The EU and Japan agreed on July 18 to strengthen their energy cooperation by establishing an EU-Japan dialogue on energy security in the global liquefied natural gas (LNG) architecture.
Towards a global LNG architecture based on market transparency and energy security
The dialogue will focus on three pillars: global security of supply, market transparency and the reduction of methane emissions in the LNG supply chain, reinforcing the EU’s strategic partnership with Japan. The parties met today at the LNG Consumer Conference 2023, currently taking place in Tokyo. The decision to establish this dialogue follows the EU-Japan summit on July 13, 2023 in Brussels.
“The EU and Japan will leverage their expertise in developing resilient energy security policies based on cooperation between regions and countries”, according to an EU statement
“The parties consider energy market transparency to be the backbone of security of supply and therefore believe that it should be part of the future global LNG architecture”, according to the same statement.
The leaders agreed to intensify their cooperation to develop secure and transparent global LNG markets. But also by reducing methane emissions, in line with the global methane commitment. With regard to global LNG security of supply, the dialogue will facilitate collaboration on a global early warning system.
The EU and Japan will draw on their decade-long expertise in developing resilient energy security policies based on cooperation between regions and countries to prevent and ultimately cope with energy crises. The EU will also share its security framework, reinforced for the 2022 supply shock, supported by a pan-European gas storage policy and the gas demand aggregation tool. In addition to bilateral cooperation, Japan and the EU will continue their engagement with the International Energy Agency (IEA) and proactively contribute to discussions on the IEA’s role in the gas sector.
EU and Japan: Enhancing LNG security through energy market transparency
The parties consider energy market transparency to be the backbone of security of supply, and therefore believe it should be part of the future global LNG architecture. To this end, it is necessary to improve the exchange of critical data relevant to energy security in both consuming and producing regions.
“The EU will also share its security framework, reinforced during the 2022 supply shock, supported by a pan-European gas storage policy and the gas demand aggregation tool, AggregateEU,” he said.
Already today, the EU is a world leader in providing comprehensive information on its electricity and gas systems. The latest agreement follows an EU-Japan summit on July 13 in Brussels where the two parties, two of the world’s largest LNG importers, agreed to intensify their cooperation to develop secure and transparent global LNG markets. According to data from S&P Global Commodity Insights, EU LNG supply amounted to 97 million mt (133 Bcf). Japan’s LNG imports in 2022 amounted to 72 million tonnes, according to official data from S&P Global.
All 169 million tonnes imported by the EU and Japan. This represented some 42% of total world LNG trade last year. The EU and Japan already agreed last May to cooperate and help each other to ensure security of LNG supply, and to work together to reduce Europe’s dependence on Russian imports through diversification.
At the time, they said they would cooperate “to maintain the stability of global energy markets and help ensure each other’s security of supply, particularly for LNG supplies.”
Japan’s united response to gas shortages: EU and Japan on the road to a shared energy future
Since 2022, the EU has further improved transparency with regard to LNG terminals, price indices and gas storage with the European Transparency Platforms and the ACER LNG benchmark. From a climatic point of view. The EU and Japan will continue to work together to reduce methane emissions in line with the Global Methane Commitment and the Joint Statement by Energy Importers and Exporters on Reducing Greenhouse Gas Emissions from Fossil Fuels. Through this framework, they will cooperate in monitoring, reporting and verifying methane emissions, and in promoting reduction measures, thereby helping to improve energy security worldwide.
The EU-Japan dedicated dialogue project is a step towards a safer, more sustainable energy future. By working together, the EU and Japan are demonstrating their commitment to finding global solutions to global challenges. The initiative is open to cooperation with other partners who share the same vision of a secure and sustainable energy future. The energy crisis of 2022 has highlighted the need for a global solution. Enabling the achievement of energy security and decarbonization objectives based on shared values and a commitment to multilateralism.
In response to concerns about natural gas shortages in the EU and requests to divert LNG to Europe. Japan showed solidarity as long as the stability of its own supply was assured. The EU and Japan continue to support initiatives aimed at ensuring global energy security. They will explore ways of cooperating more closely on security of supply. As well as flexibility solutions aimed at providing appropriate support on a G7 basis
CLEAN: Initiative to reduce methane emissions in the LNG value chain launched by JERA and Kogas
The European Commission and Japan also co-signed a declaration on July 18. It reinforces ongoing efforts to reduce methane emissions throughout the LNG value chain, from production to consumption.
The joint declaration was signed by the EC, Japan, the USA, South Korea and Australia in Tokyo at the LNG producer-consumer conference. The initiative builds on already strong cooperation between the EU and other world leaders. Particularly in terms of methane reduction throughout the gas value chain. According to the declaration, the five parties have agreed to work together to reduce greenhouse gas emissions, particularly methane, from all LNG imports and exports.
“Participants reiterated their commitment to the Global Methane Commitment, led by the US and EU and launched at COP26 in November 2021,” the statement reads.
They agreed to continue their cooperation to achieve the objectives of the commitment. In particular, to reduce methane emissions in the fossil fuel sectors so as to cut global methane emissions by at least 30% by 2030, compared with 2020 levels.
Japan’s Entrepirse JERA and South Korea’s Kogas also launched a Coalition for LNG Emission Abatement towards Net-zero (CLEAN) initiative on July 18. CLEAN is an initiative taken by LNG buyers, in collaboration with LNG producers, to reduce methane emissions in the LNG value chain. In a statement, JERA said that both companies recognize LNG as a transitional energy for a decarbonized society. They believe that efforts to reduce emissions in the LNG value chain will become more important in the future.
“We will work to increase the visibility of methane emissions through dialogue with LNG producers, and to develop and disseminate best practices to reduce methane emissions,” said JERA.
Kogas and JERA also confirmed that they would strengthen their strategic relationship and work to ensure a stable energy supply for South Korea and Japan, he said.
