In February 2023, the Japanese government adopted the Green Transformation (GX) Basic Policy, an initiative that lays out Japan's new decarbonisation strategy, and is aimed at generating approximately JPY150tn (approx. USD 1tn) of public and private investment over the next 10 years. However, Japan’s new strategy places more emphasis on economic growth and energy security, rather than prioritising ambitious decarbonisation efforts.
The GX Basic Policy does not provide concrete emissions reduction targets. It promotes the development of so-called ”clean coal” technologies in the power sector, a move inconsistent with pathways required to limit global temperature rise to below 1.5°C. Prime Minister Kishida’s administration has missed an opportunity to place renewable energy at the core of Japan’s decarbonisation efforts and needs to commit to a coal and fossil gas phase-out if it hopes to meet its NDC target. The CAT continues to rate Japan’s overall climate targets and action as “Insufficient”.
The GX Basic Policy suggests the government is still reluctant to take the measures necessary to decarbonise its economy and achieve net zero emissions by 2050. The new strategy provides no details on the expected emission reductions for 2030 and 2050. There are also concerns that the carbon pricing scheme envisioned by the government will not be effective in reducing Japan’s emissions. It remains unclear whether the emissions trading scheme planned for 2026 will still be based on voluntary participation, and the carbon levy, which will only be implemented in 2028, is expected to be set a low level - or around JPY1,500/t-CO2 so around €10.
Through the GX Basic Policy, Japan continues to promote so called “clean coal” technologies, putting a strong emphasis on the need to develop Carbon Capture and Storage (CCS) technologies, and ammonia and hydrogen co-firing in the power sector. While these technologies have a role to play in the transition to net zero, they should be only be used in hard-to-abate sectors, certainly not in the power sector, and particularly not to curb emissions in coal-fired power plants.
The Japanese government also plans to promote these technologies in power sectors overseas through the Asia Zero Emissions Community (AZEC) initiative, a move that risks undermining decarbonisation efforts in ASEAN countries, at a moment where an increasing number of governments are setting their own net zero emission targets.
On top of that, Japan has reportedly been using its position as host of the 2023 G7 Summit to push for continued investment in upstream fossil gas and LNG. Japan also reportedly refused to endorse the 2030 deadline for phasing out coal and is the only G7 country planning to build new coal-fired power plant. This stands in stark contrast with its commitment to achieving “fully or predominantly” decarbonised electricity by 2035.
In policy documents, the Japanese government consistently uses terms such as “clean coal”, “green transformation”, “electrified vehicles” and unsubstantiated “clean hydrogen”. However, these terms are often misleading and strengthen a harmful narrative, often serving as a smokescreen to hide the government’s intention to keep relying on fossil fuels. Such language is a form of greenwashing and does not provide a comprehensive and truthful picture of Japan’s current decarbonisation efforts.
In a significant policy shift, Prime Minister Kishida announced that Japan will move to re-start its currently idled nuclear reactors and build new generation reactors, as part of the GX Basic Policy. Despite this reversal, many regulatory and political hurdles remain, and it is unlikely that nuclear power will help Japan meet its 2030 objectives.
Without additional measures, Japan’s current policies and actions will lead to emission levels of 31% to 37% below 2013 levels in 2030, excluding LULUCF. This falls short of Japan’s NDC target, let alone 60% below 2013 levels in 2030 which we estimate as 1.5 C-compatible. To improve its climate action, Japan could:
- Commit to a full coal phase-out by 2030.
- Stop public financing of fossil fuel projects overseas.
- Give priority to the scale-up of renewable energy capacity and strengthen related targets in the upcoming Basic Energy Plan.
- Speed-up the roll-out of an effective carbon pricing scheme based on mandatory participation.
- Strengthen its EV target to phase out all fossil-fuel passenger (ICE) cars from new sales by 2035.
Despite the rollbacks in policies, there have been a few positive developments in Japan worth highlighting:
- The introduction of new emission reduction targets in several key sectors of the economy, including the steel and iron industry.
- The revision of the offshore wind auction’s scoring system to prioritise feasible projects with an earlier operational start.
