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Japan lists 7 items for supply action over current Russia dependence

  • March 31, 2022
  • , Kyodo News , 11:31 a.m.
  • English Press

The Japanese government on Thursday specified seven items including crude oil and liquefied natural gas as important commodities that need to be secured stably via producers other than Russia following the country’s invasion of Ukraine.

 

Under its emergency measures to secure strategic commodities and energy resources for which the nation is currently highly dependent on Russia and Ukraine, the government will encourage other producing countries to increase output and boost efforts to secure Japan’s position as destination for such boosted production, the industry ministry said.

 

The other commodities specified by the Economy, Trade and Industry Ministry are coal mainly used for power generation, coal used in steel manufacturing, neon and other gases utilized in the semiconductor making process, and the rare metal palladium and ferroalloys that are used to purify exhaust gas from vehicles.

 

The move came amid concerns that the imports of these critical items could be stalled due to the effects of economic sanctions by other countries against Russia, with the country possibly restricting supplies as a retaliatory step.

 

The emergency steps were decided at the first meeting of a government task force on strategic commodities and energy supply chains that has been set up by the industry ministry on instructions by Prime Minister Fumio Kishida.

 

Industry minister Koichi Hagiuda, who heads the task force, told participants “to work strategically and quickly, starting with measures that have immediate effects and lead to concrete achievements.”

 

Officials from the National Security Secretariat, Health, Labor and Welfare Ministry, Agriculture, Forestry and Fisheries Ministry and Land, Infrastructure, Transport and Tourism Ministry also joined the meeting.

 

The seven items were selected based on their high dependence on Russia and the difficulty of switching suppliers as well as the impact on the Japanese economy, the industry ministry said.

 

Crude oil from Russia accounts for 3.6 percent of Japan’s total imports, while LNG accounts for 8.8 percent. Coal for fuel and coking coal from the country account for 13 percent and 8 percent, respectively.

 

To break away from dependence on Russia, the government will promote expanding its interest in upstream production through Japan Oil, Gas and Metals National Corp. and help companies introduce energy-saving equipment, the ministry said.

 

To retain the supply chains related to semiconductors, Japan will establish a framework of cooperation with the United States and other countries, it said.

 

As for palladium, for which 43 percent of imports come from Russia, Japan will respond by procuring the item alternatively from countries other than Russia for the time being and will consider requesting domestic firms to increase production and supporting an expansion of recycling.

 

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