Japanese trading houses are speeding up their efforts to shift away from coal and other fossil fuel assets amid a growing decarbonisation push worldwide and to match an ambitious pledge by government of becoming a carbon neutral by 2050.
The move comes as the trading houses are re-thinking their long-term strategies around upstream investment, Wood Mackenzie Asia Pacific Vice Chair Gavin Thompson, said in a recent note. “If 2020 was a year for the re-evaluation of future plans, then 2021 looks to be the year of implementation,” he said.
For example, Itochu said on Thursday it will offload its stake in a Colombian coal mine, shedding 80% of its thermal coal assets, and will sell the remaining stake in two Australian mines “as soon as possible.” Mitsui is also pulling out from a coal mine in Mozambique after impairment losses reduced the book value of the stake to zero.
Others are also accelerating divestment, with Sojitz moving forward its plan to halve its thermal coal assets by 2030, CFO Seiichi Tanaka said.
Japanese trading companies have already stopped investing in new coal-fired power plants, but Marubeni is expediting its plan to halve its stakes in coal-fired power stations by 2030. “We will speed up as much as possible since contributing to combating global warming is a priority,” Maubeni CFO Takayuki Furuya said.
Known as “sogo shosha” in Japanese, trading houses play a key role in importing everything from oil to corn to sustain the resource-poor economy, but the recent divestment goes beyond coal amid an accelerating energy transition.