Three Resource Security Bills Approved to Strengthen Energy Supply
Overview
The government approved three bills on resource security at a Cabinet meeting. Their main measures are diversifying transport routes for crude oil and other resources, ensuring the fulfillment of maritime transport insurance, and expanding JOGMEC's operations. In light of structural changes around the world, including the situation in the Middle East, the government aims to strengthen the energy supply and demand structure and fundamentally improve procurement stability by diversifying sources and transport routes for fossil fuels and reducing procurement risks. The bills are scheduled to be submitted to the 222nd Diet.
Key points
- Grants will be provided to businesses working to make the use of designated waterways more efficient, and contributions will fund the system.
- The government will provide grants to domestic non-life insurance companies to support the fulfillment of necessary insurance obligations.
- JOGMEC's operations will be expanded to include investments in and debt guarantees for resource and fuel businesses, as well as subsidies for CCS.
Overview
In response to structural changes in the global energy landscape, including the situation in the Middle East, the government approved three bills on resource security at a Cabinet meeting. The bills are scheduled to be submitted to the 222nd Diet, which is currently in session.
The bills establish frameworks covering crude oil and other transport, maritime transport insurance, and resource and energy businesses to diversify procurement sources and transport routes and strengthen the supply structure.
Impact
The government aims to fundamentally improve procurement stability by diversifying procurement of fossil fuels, including crude oil, and reducing risks.
Details
The Bill on Rationalizing the Use of Designated Waterways to Ensure the Stable Transport of Crude Oil and Other Resources responds to the prospect of being unable to pass through the Strait of Hormuz for an extended period. It will support businesses working to make use of designated waterways more efficient through grants and collect contributions from manufacturers and importers of designated petroleum products.
The Bill on Special Measures to Ensure the Fulfillment of Specific Cargo Insurance Contracts and Specific Ship Insurance Contracts addresses cases in which measures by foreign governments or other parties prohibit foreign insurers from underwriting reinsurance, making it difficult to conclude or continue contracts. The government will provide domestic non-life insurance companies with the amount needed to fulfill their obligations.
The Bill to Partially Amend the Act on the Japan Organization for Metals and Energy Security will add investments in and debt guarantees for crude oil and other transport businesses, biofuel and other fuel production businesses, and metal recycling businesses, as well as grants for CCS, to JOGMEC's operations.