- The revision of the building standards by which all new houses and buildings will need to comply, with upgraded energy efficiency standards from 2025 (although its effects will only be felt in the long term).
- The adoption of the “Renewable Energy Installation Standards”, a regulation requiring construction companies to install rooftop solar panels on new buildings in Tokyo, from 2025.
The CAT rates Japan’s climate targets, policies and finance as “Insufficient”. The “Insufficient” rating indicates that Japan’s climate policies and commitments need substantial improvements to be consistent with the Paris Agreement’s 1.5°C temperature limit.
We rate Japan’s 2030 emissions reduction target as “Almost sufficient” as it is almost 1.5°C compatible when compared to modelled domestic emissions pathways. We rate Japan’s overall fair-share contribution (i.e. the NDC target and Japan’s climate finance abroad) as “Insufficient”. Japan’s contribution to mitigation abroad through climate finance alone is highly insufficient. Japan should both increase its emissions reduction targets and provide additional, predictable, finance to others and stop financing fossils abroad to meet its fair-share contribution. To achieve its target, Japan would need to enhance its current policies and actions.
The CAT rates Japan’s policies and action against modelled domestic pathways as “Insufficient”. The “Insufficient” rating indicates that Japan’s climate policies and action need substantial improvements to be consistent with the 1.5 °C temperature limit. If all countries were to follow Japan’s approach, warming would reach over 2°C and up to 3°C.
We project that Japan’s implemented policies will lead to emission levels of 31% to 37% below 2013 levels in 2030, excluding LULUCF, falling short of its latest NDC target to achieve 46% (42% excluding LULUCF credits) below 2013 levels. Without additional measures, Japan will likely miss its NDC target, let alone more than 60% reduction below 2013 levels which we estimate as 1.5 °C-compatible.
The GX Basic Policy has failed to raise Japan’s climate ambitions. The new strategy provides no details on the expected emissions reduction for 2030 and 2050. There are also concerns that the carbon pricing scheme envisioned by the government will not be effective in reducing Japan’s emissions.
Japan is also the only G7 country planning to build new coal-fired power plant. The government’s focus on developing co-firing coal plants with ammonia and hydrogen, and introducing the as-yet-unviable carbon capture and storage, are all distractions from the need for it to phase out coal-fired power by 2030 at the latest. It also remains to be seen whether the Japanese government will stop financing international fossil fuel projects, despite committing to end public financing for coal projects by the end of 2021 and for other fossil fuel projects by the end of 2022.
The full policies and action analysis can be found here.
The CAT rates the currently planned 2030 reduction target of 46% (42% excluding LULUCF) below 2013 levels as “Almost sufficient” when compared to modelled domestic emissions pathways. The “Almost sufficient” rating indicates that Japan’s NDC target against modelled domestic pathways is not yet consistent with the 1.5 °C temperature limit but could be, with moderate improvements. If all countries were to follow Japan’s approach, warming could be held at—but not well below—2°C.
The CAT’s assessment of Japan’s total fair share contribution considers its emissions reduction target and its climate finance.
The CAT rates Japan’s 2030 NDC target as “Insufficient” when compared with its fair-share emissions allocation. The “Insufficient” rating indicates that Japan’s NDC target in 2030 needs substantial improvement to be consistent with the 1.5°C temperature limit.
Some of these improvements should be made to the domestic emissions target itself, others could come in the form of additional financial support for emissions reduction in developing countries. Japan’s target is not consistent with the 1.5°C temperature limit unless other countries make much deeper reductions and comparably greater effort. If all countries were to follow Japan’s approach, warming would reach up to 3°C.
The CAT rates Japan’s international public climate finance contributions as “Highly insufficient”. Japan remains committed to climate finance in the period post-2020 but contributions to date have been very low compared to its fair share. To improve its rating Japan needs to stop funding fossil fuel overseas and accelerate commitments to increase climate finance.
Japan’s climate finance is not sufficient to improve the NDC target against fair share rating, and the CAT rates Japan’s overall fair share contribution as “Insufficient”.
The CAT evaluates Japan’s net zero target as “poor” because Japan does not provide sufficient details on key elements that ensure effectiveness and transparency of net zero targets.
See Net-Zero Target for more details.