian voices amplified the voices of Japanese campaigners to send a strong message to Mizuho shareholders to adopt a coal exit policy. The resolution was voted down but it garnered votes from one-third of the shareholders,” said Yuki Tanabe, Program Coordinator of Japan Center for a Sustainable Environment and Society (JACSES).
Mizuho, Japan’s third largest bank and the world’s largest private lender to coal developers, rejected a shareholder climate resolution at the annual general meeting Thursday. The resolution, the first of its kind in Japan, would have required Mizuho to disclose climate risks and publish a plan to ensure its investments are aligned with the Paris Agreement. The initiative garnered 34.5% of votes cast in advance of the meeting, short of the two-thirds required to pass.
Several high-profile global investors supported the motion, including Nordea Asset Management, a unit of Nordea Bank Abp with 235 billion euros ($265 billion) in assets under management, and Norwegian investment giants Storebrand ASA and Kommunal Landspensjonskasse.
“Japanese banks are among the world’s biggest lenders to coal power developers. While Japan and Korea top the list of providers of public financing for coal. Their investments in Southeast Asia drive carbon emissions in several countries in the region, especially in Vietnam and Indonesia,” said Tanabe.
Since January 2017, 307 commercial banks have provided US$ 159 billion in direct loans to coal plant developers, according to the report of the Global Coal Exit List published in December 2019. The top three lenders are Mizuho (US$ 16.8 billion), MUFG (US$ 14.6 billion) and SMBC (US$ 7.9 billion).
The three megabanks are involved in financing the controversial Vung Ang 2 coal-fired power plant in Vietnam. Hongkong power company CLP Holdings, Standard Chartered and Singaporean OCBC and DBS pulled out from the funding consortium for Vung Ang 2 after announcing coal policies.
Vung Ang 2 is among the projects in the pipeline of the Korean government-owned KEPCO. As of January 2020, KEPCO has 7,698 MW in announced, pre-permit and permitted projects, including the 2000MW Jawa 9 & 10 in Indonesia and the 1200MW Sual 2 in the Philippines.
Jawa 9 & 10 is the subject of a petition filed by Korean and Indonesian litigants opposed to the development of the project for environmental impacts. The plant would produce on average 10 million tonnes of carbon dioxide a year, which, over 25 years, would be 250 million tonnes of CO2, equivalent to the annual emissions of Thailand or Spain.
Sual 2 is a second power plant proposed to be built in Sual, Pangasinan, which hosts the 1,200-MW Sual power station, the Philippines’ biggest coal-fired power plant operating since 1999. The project cost of Sual 2 is estimated to hit $1.83 billion.
According to Joojin Kim, managing director of Solutions For Our Climate (SFOC), a Seoul-based non-profit organization, KEPCO is considering investing around $200m in Vung Ang 2, representing the 40% equity stake in the scheme held by CLP Holdings. He added that KEPCO is also considering taking an equity stake of $51m in the Jawa 9 & 10 project in Indonesia. KEPCO was expected to decide on Vung Ang 2 during the Board meeting held yesterday.
KEPCO has come under increasing pressure from investors and campaigners to drop plans to invest in Vung Ang 2 and Jawa 9 & 10 on account of the environmental and financial risks posed by the projects. Major KEPCO shareholders, including BlackRock, UBS Asset Management and the Church of England have challenged the company on its plans for these two projects on grounds of sustainability.
An assessment by the Korea Development Institute (KDI) of the Vung Ang 2 and Jawa 9 & 10 found that KEPCO stands to lose millions of dollars in the projects. For Vung Ang 2, KEPCO is predicted to lose approximately $158m over its lifetime or a net loss of about $80m. For Jawa 9 & 10, a final outcome loss of $43.58m for the plant, which would lose KEPCO around $7m.
South Korea is the third biggest public investor in overseas coal-fired power projects among G20 countries, according to a report by Greenpeace East Asia. Through its public finance agencies Korea Trade Insurance Corporation (K-Sure), Export-Import Bank of Korea (KEXIM) and Korea Development Bank (KDB), South Korea has invested a total of 7 trillion won or $5.9 billion in overseas coal projects between January 2013 and August 2019.