Japan Accuses Australia of Betrayal Over New Carbon-Emissions Rules: 'Might Undermine Long-Trusted Relations'

Japan has accused Australia of betrayal over new carbon-emissions rules that could threaten Tokyo’s energy security, The Wall Street Journal reports.

What Happened: The Australian rules, effective from July 1, mandate new liquefied natural gas (LNG) facilities to be carbon-neutral from day one. Japan, which relies on Australia for over 40% of its natural gas needs, fears this could hinder the operation of new LNG export terminals in Australia.

"If this issue cannot be resolved, this might undermine long-trusted relations,” said Yuki Sadamitsu, director-general of natural resources and fuel at Tokyo's Ministry of Economy, Trade and Industry.

“It's like changing the rules of the game after the game has started,” said Tatsuya Terazawa, head of the Institute of Energy Economics Japan.

See Also: Japan In Regular Touch With Janet Yellen, US On Currency Movements, Says Top Financial Diplomat: Reuters

What’s Next: Japan is seeking exemptions for projects close to starting operation or a grace period. The $5.8 billion Barossa Gas Project, in which Japanese energy company Jera owns a 12.5% stake, is one such project that Japan has formally sought an exemption for.

If Australia doesn’t change course, the project may have to be postponed or even canceled entirely, warns Sadamitsu.

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