The think tank Center for Energy, Ecology, and Development (CEED on Monday said public and private finance from G20 members such as Japan, the European Union (EU) and the United States are steering the boom of fossil gas and liquified natural gas (LNG) in the Southeast Asian region a day before the start of the 2022 G20 Summit in Bali, Indonesia.
CEED made the observation in its newest report titled, “Financing a Fossil Future: Special Report on High Prices and Fossil Gas Expansion in Southeast Asia” launched at a side event at G20 Summit.
The report tracks the activities of developers and financial institutions from January 1, 2016 to March 31, 2022— with an eye on fossil gas and LNG expansion in the region.
“This latest report illustrates the grim portrait of just how chain-locked SEA is to more fossil fuels and how G20 countries co-opted this with Japan responsible for a lion’s share of these investments having three of the biggest financiers across the region. The rich, polluting countries are the cause behind SEA’s climate transition handicap and rising electricity prices across the region,” said CEED deputy executive director Avril de Torres.
Vietnam leads the region’s planned gas expansion, with 56.3 GW in pre-construction and construction stages.
The Philippines is second with 29.9 GW in development. Philippine conglomerate San Miguel Corp.’s (SMC’s) 14.1 GW of proposed projects accounts for half of the planned gas expansion in the Philippines and is also by far the largest in the region.
“The emerging LNG market in SEA is hampered by several uncertainties such as the unaffordability of LNG and fuel supply insecurity. A strong economic case against LNG has been illustrated by two projects in the Philippines that have been deferred to next year and must serve as a warning to investors of the possible stranded risks due to the volatility of the global market,” said Sam Reynolds, energy finance analyst of the Institute for Energy Economics and Financial Analyst.
The report also cited rising power rates across SEA countries triggered by rising fuel costs and energy crises.
The Philippines’ residential electricity rates outside Metro Manila are on the verge of doubling average rates in 202, alongside Thailand, Indonesia, and Singapore’s series of increases in electricity tariff rates due to the high prices of LNG imports.
“Japan is the world’s top fossil fuel financier, delaying the transition to renewables and worsening the climate crisis.
Japan has committed to ending public financing for international fossil fuel projects by the end of 2022. As part of theG7, Japan must fulfill its commitment and support a just transition to clean energy,” said Makiko Arima, Japan finance campaigner of Oil Change International (OCI).
“The G20 presidency is expected to tackle economic plans banking on the spirit of recovering together but in order for this to go beyond messaging, wealthy countries must recommit and realign their investment activities towards renewable energy. It is only through the termination of any and all financing for fossil fuels and gas that the region can avert the double threat of energy and climate crises,” de Torres said.