Arab-Japan Relations in a Changing Energy Landscape

Introduction

In an era of evolving energy landscapes and shifting geopolitics, the future of Arab-Japan relations — particularly with the United Arab Emirates (UAE) — is under scrutiny. These relations, once underpinned primarily by oil trade, are evolving due to shifts in energy demand, policy goals, and strategic visions. While the outlook is uncertain, two academic perspectives predominate: one foresees a decline in these relations due to decreased oil dependency, while the other emphasizes the potential for continued growth and cooperation across a range of fields. This paper aims to elucidate both viewpoints.

Perspective One: Decline Due to Decreased Oil Dependency

One argument holds that the Arab-Japan relationship could face decline as Japan makes progress in diversifying its energy portfolio. This argument revolves around the principle that Japan's strong push toward green energy and reduced carbon emissions could decrease its reliance on Arab oil, thereby affecting the vitality of bilateral relations. This view is grounded in the fact that Japan has initiated a substantial shift toward green energy adoption (Takahashi, 2020).

Japan's Green Growth Strategy, launched in 2020, underscores this shift by setting the ambitious goal of achieving a carbon-neutral society by 2050 (METI, 2014). The strategy outlines targeted policies and measures to promote renewable energy, energy efficiency, and advanced technologies such as hydrogen and carbon recycling. Its implementation could fundamentally reshape Japan's energy demand landscape, reducing the country's traditional dependence on oil and other fossil fuels. As Takahashi (2020) points out, Japan's trade ministry issued a "roadmap to shepherd Japan's economy away from fossil fuels, and foster growth in green energy industries to bring within reach Prime Minister Yoshihide Suga's pledge to eliminate net carbon dioxide emissions by 2050." The report calls for "strong government spending to subsidize and incentivize emissions reduction, and innovation in more than a dozen industries," detailing the potential economic growth achievable if the country reaches net-zero carbon emissions (Takahashi, 2020). The report provides "a tentative framework to support Suga's vow in October to achieve decarbonization within three decades" and "represents a major shift in the central government's attitude in treating renewable energy not as a barrier to economic growth but as a catalyst" (Takahashi, 2020). With this push, dependence on oil from the Middle East is expected to decline substantially.

Japan, as the world's third-largest economy, has been heavily reliant on Arab nations for its oil supply for many decades (IEA, 2021). In 2019, more than 80% of Japan's crude oil imports came from the Middle East, underscoring the region's importance to Japan's energy security (EIA, 2020). However, ongoing energy transitions — including the growth of renewable energy, the potential restart of nuclear power plants, and the rise of electric vehicles — are challenging this status quo. If Japan shifts away from fossil fuels, the nation will likely have less reliance on Arab states and therefore less interaction driven by energy dependency.

The surge in electric vehicles (EVs), for instance, could significantly reduce oil demand in the transportation sector. Japan, being home to automaking giants such as Toyota and Nissan, is a major player in the global EV market. The country aims to make all new passenger cars electric by 2050 (METI, 2014), a move that could substantially decrease oil imports over the long term.

In light of these developments, skeptics might suggest that the traditionally oil-centric ties between Japan and Arab nations are under significant stress. At the end of 2022, Arab News (2022) reported that while the UAE and Saudi Arabia accounted for 76.4% of Japan's oil needs, oil imports were actually trending downward. The argument, therefore, is that as Japan gradually lessens its oil dependency, the dynamics of its relationships with oil-rich Arab countries could change, potentially leading to a decline in bilateral relations. However, this is only one side of the issue.

Perspective Two: Continued Growth and Cooperation

Conversely, another side of the debate offers a more optimistic outlook: despite shifts in Japan's energy landscape, there are strong reasons to anticipate continued growth and cooperation between Japan and the Arab world, especially the UAE (Abdullah & Al-Tamimi, 2015). This outlook rests on the premise that Japan is not seeking to discontinue its relationships with the Arab world but, rather, to diversify them — just as it is diversifying its energy sector at home (Al-Faheem, 2022). As Al-Faheem (2022) explains, the relationship between Japan and the UAE goes back more than half a century, and "the strong ties between the countries are not restricted to tourism or economic and energy domains." This means there is a solid historical foundation upon which the two states can build a relationship even as Japan transitions to cleaner energy.

The relationship is also one in which both states share corresponding visions for the 21st century. As Al-Faheem (2022) notes: "We now see diversified economic co-operation, with the UAE hosting approximately 340 Japanese companies. According to a survey by the Japan External Trade Organisation, 75 per cent of Japanese companies in the UAE regard the 'merits of free zones and special economic zones' as one of the biggest advantages of doing business in the country. And despite the challenges of the pandemic, new horizons of economic co-operation have emerged between the UAE and Japan, such as Japan's first fuel ammonia and carbon recycling co-operation agreement with the Abu Dhabi National Oil Company. Numerous other agreements in the energy field have further illustrated the growth of UAE-Japan economic ties. In 2021, the UAE and Japan signed a hydrogen co-operation agreement, aiming to enhance investment in the hydrogen sector while realising joint ambitions to accelerate the energy transition towards a low-carbon future." Furthermore, this partnership supports "the direction of the two countries to fulfill commitments to combat climate change made under the Paris Agreement. Both the UAE and Japan have announced plans to achieve Net Zero Carbon Emissions by the year 2050, and the UAE hosted the climate summit COP28 to bring together world leaders in driving this change" (Al-Faheem, 2022).

