TOKYO – Japan and Singapore will work together to promote investment in decarbonization efforts, from installing renewable capacity to more transitional stages like replacing coal with natural gas.
Hiroshi Kajiyama, the Japanese Minister of Industry, and his Singaporean counterpart, Gan Kim Yong, agreed at a recent meeting to establish a dialogue for the energy transition, to deepen the cooperation of their ministries to secure the financing decarbonisation projects.
Drastic changes, such as a sudden shift from fossil fuels, could derail emerging Asian economies. Japan and Singapore are seeking to ensure that investors are also interested in more gradual efforts, such as a shift from coal power to less carbon intensive liquefied natural gas.
Last month, Japan’s Ministry of Economy, Trade and Industry announced its Basic Guidelines on Climate Transition Finance, created in cooperation with the Ministries of Environment and Finance. According to the guidelines, the ministry is seeking to give companies that articulate their decarbonization plans easier access to finance, a concept it plans to share with its Singaporean counterpart.
Meanwhile, Singapore is creating a so-called taxonomy to help investors identify environmentally friendly activities: green for sustainable activities, yellow for transition activities, and red for carbon-intensive activities. Japan could also cooperate with Singapore to smooth out this framework.