Despite pledging to halt fossil fuel funding at the 2022 G7 summit, Japan has continued pouring billions into LNG projects, prompting accusations of greenwashing and undermining its climate leadership in Asia.

Japan has invested $93 billion in oil and gas projects between 2013 and 2024—$56 billion of which funded overseas liquefied natural gas (LNG) development—according to a new report by Solutions for Our Climate (SFOC). This figure starkly contrasts with the $24.5 billion Tokyo allocated for clean energy during the same period.

The investments raise questions about Japan’s climate commitments, especially following its 2022 G7 pledge to end public financing for fossil fuels. Critics argue the country is exploiting loopholes to continue supporting gas infrastructure under the guise of energy security and carbon capture technologies.

"Japan's international influence in energy financing is enormous," said Walter James, an energy policy consultant. "It spans the entire fossil fuel supply chain." The Institute for Energy Economics and Financial Analysis (IEEFA) reports that Japan has shifted from being a major LNG consumer to a reseller, with Australian LNG topping its re-export supply.

Japan justifies its LNG push by framing it as a “transitional fuel” for partner countries in the Asia Zero Emission Community (AZEC), a regional initiative launched after the G7 pledge. AZEC, which includes nations such as Indonesia, Malaysia, and Vietnam, focuses heavily on natural gas, ammonia, and carbon capture despite being billed as a net-zero initiative.

Environmental experts have expressed concern. Hiroki Osaka of Friends of the Earth Japan said the government’s tactics are “a form of greenwashing,” pointing out that projects deemed “abated” through carbon capture or essential for diplomacy are exempt from the G7 commitment.

Meanwhile, critics warn that Japan’s actions are locking countries like Indonesia into long-term fossil fuel use. Despite its vast renewable potential, Indonesia continues to expand LNG infrastructure, with a $1.5 billion project announced in March.

“Japan should skip gas and invest directly in renewables,” said Wicaksono Gitawon of CERAH, an Indonesian energy NGO. “More LNG means another infrastructure lock-in, and that stalls the energy transition.”

As Japan prepares for the third AZEC summit in Malaysia this September, its dual role as a green energy advocate and fossil fuel financier remains under increasing international scrutiny.

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