Al-Faheem (2022) summarizes the growth prospects of Japan-Arab ties with the following observation: "In bringing the world together to inspire future generations, Japan will host an Expo where participants will develop solutions to contemporary challenges and send a message of solidarity to the international community. Fifty-five years after the UAE's first appearance at Expo, the UAE will proudly stand with Japan in celebrating how far both countries have come as partners and as global beacons of prosperity, development and growth." What emerges from these remarks is an alliance grounded in issues that matter — climate change, social welfare, international respect and cooperation, and genuine economic growth — a relationship that is positioned to prosper rather than decline in the coming years.

Jamal Abdullah and Dr. Naser Al-Tamimi of the Al-Jazeera Centre for Studies noted that "although Japan has drawn up an ambitious policy to diversify its energy sources and imports, it will continue to import large amounts of oil and LNG over the next two decades. Since these goods are vital for global economic growth, Japan cannot ignore repercussions of developments in the Middle East region. In particular, the Fukushima disaster and its aftermath affirmed the importance of the Gulf region to Japanese decision makers. Japan also has pioneering experience in the field of energy efficiency, which all countries in the region can benefit from. In addition, the new developing energy trends in the GCC countries include more energy efficiency in buildings, district cooling, and smart grids. These trends increasingly affect the direction of their energy policy. It is likely that the Gulf countries will allocate billions of dollars for renewable energy projects in the coming years, and this in turn would open the way for Japanese companies to invest and develop relations in the new sectors in the region" (Abdullah & Al-Tamimi, 2015).

Researchers also highlight the UAE's ambition to diversify its economy as outlined in its Vision 2021, and its strides in non-oil sectors such as renewable energy, technology, security, tourism, and cultural exchange as viable areas for increased collaboration. With COP28 in view, the UAE's commitment to sustainability — exemplified by the Noor Abu Dhabi Solar Plant — demonstrates a readiness to partner with Japan on sustainable solutions at the global stage. The Noor Abu Dhabi plant "is one of the first initiatives to deliver the UAE's Energy Strategy 2050. Having more than 1,200 MW capacity of fully operational photovoltaic technology marks a significant milestone" (Noor Abu Dhabi, 2023).

The importance of technology partnerships also reinforces this optimistic outlook. The UAE's investment in Japan's technology sector, and Japanese companies' keen interest in the UAE's thriving digital market, form a strong basis for continued cooperation (Al-Faheem, 2022). The recent surge in bilateral security agreements and Japan's ongoing involvement in regional maritime security further reinforce the strength of their relationship (Al-Faheem, 2022).

Conclusion

The future of Arab-Japan relations is indeed unfolding at a juncture of various dynamic forces. From an energy perspective, the shift from fossil fuels to renewable energy sources is triggering changes in the relationships between traditional oil exporters, such as the Arab nations, and importers like Japan. As Japan marches toward its goal of a carbon-neutral society, the nature of its interaction with Arab nations — particularly the UAE — is bound to transform.

Simultaneously, mutual interests beyond oil are emerging as critical building blocks of Arab-Japan relations. The growth perspective suggests that these shared interests can create new avenues for cooperation. Japan's technological prowess aligns well with the Arab nations' desire for digital transformation. Furthermore, the UAE's ambitious plans for economic diversification and sustainable development present opportunities for Japanese firms specializing in renewable energy, infrastructure, and digital technologies.

Crucially, both Japan and Arab nations appear to recognize that adapting to the changing global landscape is not merely a choice, but a necessity for survival and growth. The UAE's Vision 2021 and Japan's Society 5.0 are testament to their shared commitment to innovation and forward-thinking. Consequently, the evolving narrative of Arab-Japan relations is likely to be one of transformation as both sides navigate these dynamics. Their ability to turn challenges into opportunities, to leverage their respective strengths for mutual benefit, and to foster cooperation across a diverse array of fields will shape the future of their relationships in the post-oil era.

References

Abdullah, J. & Al-Tamimi, N. (2015). Japanese–Gulf Relations: What's next after Energy? Al-Jazeera Centre for Studies.

Al-Faheem, S. (2022). The UAE and Japan's partnership goes back 52 years, to the Expo in Osaka. The National News.

Arab News. (2022). UAE and Saudi Arabia provide 76.4% of Japan's crude oil needs in November. Arab News.

EIA. (2020). Country Analysis Executive Summary: Japan. U.S. Energy Information Administration.

IEA. (2021). Japan 2021 Energy Policy Review. International Energy Agency.

METI. (2014). Strategic Energy Plan. Ministry of Economy, Trade and Industry of Japan.

Noor Abu Dhabi. (2023). World's Largest Standalone Solar Power Plant.

Takahashi, R. (2020). Japan lays out plan to steer economy away from carbon by 2050. The Japan Times.