Japan sets sights on ambitious renewable energy targets by 2040 

Japan’s existing energy plan, issued in 2021, aims for a 46% reduction in emissions by fiscal 2030 from fiscal 2013 levels. To achieve this, the plan envisages renewable energy accounting for 36% to 38% of national power generation and nuclear power contributing 20% to 22% to the energy mix by fiscal 2030.

Businesses in Japan have been advocating for clear long-term energy goals to provide direction for the renewables sector. The Japan Business Federation (Keidanren) is expected to urge the government to outline plans through 2050 under the upcoming update of the Strategic Energy Plan.

Despite the government’s commitment to achieving net-zero emissions by 2050 and efforts to incentivize investment in renewable and nuclear power, companies remain cautious about making significant investments. The unpredictability of future energy technologies poses a challenge for energy-related investments.

While renewables are gaining traction, fossil fuels still dominate Japan’s energy mix, comprising around 70% of the total. Challenges in restarting nuclear power plants and regulatory constraints further complicate investment decisions in the renewables sector.

Investing in the electricity sector requires substantial capital, and without concrete milestones from the government toward achieving net-zero emissions by 2050, companies struggle to forecast their future earnings and plan new investments.

Japan’s dependence on imported fossil fuels underscores the importance of bolstering the renewable energy industry and supply chains for energy security. The government is also eyeing advancements in new renewable technologies, such as thin, bendable perovskite solar cells and floating offshore wind platforms, to overcome geographical limitations and expand solar and wind output nationally. Concrete goals tied to these technologies are expected to be announced later this year.