The Strategic Energy Plan is formulated by the Ministry of Energy, Trade, and Industry (METI) with input from relevant ministries “at least once every three years” to set the path for energy policy in Japan. The latest 6th Strategic Energy Plan approved by the Cabinet in October 2021, details the 2030 target shares of electricity sources and the energy supply-demand overview to 2050.
The 7th Basic Energy Plan will be formulated in FY2024, and the next NDC will be decided based on this plan.
It is expected that this plan will be actively discussed at the Basic Policy Subcommittee of the Agency for Natural Resources and Energy and at related councils and study groups organized by the Ministry of Economy, Trade and Industry.
2030 Energy Mix Target
In 2030, the current Basic Energy Plan anticipates a reduction in energy consumption by 62 million kl through energy efficiency and population decline. Based on this, Japan’s 2030 electricity mix is set to be comprised of: 41% fossil fuels (LNG 20%, Coal 19%, Oil 2%) and 36~38% Renewables (Solar 14~16%, wind 5%, geothermal 1%, hydro 11% and biomass 5%), nuclear 20~22%, and 1% hydrogen/ammonia power generation. Along with the target, the government emphasizes the importance of securing the 3E+S principles (Energy security, Environment, Economic Efficiency and Safety) in implementing energy policy. The Basic Energy Plan also promotes next generation, high-efficiency thermal power, while phasing down inefficient coal-fired power.
Towards 2050
Towards meeting the 2050 carbon neutrality goal, the government aims to maximize the introduction of renewable energy, including solar, wind, geothermal, biomass, as well as hydrogen. The government also considers nuclear a key source of baseload power for Japan. The discussion on restarting nuclear operation and development of Next Generation Nuclear Furnace has emerged at the GX Executive Council and the Basic Policy Meeting by METI. Regarding fossil fuels, while the government mentions the importance of decarbonization through CCUS technology and synthetic fuels, it also positions them as a major energy supply source, for example by promoting strategic surplus LNG. The government also plans to co-fire hydrogen and ammonia in thermal power generation to reduce greenhouse gas emissions during combustion (For more details, please refer to the "Clean Energy Strategy” page).
Coal Policy in Japan
Strategic Energy Plan states that an “appropriate thermal portfolio” of LNG, coal and oil power will be maintained towards 2030, while lowering the ratio of thermal power in the energy mix “as much as possible” while ensuring the “stability” of power supply. The Plan pursues the “fadeout of inefficient thermal” power while seeking to promote next generation/high efficiency thermal power. Moreover, the discussion around the development of ammonia co-firing with coal has been progressing (see section ‘Clean Energy Strategy’ for more details). The government also promotes technological development of high efficiency coal-fired power generation technologies, such as Integrated Coal Gasification Combined Cycle (IGCC), and Integrated Gasification Fuel Cell (IGFC).
At COP28 in December 2023, Prime Minister Kishida stated, "We will terminate the construction of new domestic coal-fired power plants without emission reduction measures," but did not mention the phase-out of coal-fired power generation without emission reduction measures.
At the G7 Climate, Energy, and Environment Ministerial Meeting held in Turin, Italy, in April 2024, the communique limited its mention on phase out as "phasing out existing coal-fired power plants that have not taken emission reduction measures”.
The Japanese government announced a new Basic Hydrogen Strategy in June 2023. This is a revised version of the world's first national strategy related to hydrogen, which was released in 2017. In addition to the overall policy for Japan's hydrogen policy, the Basic Strategy includes a new "Hydrogen Industry Strategy" to strengthen the industrial competitiveness of hydrogen and a "Hydrogen Safety Strategy" for mitigating risk. The former aims to create a world where Japan's core hydrogen technologies (fuel cells, water electrolysis, power generation, transportation, and materials of the part, etc.) are utilized in all hydrogen businesses, taking advantage of its technological strengths. In the latter, environmental improvements such as rationalization and optimization of safety regulations will be implemented to realize a safe and secure hydrogen society. The strategy also covers hydrogen compounds such as ammonia, synthetic methane (e-methane), and synthetic fuels (e-fuel). The strategy also states that "carbon intensity targets for hydrogen and ammonia need to be set in order to steadily promote carbon neutrality. The importance of this target was recognized in the Ministerial Statement at the G7 Sapporo Ministerial Conference on Climate, Energy, and Environment and at the Hiroshima Summit, and now the government intends to set a low-carbon target that is consistent with international standards and promote the introduction of hydrogen that meets this target.
