TOKYO (Reuters) - Japan's trade ministry is asking to more than triple the amount of subsidies next fiscal year to support companies developing gas and oil fields abroad, aiming to take advantage of a rise in the yen and to secure stable energy supply.
Next year's budget for the energy sector is also focused on the reconstruction led by clean energy and fuel efficient cars while spending more on safety of nuclear power plants, the ministry said on Thursday.
While Japan is starting to draft the next fiscal year's budget, it is also considering a third extra budget for fiscal 2011/12. In the wake of the March earthquake and tsunami, the government has already allocated 6 trillion yen to disaster relief in the past two emergency budgets.
In the third additional budget, expected to be finalized by mid-October, the trade ministry has requested to use subsidies of more than $6 billion to help companies fight against the surging yen.
"To tackle the surging yen and avoid hollowing out of industries, we're making the best use of the third supplementary budget," trade minister Yukio Edano said at a news conference on Thursday.
"(Companies) can take advantage of the surging yen by enhancing M&As and investing in stakes in resource projects. We're supporting such businesses, as well," he said.
Below are some of the details of a 2012/13 budget the trade ministry is requesting:
- Of the total 69.4 billion yen ($908 million) for financial support to obtain stakes in gas and oil fields abroad, 41.5 billion yen would be used for new investment. The remaining includes spending for capacity building and other features to make the offer from Japanese companies attractive.
- Requesting to allocate 45.7 billion yen for subsidies to promote electric cars and other fuel efficient cars, up 50 percent from those in the initial 2011/12 budget.
- Requesting to allocate 47.7 billion yen for subsidies to develop advanced technologies in the renewable energy sector, compared with 34.6 billion yen in the initial 2011/12 budget.
- Requesting new subsidies of 10.3 billion yen for development of geothermal power.
- To maintain subsidies for house owners to put solar panels on the roofs in 2012/13, but the amount will be decided when the third extra budget is finalized.
- Reducing subsidies for long-term projects in the nuclear sector, such as development of next generation nuclear reactors. Subsidies to ensure safety and improve communication over the impact of radiation leakage are increased.
- Subsidies to local communities hosting nuclear reactors are in line with pre-set allocation guidelines, down by 9 billion yen from the initial 2011/12 budget.
- Requesting subsidies of 2.5 billion yen for feasibility studies into emissions-cutting measures in developing countries,
aimed at developing an alternative to the U.N.'s carbon market. ($1 = 76.425 Japanese Yen)
(Reporting by Risa Maeda)
Director of Minnesota's Troubled Obamacare Exchange Resigns Following Tropical Vacation | Guy Benson