Japan

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 in 2030 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.

Further information on how the CAT rates countries (against modelled domestic pathways and fair share) can be found here.

We project that Japan’s implemented policies will lead to emission levels of 28% to 33% below 2013 levels in 2030, falling short of its latest NDC target of a 42% reduction below 2013 levels, both excluding LULUCF. Without additional measures, Japan will likely miss its NDC target, let alone the 60% reduction below 2013 levels which we estimate as 1.5°C-compatible.

There have been few new developments since our last major update in September 2021 that would significantly reduce emissions in Japan by 2030. Japan must further accelerate its low-carbon transition particularly as a member of the G7 group, which recently committed in June 2022 to achieve “fully or predominantly” decarbonised electricity by 2035 and to end fossil fuel subsidies by 2025 (G7, 2022).

One new policy that may contribute to significant additional reductions, though its effects would only take place in the long-term, is the revision of building standards by which all new houses and buildings will need to comply with upgraded energy efficiency standards from 2025 (MLIT, 2022). This is a significant step forward as the emissions from the buildings sector increased by 34% in 2020 above 1990 levels while Japan currently aims to achieve 28% emissions reduction in 2030 below 1990 levels. (GIO, 2022; Government of Japan, 2021b).

To also support decarbonising existing houses and buildings, several measures have been introduced including financial support for house renovations to improve energy efficiency as well as promoting the use of renewable energy in buildings (MLIT, 2022). Japan aims to achieve on stock average net-zero energy consumption for newly constructed buildings (ZEBs) and houses (ZEHs) by 2030 as well as all buildings and houses by 2050 (MLIT, 2022). Additionally, the Tokyo Metropolitan Government plans to mandate majority of new buildings and houses to install solar panels in 2025 (The Japan Times, 2022b).

In order to discuss further pathways and measures to achieve the 2030 target as well as the 2050 carbon neutral target, the Japanese government established GX (Green Transformation) Implementation Council in July 2022. Specifically, the council aims to mobilise JPY 20tn (USD 146bn) for decarbonisation, and promote further actions from the industry sector through GX League, a voluntary group of industries who individually set their own decarbonisation targets to be in line with the national reduction targets and participate in an emission trading scheme to achieve them (i.e. 46% emissions reduction in 2030 below 2013 levels and achieving carbon neutrality by 2050) (CAS, 2022; METI, 2022a). As of September 2022, 440 companies which collectively account for 40% of CO₂ emissions (including indirect emissions from electricity use in households) have joined the group (METI, 2022a).

An additional measure may include further investment in nuclear power as Prime Minister Kishida is now looking not only to re-start the currently idled rectors but also to build new generation reactors (Prime Minister’s Office of Japan, 2022; Reidy, 2022). The role of nuclear power in the Japanese energy mix in 2030, however, remains highly uncertain. The table below illustrates the fuel mix in the power sector in 2020, and the different assumptions for our projections, in comparison to the IEA World Energy Outlook (WEO) 2021(IEA, 2021b) (See Assumptions tab for details).

Even under the low-emissions case where we assume the maximum use of existing nuclear reactors and a continued growth of renewables, we project that Japan will likely miss its targeted electricity mix to supply 56-60% from low-carbon sources in 2030 under current policies. This 56-60% low-carbon electricity target in 2030 is also far from the G7’s commitment of a fully or predominantly decarbonised electricity target by 2035, which Japan recently signed up to as a G7 member in June 2022 (G7, 2022).

Sectoral pledges

In Glasgow, four sectoral initiatives were launched to accelerate climate action on methane, the coal exit, 100% EVs and forests. At most, these initiatives may close the 2030 emissions gap by around 9 % - or 2.2 GtCO₂e, though assessing what is new and what is already covered by existing NDC targets is challenging.

For methane, signatories agreed to cut emissions in all sectors by 30% globally over the next decade. The coal exit initiative seeks to transition away from unabated coal power by the 2030s or 2040s and to cease building new coal plants. Signatories of the COP26 declaration on 100% zero emission vehicles agreed that 100% of new car and van sales in 2040 should be electric vehicles, 2035 for leading markets, and on forests, leaders agreed “to halt and reverse forest loss and land degradation by 2030”.

NDCs should be updated to include these sectoral initiatives, if they’re not already covered by existing NDC targets. As with all targets, implementation of the necessary policies and measures is critical to ensuring that these sectoral objectives are actually achieved.

