Finance from G20 countries steers gas expansion in Southeast Asia — think tank
BALI, Indonesia — Financial support from G20 nations such as Japan is fueling the boom of fossil gas and liquefied natural gas in Southeast Asia, taking the region further away from a clean energy future, a sustainability think-tank reported.
Southeast Asia is swiftly turning from coal’s last bastion to Asia’s fossil gas hub, the Center for Energy, Ecology and Development said at the sidelines of the G20 Leaders’ Summit in Indonesia.
Vietnam has the largest planned gas expansion, with 56.3 GW in pre-construction and construction stages, followed by the Philippines with 29.9 GW in development.
San Miguel Corporation’s proposed projects account for half of the planned gas expansion in the Philippines and are also the largest in the region.
The conglomerate recently withdrew its application for an Environmental Compliance Certificate (ECC) for its proposed 300-megawatt (MW) LNG combined cycle power plant project in San Carlos City, Negros Occidental — a victory for clean energy advocates in the island. Negros island is dubbed as the renewable energy hub in the country.
Meanwhile, Indonesian state-owned PT Perusahaan Listrik Negara (PLN) has the highest number of gas-fire power plants that have been built and proposed in Southeast Asia since 2016.
"Economics now means that global gas use is expected to reach its peak this decade, no matter how high the level of climate ambition. Solar, wind, batteries, digital technologies combined are ready to form a powerful package that outcompetes gas in the power sector," said Lisa Fischer, gas expert at think tank E3G.
CEED reported that 123 financial institutions channeled 33.4 billion into the fossil gas industry in Southeast Asia after the signing of the landmark Paris Agreement, which targets to limit warming at 1.5 degrees Celsius.
Japanese banks Sumitomo Mitsui Financial and Mizuho Financial, and Singapore’s DBS Bank were the biggest financiers of fossil gas in the region.
Filipino and Japanese green groups recently wrote a letter to Japan Bank for International Cooperation, which has investments in the Atlantic Gulf & Pacific (AG&P). The groups asked JBIC to withdraw from the company’s planned LNG terminal in Batangas that is seen to threaten the biodiversity-rich Verde Island Passage.
“On an annual average, Japan led the G20 countries in public finance for fossil fuels… These are all under the guise of international cooperation, helping Asian countries transition toward decarbonization,” said Makiko Arima, Japan finance campaigner of Oil Change International.
CEED also said that banks in the United States and the European Union are also among the biggest financiers of gas industry in Southeast Asia.
Not a solution to climate, energy crises
The Philippines is turning to LNG imports in anticipation of the depletion of Malampaya deep water gas-to-power project. The Marcos administration earlier called on Congress to enact a law that will foster the midstream natural gas industry.
Gas has been pitched as a “bridge fuel” that can support decarbonization efforts.
Climate and clean energy campaigners argued that increasing the share of LNG infrastructure is not a decarbonization strategy as it is primarily composed of methane — a more potent greenhouse gas — which leaks into the atmosphere at every stage of its life.
An analysis from Climate Action Tracker released last week found that the global scramble for fossil gas after Russia’s invasion of Ukraine threatens the 1.5 degrees Celsius goal.
The resulting emissions — some two billion tons of carbon dioxide annually by 2030 — are incompatible with pathways to a carbon neutral world by mid-century, including one laid out by the International Energy Agency.
CEED deputy executive director Avril de Torres said that countries attending the G20 summit in Bali must recommit and realign their investment activities toward renewable energy by terminating financing for fossil fuels and gas.
She stressed that gas projects trigger rising electricity prices, threaten the environment, and hinder the transition to clean energy.
“This mad dash for gas in Southeast Asia will bring us neither energy security, nor solution to the climate crisis,” de Torres said.
Centre for Research on Energy and Clean Air Southeast Asia analyst Isabella Suarez said the LNG buildout in the Philippines is “unnecessary.”
“They are very much an overinvestment and then overplanning of a lot of this infrastructure,” she told Philstar.com.
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This story was supported by Climate Tracker Asia.
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