The Interim Clean Energy Strategy, released in May 2022, organized supply-side energy strategies and demand-side energy transition strategies. The energy strategy includes ammonia co-firing, a topic that has emerged since the October 2021 release of the Long-Term Strategy as a growth strategy based on the Paris Agreement. The strategy aims to co-fire 20% of ammonia with coal by around 2030. Ammonia, whose molecular formula is NH3, does not emit CO2 when burned. The GX Economic Transition Bonds, for which the first bidding was held in February 2024, did not include fuel ammonia projects. The IPCC does not mention ammonia co-firing. The government considers "thermal" power generation as a base load power source necessary to stabilize electricity supply from renewable energy sources and is encouraging its decarbonization. The government aims to reduce greenhouse gas emissions in coal "thermal" power generation by increasing ammonia co-firing rates. The Interim Arrangement of the Clean Energy Strategy did not include any mention of decarbonization of the ammonia production process.
Based on the above interim arrangement of the strategy, the "The first GX Executive Committee" chaired by Prime Minister Kishida was convened in July 2022.
Based on discussions at the "GX Executive Committee" and at the councils of various ministries and agencies, as well as public comments, the "Basic Policy toward the Realization of GX" was approved by the Cabinet in February 2023.
In order to realize stable energy supply and economic growth at the same time, in the electric power sector, decarbonization efforts toward GX will be promoted, including a shift to decarbonized power sources such as renewable energy and nuclear power that contribute to energy self-sufficiency.
In the hydrogen and ammonia policy, a price differential support system focusing on the price differential with existing fuels will be introduced to build production and supply networks, and a comprehensive institutional design will be implemented, including the aforementioned basic hydrogen strategy.
In addition, based on the importance of energy security, a mechanism will be established to strategically secure surplus LNG while maintaining interests in Sakhalin 1 and 2, etc. In addition, with an eye on energy security in Asia as a whole, it is also indicated that upstream development investments, etc. will be made in cooperation with Asian countries.
For more details, please refer to the "GX Basic Policy and Roadmap" page.
Date of Last Update: August 13th, 2024
On 2 July, Japan Climate Leaders’ Partnership (JCLP) released a position paper on Japan’s upcoming amendment on the Strategic Energy Plan and NDC. In the paper, JCLP advocated for more than 75% GHG emissions reductions by 2035 compared to 2013 levels. The organization specifically called for the electrification of industry and vehicle transportation, alongside government intervention to allocate funds raised by GX bonds to renewables, opposing investment in high efficiency fossil fuel facilities. In the same paper, JCLP also advocated for more than 60% renewable energy ratio by 2035 compared to 2013 levels, through calling for offshore wind power for 20GW by 2035 and 90GW by 2040. This paper was handed to the minister of of Economy, Trade and Industry, representative of Komeito the ruling party, and the cross-party parliamentary group.
In a statement in the Japan Business Federation (Keidanren)’s Monthly Foreword for May 2024, Mitsubishi Heavy Industries CEO Seiji Izumisawa promoted nuclear energy and thermal power with carbon capture and fuel conversion to hydrogen and ammonia in Japan’s energy mix, with ambiguity around the timeline for the phaseout of coal and the decarbonization of hydrogen and ammonia production.
On May 27th, the Federation of Electric Power Companies of Japan (FEPC) published a position paper regarding the revision of the Strategic Energy Plan in Japan. The FEPC advocated for measures to secure and maintain thermal power, and secure long-term contracts for LNG that will lock in unabated fossil gas. The federation also appeared to support co-firing of hydrogen, ammonia, and biomass as well as use of CCUS, but there was ambiguity around the timeline for the phaseout of coal and the decarbonization of ammonia production. While the FEPC also supported an increase in renewables and nuclear, there was some ambiguity regarding the pace and extent of this increase. In the same paper, the FEPC also appeared to support carbon pricing while emphasizing that the cost burden should be shared amongst the public.