• Coal exit: Japan has not adopted the coal exit and plans to use coal to supply 19% of electricity in 2030 according to its latest NDC updated in October 2021. This stands in stark contrast to the recent G7 commitment in 2022 to achieve “fully or predominantly” decarbonised electricity by 2035 (G7, 2022).
• Zero emission vehicles: Japan has not adopted the zero emission vehicles target and instead pushed to remove the target from the G7 commitment in 2022 (Yamazaki & Abnett, 2022). Japan currently aims for 100 % new sale of “electrified vehicles” which includes non-plug-in hybrids (HVs) and plug-in hybrid vehicles (PHV) by, latest, 2035.

With its latest Basic Energy Plan, Japan currently aims to supply electricity from 36–38% renewable electricity, 20–22% nuclear, 20% gas and 19% coal in 2030 (METI, 2021b). While the indicated share of decarbonised electricity is roughly in line with our 1.5°C benchmark (though at the lowest end), keeping 19% of coal-fired power generation is completely inconsistent with the virtually full coal phase-out needed by 2030 (Climate Action Tracker, 2021; IEA, 2021a). Additional measures are certainly necessary also to achieve fully or predominantly decarbonising electricity by 2035, a goal Japan committed as a member of G7 in June 2022 (G7, 2022).

Nuclear power’s role in Japanese future energy mix remains uncertain. As of 7 September 2022, 25 reactors in 15 nuclear power plants have applied for a restart (plus two in construction applied for operation); 17 reactors with a total of 17GW have passed the safety examination and have been approved for restart (under the condition that the plans for the construction work are approved by neighbouring local governments and the required safety measures are properly installed), of which 10 are currently in operation (JAIF, 2022). Prime Minister Kishida recently signalled to make a political push not only to re-start the currently idled rectors but also to build new generation reactors (Prime Minister’s Office of Japan, 2022; Reidy, 2022).

It is likely, however, that nuclear power plant operations continue to be disrupted by unplanned inspections as well as legal action to stop them; there have already been a few district court rulings to halt the operation of the restarted reactors (National network of legal teams for nuclear phase-out, 2020). We estimate, based on these developments, that the nuclear power share will range between 9% and 20% in 2030 (see Table 1, and also Assumptions tab). Our upper end estimate reaches the government target.

For coal-fired power, the Japanese government is finally starting to officially shift, albeit gradually, away from developing coal power, both domestically and overseas. The 19% coal-fired power generation share in 2030 is, even though far from being 1.5°C-consistent, a considerable step forward.

While the government plans to increase coal-fired power plant efficiency standards from 41% to 43% (METI, 2021e), it is important to note that such efficiency standards should not distract from the need to phase out coal-fired power as early as possible. It is therefore worrisome that two new coal power plants in central Japan (Kobe and Taketoyo, 1.7GW in total), started operation in 2022 and there are six more new plants planned to be operational in the coming years (JBC, 2022b).

The Japanese government also officially included thermal power with CCS as well as ammonia and hydrogen — most of which are currently produced from fossil fuels — as non-fossil energy sources to promote their use as decarbonised fuel (METI, 2021a). This is widely seen as a strategy to prolong the life of fossil-based electricity, especially coal (JBC, 2022a; Obayashi, 2022). A recent report shows that, however, ammonia-coal co-firing power would not be an economically viable option compared to renewable electricity (further description below, under Hydrogen and ammonia) (BloombergNEF, 2022; Kiko Network, 2021).

Japan has also been a major funder of coal-fired power plants overseas, alongside China and South Korea (EndCoal, 2020). Japan has been the G20’s largest supporter of international fossil fuel projects through export credit agencies (DeAngelis & Tucker, 2020). However, at the 2021 G7 summit Japan agreed to end new public financing for unabated coal projects overseas by the end of 2021 (G7, 2021), and further commit to end such financing also for other fossil projects overseas by the end of 2022 at the following summit in 2022 (G7, 2022; The Japan Times, 2022a).

While the private sector also shows signs of change, the actual divestment speed remains very slow (Trencher et al., 2020). For example, despite the announcement of gradual divestments, Japan’s largest banks — Mizuho, MUFG and SMBC Group — still remain the top three lenders for global coal projects, financing a total of USD 61bn between January 2019 and November 2021 (Urgewald, 2022).

Renewable electricity generation has grown steadily in recent years. The share of renewable energy in total electricity generation in Japan has increased from 10% in 2010 to 23% in 2020. While there are other supplementary measures (such as subsidies for installing renewables in buildings described below, under Buildings), the 2012 Renewable Energy Act remains the main policy to achieve Japan’s renewable electricity share target of 36-38% by 2030 under its latest NDC. It institutes a feed-in tariff (FIT), which was partially shifted to a Feed in Premium (FIP) for large-scale projects in April 2022, and general funding for distribution networks.

