Japan to ease coal power restrictions amid Mideast energy crisis

Japan's government plans to temporarily lift restrictions on coal-fired power plants to address an energy crunch from the Middle East war. Officials presented the plan to a panel of experts, who approved it, the industry ministry said. The measure allows full operation of older, less efficient coal plants for a year starting in the new fiscal year from April.

Japan's government announced on Friday plans to temporarily lift restrictions on coal-fired power plants to ease an energy crunch triggered by the Middle East war. An industry ministry official told an online-broadcast meeting of experts that "the current situation in the Middle East affecting fuel prices" has increased "uncertainty regarding future LNG procurement." He added, "it will be necessary, by increasing the operation of coal-fired power plants, to ensure the reliability of stable supply."

Power suppliers had previously been required to keep the operating rate of high-emitting coal-fired stations at or below 50 percent. The new plan permits full operation of older, less efficient plants for one year from the new fiscal year starting April, according to the ministry's website.

Thermal power generates around 70 percent of Japan's electricity, with coal making up 30 percent of the fuel, LNG 30 percent, and oil seven percent. The measure is estimated to save about 500,000 tonnes of LNG, the official said.

Yoko Mulholland of climate think-tank E3G told AFP the plans "deepen the risk that Japan will not meet its goal of phasing out inefficient coal plants by 2030." She warned it could "lock Japan into a vicious cycle of fossil-fuel dependence" and delay Prime Minister Sanae Takaichi's goal of 100 percent domestic energy self-sufficiency. "This crisis has laid bare the risks of relying on imported fossil fuels, and now is the time for Japan to shift course to fully embrace renewable energy as a strategic national asset."

The war prompted Iran to partially close the Strait of Hormuz and target Gulf energy facilities, leading other Asian nations to coal. South Korea plans to lift coal capacity caps and boost nuclear output; the Philippines aims to increase coal-fired generation. Japan, the world's fifth-largest oil importer, sources over 90 percent of its oil and 10 percent of LNG from the Middle East. It imports nearly 80 percent of coal from Australia and Indonesia, per the Agency for Natural Resources and Energy. Tokyo also began releasing strategic oil reserves on Thursday.

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Tokyo stocks declined for a third consecutive day as tensions escalated in the Middle East over Iran. Bank of Japan Governor Kazuo Ueda warned of significant potential impacts on the economy, while the government stated there would be no immediate disruptions to oil supplies.

The Japanese government is weighing the use of part of its national oil reserves due to supply disruptions from the Iran crisis. Kyodo News reported on Friday that the Strait of Hormuz is effectively closed, affecting imports. Officials plan to monitor the situation and possibly coordinate with other countries.

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The Japanese government plans to sell crude oil from national reserves at prices from before the Iran war. Officials expect refiners buying at these low prices will not then sell their products at higher rates to pocket extra profits.

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