On May 17th, during a Press Conference, Hayashi Chairman of Federation of Electric Power Companies of Japan (FEPC) supported the use of renewable and nuclear energy while emphasizing the continued role of thermal power (generally fossil fuel based) for the stable supply of energy. The Chairman also emphasized that price of carbon pricing should be borne by a public, appearing to avoid the excessive burden on the power generation companies.
On the May 2nd, during an interview conducted by Jiji.com, Hayashi Chairman of Federation of Electric Power Companies of Japan (FEPC) emphasized that coal “will play a major role until the end (in Japan)”, advocating that CO2 emission can be reduced by utilizing carbon capture and storage (CCS) and hydrogen and ammonia co-firing.
On April 16th, the Japan Business Federation (Keidanren) published a policy proposal advocating for the Japanese government to create an integrated industrial strategy toward 2040. Regarding the energy mix, it supported government investments in renewable energy as well as “the maximum possible use of nuclear energy,” while also supporting hydrogen and ammonia for power generation with ambiguity on their decarbonization.
On April 19th, during the Chairman's Press Conference, Hayashi Chairman of the Federation of Electric Power Companies of Japan (FEPC) supported a role for nuclear and emphasized the need for its mention in the next Strategic Energy Plan, but gave no clear position on the energy mix in general. He also supported a continued role for thermal power and liquified natural gas (LNG) in the power sector, emphasizing the perspective of transition and secure supply, but unaccompanied by timelines that are aligned with IPCC guidelines.
According to a Bloomberg article, the vice president of Federation of Electric Power Companies (FEPC) supported the use of nuclear power in Japan’s energy mix over costly fossil fuels at the annual meeting of the Japan Atomic Industrial Forum held on April 9th. It also emphasized the need to include a specific role for nuclear in the next national energy plan in Japan.
At a METI hearing held on February 2nd, the Petroleum Association of Japan appeared to state the need for oil, emphasizing its importance. The group also appeared to support carbon capture and storage (CCS) as a justification to increase the rate of oil use.
At the New Year's Thoughts of the Petroleum Association of Japan (PAJ) on January 5, Chairman Kito advocated for the need for oil in the energy mix, emphasizing concerns about energy security, independence and reliability.
At a regular Keidanren press conference on December 4, the Japan Business Federation (Keidanren) promoted the co-firing of ammonia with coal to Global South countries, with ambiguity around the timeline for phasing out coal and decarbonizing ammonia production.
In a policy paper published on its website on December 20th, the Japan Association of Corporate Executives (Keizai Doyukai) supported a long-term role for nuclear energy to facilitate a shift towards renewables to achieve carbon neutrality by 2050, and called for stakeholder dialogue toward the revision of the 7th Strategic Energy Plan.
The Japan Climate Leaders’ Partnership (JCLP) handed a proposal to the Vice Minister of Environment of Japan on November 20th. In the proposal, JCLP proposed the following factors to be included in Japan's Green Transformation (GX): raising building standards to that of Zero Energy Homes (ZEH)/Zero Energy Buildings (ZEB), the rapid expansion of renewables such as floating offshore wind power, and the accelerated introduction of electric vehicles in Japan. Representatives of Amazon Japan, Sumitomo Mitsui Trust Bank and AstraZeneca participated in the meeting.
In a proposal to the Minister of Energy, Trade and Industry of Japan, the Japan Climate Leaders’ Partnership (JCLP) called for the following factors to be included in the Green Transformation (GX) initiative: raising building standards to ZEB/ZEH, rapid expansion of renewables, such as floating offshore wind power, and accelerated introduction of Electric Vehicles in Japan.
At a GX (Green Transformation) Executive Council Meeting held on November 8th, Mitsubishi Corporation supported the decarbonization of hard-to-abate industry, and the introduction of hydrogen, ammonia and offshore wind power in Japan. However, there is some ambiguity regarding the intended use and decarbonization of these energies, and pace and extent of this increase, as well as the need for policy to support it.
According to an Asahi Shimbun article, Mr. Kito, Chairman of Petroleum Association of Japan (PAJ), called for a review of the double taxation of gasoline during a press conference on October 26th, stating that the current tax on gasoline is "excessive".