The FIT/FIP has provided very favourable rates, particularly for solar PV, which led to a large increase in PV installations; by April 2022, 64GW of solar PV was installed and operational as a result of the FIT scheme (another 13GW was installed but not yet operational) producing 8% of electricity, against the targeted deployment of 104–118 GW (14–16% of electricity) by 2030 (METI, 2022c).

However, no significant growth has yet been observed for other renewables such as wind which only produced 0.9% of electricity in 2020 (METI, 2022c). As a measure to accelerate its development, a new law entered into force to facilitate the use of maritime areas for offshore wind power generation (METI, 2019a).

Using this scheme, the first auction for three large-scale offshore wind projects (1.7 GW in total) was won by Mitsubishi Corporation-led business consortia at 11.99 yen ($0.1)/kWh as the tariff price. This was far below the ceiling price set by the government at 29 yen/kWh (METI, 2022c), which sent a strong signal that offshore wind can be competitive in Japan.

The government has an aspirational target to develop 10GW of offshore wind by 2030 and 30-45GW by 2040. While we do not consider this target in our emissions projections as it is not included in Japan’s NDC, it would lead to an additional renewable electricity generation of 26 TWh/year or 2.5% of total electricity generation in 2030, assuming a 30% capacity factor.

Hydrogen and ammonia: Japan shows a strong commitment to develop hydrogen as a major decarbonised fuel, for which a national strategy was established in 2017 and further updated in 2019 (METI, 2017, 2019b). However, a progress evaluation group under METI recently indicated that the lack of clarity on the environmental value of hydrogen is hindering investment on hydrogen-related technologies and expressed concern that the fuel cell vehicle (FCV) market is expanding too slowly (METI, 2020).

Two of the world’s largest low-carbon hydrogen production facilities are located in Japan in Fukushima (10 MW) and Yamanashi (16MW) (METI, 2022b). Australia’s national hydrogen strategy also identifies Japan as a potential major importer of Australian hydrogen (COAG Energy Council, 2019). An Australian-Japanese coal-to-hydrogen pilot project transported liquefied hydrogen for the first time in the world on February 2022 and aims for commercialisation by 2029 (METI, 2022b). It is important to note that without the successful development and deployment of CCS, which is not yet available at scale and expected to remain costly in the future, such so-called “brown” hydrogen, produced by burning coal, would not contribute to reducing emissions (Gunia, 2022).

The Green Growth Strategy also highlights the potential role of ammonia in reducing GHG emissions (METI, 2021c). The document indicates, for example, the possibility of using a 20% ammonia blend with coal to reduce emissions in thermal power plants. JERA, Japan’s largest power generation company, has already set up a plan to create a pilot programme with the intention of using this blended fuel by 2035 (JERA, 2020).

The government also included ammonia in addition to hydrogen and CCS technologies as non-fossil energy sources to promote their use as decarbonised fuel. It is widely seen as a strategy to prolong the life of fossil-based electricity, especially coal (JBC, 2022a; Obayashi, 2022). A recent report shows, however, that ammonia-coal co-firing power would not be an economically viable option compared to renewable electricity (BloombergNEF, 2022; Kiko Network, 2021).

It is important to note that hydrogen and ammonia technologies are less developed, potentially more costly, and their emissions reduction potential is questionable (Gunia, 2022; Stocks et al., 2022), compared to commercially available low-carbon technologies that could be deployed at scale before 2030 and help Japan get on the right trajectory to achieve its 2050 net zero goal.

CO₂ emissions from the industry sector (including indirect emissions from electricity use as well as emissions from industrial processes) accounted for 34% of Japan’s total energy-related CO₂ emissions in 2020 (GIO, 2022).

Within the industry sector, the iron and steel, chemical and cement industries are the three largest emitters, respectively emitting 37%, 15% and 8% of industrial emissions in 2020; emissions in the sector have reduced by 23% below 2013 levels (GIO, 2022). A 2020 progress report shows that the industry CO₂ emissions from the member companies of Keidanren, the most influential business association in Japan, including indirect emissions from electricity use in FY2019 was 10.7% lower than in 2013, with the majority of the emissions reduction (7%) attributable to the changes in industrial activity levels (Keidanren, 2021).

The main GHG emissions reduction effort in the industry is Keidanren’s Commitment to a Low-Carbon Society (Keidanren, 2013), a voluntary action plan which has monitoring obligations under the Plan for Global Warming Countermeasures (MOEJ, 2016b). Keidanren has since launched its Challenge Zero Initiative, in collaboration with the Japanese government, inviting companies to submit strategies to decarbonise their activities; a number of actors have already disclosed measures to be implemented, including in the steel and chemical industries (Keidanren, 2020).

