Written by: Basant El-Farmawy
The Japanese government has approved a new package of legislation aimed at securing and diversifying the supply chains for crude oil, petroleum products, and liquefied natural gas (LNG), in a move to enhance the resilience of the energy sector amid ongoing tensions in the Middle East.
Measures to Secure Maritime Transport and Insurance Coverage
Japanese Minister of Economy, Trade and Industry, Ryosei Akazawa, announced that the cabinet has approved three main bills to ensure the stability of energy supplies. These measures include providing protection and indemnity coverage, as well as partial compensation for cargo and hull insurance premiums for shipments of crude oil, refined products, and LNG. Through this program, the government aims to fill the potential gap should foreign reinsurers stop providing risk coverage, ensuring the smooth and unhindered continuation of maritime transport.
Support for Shipping Routes and Expanding the Powers of the National Organization
The approved projects included financial support packages for importers and refineries relying on sources far from the Strait of Hormuz region, provided they submit approved plans to rationalize maritime routes and diversify import sources. The legislative amendments also include expanding the scope of tasks of the Japan Organization for Metals and Energy Security, enabling it to provide debt guarantees and contributions to alternative pipeline projects, as well as supporting biofuel production projects, recycling batteries and mineral resources, and managing support programs for carbon capture and storage. These steps are based on the policy package launched by Prime Minister Sanae Takaichi to promote green transformation and energy security in the country.