During the chairman’s monthly press conference held on October 20th, Chairman Ikebe of the Federation of Electric Power Companies of Japan emphasized the role of nuclear energy in achieving carbon neutrality in Japan, whilst also achieving the "3 E's": stable supply, economic efficiency, and environmental compatibility - the focus of Japan’s energy policy. Its position on the energy mix in general remains unclear, with its comment on energy mix should be “well-balanced”.
At the Subcommittee on Hydrogen and Ammonia Policy held on October 4th at the Ministry of Economy, Trade and Industry of Japan, the Petroleum Association of Japan (PAJ) supported carbon neutral fuels using hydrogen and ammonia with ambiguity on the need to decarbonize their production.
At the Council of Economic and Fiscal Policy held on September 26th and October 10th at the Japan Cabinet Office of Trade and Industry, the Japan Business Federation (Keidanren) supported the restart of nuclear power plants and advocated for government support for next-generation innovative reactors and fusion reactors. However, Keidanren did not take a clear position on the transition of the energy mix in general.
At the Electricity and Gas Basic Policy Subcommittee held on September 27 at the Ministry of Economy, Trade and Industry of Japan, the Japan Business Federation (Keidanren) supported a system of strategic surplus liquified natural gas (LNG) and incentives for operators to secure the fuel.
At the GX Executive Council meeting held on August 23rd at the Cabinet Secretariat of the Japanese Government, the Japan Business Federation (Keidanren) viewed nuclear power as a transitional energy source for fusion power generation and advocated further government support for it. In addition, at the same meeting, it requested accelerated consideration of an emissions trading system, but did not clarify the specific details of its position on this.
During the GX Executive Council meeting held by the Cabinet Secretariat of Japan on August 23rd, Mitsubishi Corporation communicated the need for government intervention to support a transition towards renewables. The company recommended the establishment of supply chains for renewable energy facilities and supported measures to reduce costs.
In its "Regulatory Reform Request for FY2023", posted on its website on September 12th, the Japan Business Federation (Keidanren) supported more ambitious renewable energy legislation while supporting thermal power generation as an adjustment force. The entity also published its "Proposal for Fiscal 2024 Tax Reform" on its website on the same day and appeared to oppose a carbon tax.
At a joint press conference held on August 28th, Keidanren Chairman Maksakazu Tokura supported nuclear power and fusion in Japan, stating that "given the location of Japan, renewable energy alone will not be sufficient."
According to a Nikkei article published on August 26th, Japan Business Federation (Keidanren) Chairman Maksakazu Tokura supported nuclear power generation and fusion in Japan, while remaining unclear on his position on the need to transition the overall energy mix. In the article, he also supported the Green Transformation (GX) policy, and expressed hope that the government would invest and provide predictability, without mentioning specifics or the need for regulations.
At a council meeting of Japan’s Ministry of Economy, Trade and Industry (METI) on August 8, the Japan Business Federation (Keidanren) appeared to promote the role of the private sector in securing LNG supply. Keidanren likewise appeared to support the use of thermal power generation for peaking beyond 2030.
During the METI Committee held in August 2023, vice chairman of FEPC stated the importance of securing the stable energy supply in Japan and it’s necessary to make further improvements to the implementation of strategic surplus LNG based on their past efforts.
At a council meeting of the Ministry of Economy, Trade and Industry (METI) on July 28th, the Japan Gas Association (JGA) supported e-methane policy with a mixed impact on the transition of the energy mix.
At a council meeting of the Japanese Ministry of Economy, Trade and Industry (METI) on July 31st, the Japan Business Federation (Keidanren) appeared unsupportive of the mandatory installation of residential solar power generation, emphasizing economic considerations. Meanwhile, it also supported regulations for renewable energy development, such as the deregulation of building code floor-area ratios and the installation of solar carports.
At a regular press conference of the Petroleum Association of Japan (PAJ) on July 20, Chairman Kito advocated for hydrogen and ammonia without mentioning the need to decarbonize their production.