Among the industrial sectors that pledged to 2050 net zero goal is the iron and steel sector. The Japanese Iron and Steel Federation (JISF) announced in 2021 that it would aim to reach net zero CO₂ emissions by 2050 (JISF, 2021). The stance of JISF on climate change seemed to have changed considerably since 2018, when it published a long-term decarbonisation vision that drew global emissions pathways reaching zero in 2100 to achieve the 2°C temperature goal (JISF, 2018).

CO₂ emissions from the transport sector accounted for 18% of Japan’s total energy-related CO₂ emissions in 2020 (GIO, 2022).

Regarding vehicle decarbonisation, the government announced a target of reaching 100% of “electrified vehicles” – a category that includes non-plug-in hybrids (HVs) and plug-in hybrid vehicles (PHV) – in the sale of passenger vehicles by, latest, 2035 (NHK, 2021), replacing the previous target of reaching 50-70% of ‘new generation’ vehicles (including hybrids, plug-in hybrids, battery electric vehicles, fuel cell electric vehicles, as well as ‘clean diesel’ vehicles and gas-powered vehicles) in the share of sales by 2030 (METI, 2018b).

This policy, which still allows for non-plug-in HVs to be sold in 2035, could be further strengthened to become consistent with the 1.5°C-compatible benchmark to phase out all fossil-fuel passenger (ICE) cars from new sales by 2035 (Kuramochi et al., 2018). Japan’s commitment to transition away from ICE vehicles could further impact the global car manufacturing sector. Given the importance of the industry at both the national and international level, it could define a globally ambitious and innovative strategy favouring the development and deployment of zero-emission vehicles. Additional pressure from investors has also started to impact car manufacturers’ strategies; Toyota has for example, recently announced that it will make efforts to assure stakeholders that the company’s activities were in line with the Paris Agreement (Sheldrick, 2021).

CO₂ emissions (including indirect emissions from electricity use) from the commercial and residential building sectors together accounted for 33% of Japan’s total energy-related CO₂ emissions in 2020 (GIO, 2022).

Compared to 1990, the emissions in these two sectors have increased by 39% and 29%, respectively (GIO, 2022). Although these significant increases are partially attributable to the increased electricity CO₂-intensity post-Fukushima, there’s an urgent need for strengthened action on the demand side in the buildings sector.

An important recent development is the revised Building Energy Conservation Act, which entered into force in June 2022 mandating all new houses and buildings from 2025 to comply with upgraded energy efficiency standards. This is a significant step forward from the current regulation which is only applicable to buildings larger than 300 m2.

To also support decarbonising existing houses and buildings, several measures have been introduced, including financial support for household renovations to improve energy efficiency, as well as promoting the use of renewable energy in buildings.

Japan aims to achieve on stock average net-zero energy consumption for newly constructed buildings (ZEBs) and houses (ZEHs) by 2030 as well as all buildings and houses by 2050 (MLIT, 2022). This is a highly challenging target as in 2020, only 0.42% of newly built buildings was ZEBs, and 24% of newly built houses was ZEHs (METI; MOEJ, 2022; METI, 2022d). Additionally, the Tokyo Metropolitan Government plans to mandate majority of new buildings and houses to install solar panels in 2025 (The Japan Times, 2022b).

F-gas emissions increased by more than 60% between 2013 and 2020 (GIO, 2022). Japan aims to reduce these emissions by 44% below 2013 levels by 2030, through enhanced management of in-use stock and regulating consumption levels (METI & MOEJ, 2021).

On the management of in-use stock, Japan aims to increase the recovery rate of hydrofluorocarbons (HFCs) from end-of-use refrigeration and air conditioning equipment up to 50% by 2020 and 70% by 2030. The Act on Rational Use and Proper Management of Fluorocarbons (“F-gas Act”), last amended in 2013, addresses this, but the recovery rate has stagnated: in 2019 the recovery rate of refrigerants was only 38% (METI & MOEJ, 2021). While the F-gas Act was further amended by introducing several penalty and obligatory measures to increase the F-gas recovery rate, it was only increased to 41% in 2020, missing the 50% recovery target (METI; MOEJ, 2021).

To meet the HFC reduction target under the NDC and the targets under the Kigali Amendment of the Montreal Protocol, the Ozone Layer Protection Act was amended in 2018 and measures took effect in April 2019.

The amendment sets a ceiling on the production and consumption of HFCs, establishes guidelines to allocate production quota per producer as well as regulates exports and imports (METI, 2018a). The consumption levels are projected to be below the Kigali cap at least until 2029, when the Kigali cap lowers significantly. Since there is some time lag between consumption and emissions, we assume that the amended Ozone Layer Protection Act will not affect HFC emission levels up to 2030 (METI, 2018a).