Japan’s net zero vision, primarily driven by its Asian Zero Emissions Community (AZEC) initiative, is creating significant tensions with Australia’s green energy ambitions. Japan’s approach to decarbonization emphasizes a slow transition, heavily reliant on extending the life of fossil fuels such as coal, oil, and particularly natural gas, while incorporating carbon capture technologies. This strategy is primarily motivated by Japan’s concerns over energy security, given its dependence on energy imports.
At the recent energy summit in Jakarta, Japan’s commitment to maintaining a strong focus on fossil fuels was evident. The country has been heavily investing in new gas projects in Australia, including a $2.5 billion loan to develop Western Australia’s Scarborough gas field. These investments are critical for Australia’s LNG industry, especially as global competition from lower-cost producers like Qatar intensifies.
However, this focus on fossil fuels by Japan poses a significant challenge for Australia. The Australian government, under the Albanese administration, has been pushing to establish the country as a renewable energy superpower. With major reserves of critical minerals essential for renewable energy technologies and world-class renewable resources, Australia is well-positioned to lead in green energy exports.
Yet, Japan’s continued investment in gas infrastructure in Australia diverts resources—such as investment capital, skilled labour, and supply-chain capacity—away from clean energy industries. This could hinder Australia’s progress in developing future-focused, green industries, locking the region into prolonged reliance on fossil fuels instead of fostering a transition to renewable energy.
The situation underscores a broader conflict between Japan’s energy security priorities and Australia’s ambitions to lead the Asia-Pacific region in clean energy exports. If Japan continues to prioritize fossil fuels in its net zero strategy, it could significantly impact the future of green energy in Australia and the wider region. MORE