At a press conference held by the chairman of the Japan Gas Association (JGA) on July 10th, Chairman Honjo expressed support for "carbon-recycling fuels," including e-methane. According to a Reuters article published the same day, he expressed hope that Prime Minister Kishida's visit to the Middle East would help Japan secure stable supplies of liquefied natural gas (LNG) and other fuels, saying, "We hope the prime minister will work hard on (diplomatic) exchanges between countries to ensure stable procurement of fuels."
At the Electricity and Gas Basic Policy Subcommittee held by the Ministry of Economy, Trade, and Industry (METI) on 29th March, Keidanren appeared to support the continued use of fossil fuels and thermal power.
On 28th March, Japan Climate Leaders’ Partnership released a recommendation paper, advocating for the implementation of carbon pricing; decarbonization of the power sector via the acceleration of renewable energy implementation; and early coal phaseout. The paper also supported renewable energy legislation, setting a goal of 100% zero-emissions vehicles in new passenger car sales by 2035, and setting ambitious goals for decarbonizing heavy-duty vehicles in Japan.
During the Resources and Fuels Subcommittee meeting hosted by the Japanese Ministry of Economy, Trade and Industry (METI) on 22nd February, the Japan Gas Association supports resource diplomacy of Japanese government to secure stable LNG and its upstream development.
During the Resources and Fuels subcommittee hosted by Japanese METI on 22nd of February, The Federation of Electric Power Companies of Japan demanded the extended role and stable supply of coal in Japan instead of LNG, amid the risk of energy security of LNG and stable supply of electricity.
During a Resources and Fuels Subcommittee meeting hosted by the Japanese Ministry of Economy, Trade and Industry (METI) on February 22, the Japan Gas Association advocated for continued government support to secure stable liquefied natural gas supply and upstream development.
During its regular press conference on January 20th, the chairman of the Federation of Electric Power Corporations of Japan (FEPC), Kazuhiro Ikebe, appeared to support the mid-to long-term use of nuclear, the use of renewable energy as the main source of power, and the realization of zero-emission thermal power generation, without being clear if the associations timelines are aligned with IPCC guideline.
On January 24th, the Japan Electric Manufacturers Association (JEMA) submitted a position paper to the Japanese Ministry of Economy, Trade and Industry (METI), demanding to revise the system to allow extension of operation of nuclear plants beyond 60 years, without specifying the relative role of nuclear in the full transition towards a zero-emission energy system.
In January 23rd, Central Japan Economic Federation (CJEF) has submitted a position paper to the Japanese Cabinet Secretariat’s public comment on the Green Transformation roadmap, generally supporting the renewable energy legislation including feed-in tariffs. It also supports emissions tradings but emphasizes that it should be flexible. CJEF expressed mixed support on carbon pricing, stating that a carbon price should not affect the competitiveness of the sector. CJEF also supported maintenance of a high greenhouse gas emissions energy mix in the power sector and transport, while supporting government support for decarbonizing the steel sector. Further, the association supported energy transitions in Asian countries, while emphasizing that each countries’ situation (such as fossil fuel dependency) should carefully be considered.
As reported by the Japan Metal Bulletin, at a round-table meeting with the steel industry hosted by the Minister of Economy Trade, and Industry on January 13th, the chairman of the Japan Iron and Steel Federation requested government support for decarbonization investments and green power and hydrogen infrastructure, but did not specify a position on decarbonizing hydrogen.
At the Nuclear Power Subcommittee held by the Ministry of Economy, Trade, and Industry (METI) on December 8th 2022, Keidanren supported nuclear power, although it did not specify a position on the energy mix in general.
As reported by Nikkei Asia on January 6, at a press briefing, Panasonic’s group chief technology officer advocated for the increased development of hydrogen power in Japan, but did not specify a position on decarbonizing hydrogen production.
In July 26th, Japan Climate Leaders Partnership has published an opinion paper calling for development of an environment that ensures diversity of renewable options. These include development of a market environment in which electricity consumers can enjoy a variety of options to procure renewable energy economically and promptly and development of an environment that facilitates the establishment of virtual Power Purchase Agreement (PPA) schemes through 1) deregulation in order for virtual PPA not to be subjected to the Commodity futures trading law and 2) allowing direct trading by consumers for a wide range of non-fossil certificates.
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