Japan Boosts Coal Power Amid LNG Import Uncertainty in Middle East Conflict

Japan's industry ministry plans to ease regulations on coal-fired power for one year, due to uncertainties stemming from the U.S.-Israel conflict with Iran, affecting LNG imports via the Strait of Hormuz. This strategic move aims to reduce LNG usage by roughly 0.5 million tons annually, addressing immediate energy needs.

Japan's ministry of industry has announced a temporary relaxation of rules surrounding its coal-fired power plants, effective for one year from April. This decision stems from pressing concerns over liquefied natural gas imports impacted by geopolitical tensions involving a U.S.-Israel confrontation with Iran, leading to a blockade in the Strait of Hormuz.

The country usually receives about 6% of its total LNG imports via this route, and the ongoing conflict has effectively closed this critical passage. In light of these challenges, officials argue that returning to coal power is a necessary measure as part of a broader strategy to conserve LNG resources.

This shift will suspend the current 50% cap on coal plant capacity utilization where efficiency is under 42%. The Ministry of Economy, Trade, and Industry (METI) anticipates this could result in saving 0.5 million tons of LNG annually. While this measure is a temporary solution, it underscores Japan's commitment to long-term decarbonization goals and diversification of its energy portfolio.

(With inputs from agencies.)