Climate change, energy, and Japan’s GX & fusion startups, part 3: decarbonization

In parts 1 and 2, we explored Japan's modern energy history.

Today, the world is moving toward decarbonization. How has Japan responded to the global call for “Carbon Neutrality by 2050?” This article reviews Japan's actions, highlights emerging Green Transformation (GX) companies.

Climate Change as a Global Concern

The term climate change gained global recognition in 1985, when scientists raised alarms at the Villach Conference co-hosted by UNEP, WMO, and ICSU. In 1988, scientists and policymakers meeting in Toronto adopted a declaration that included specific CO2 reduction targets.

In response, Japan promoted new, low-carbon energy sources and strengthened energy efficiency. By 2003, a new law required power companies to introduce a set percentage of renewables relative to their electricity supply, focusing on wind, solar, geothermal, small hydro, and biomass.

Among these, solar power advanced most rapidly due to research, regulation, and incentives. Hydrogen energy also gained traction, especially in the field of fuel-cell vehicles.

Carbon Neutrality by 2050

The UN Framework Convention on Climate Change (UNFCCC) was adopted in 1992, with the annual COP starting in 1995. The 1997 Kyoto Protocol marked the first legally binding greenhouse gas reduction commitments for advanced economies. The 2015 Paris Agreement expanded action to all countries, setting the goal of limiting global warming to below 2°C-1.5°C if possible—with carbon neutrality by 2050.

In October 2020, Japan restated its aim to achieve carbon neutrality by 2050, alongside a target to cut greenhouse gas emissions by 46% by 2030 compared to 2013 levels.

Japan's Energy Today

Japan’s current energy strategy is framed by the principle of “S+3E:" Safety, Energy Security, Economic Efficiency, and Environment. The 2011 Earthquake in Japan exposed vulnerabilities in energy supply, leading to reduced nuclear reliance and increased fossil fuel use, especially Liquid Natural Gas (LNG). Japan remains the world’s largest LNG importer.

This dependence weighs heavily on Japan’s trade balance, as high-value exports such as automobiles and semiconductor equipment are offset by fuel imports. Fluctuations in energy prices and trade tensions, such as US tariffs, directly impact Japan’s economy.

The government promotes GX as a transformation that balances energy security, growth, and decarbonization. Innovation and industry partnerships are key, spanning next-generation renewables, carbon capture, and alternative fuels. Here are some notable initiatives:

• Perovskite Solar Cells: Sekisui Chemical is advancing lightweight, flexible solar panels that can be installed on building walls. Japan’s domestic iodine supply strengthens this technology’s prospects.
• Offshore Wind Power: Japan is testing floating wind turbines suitable for deep waters. Projects include Toda Corporation’s 2MW "Haenkaze" in Nagasaki (2013) and Obayashi Corporation’s TLP platform trials off Aomori (2024).
• Hydrogen: Toshiba is piloting hydrogen production from renewable electricity. Iwatani Corporation is expanding hydrogen fueling stations nationwide, supporting fuel-cell cars and buses. Japan also participates in building global hydrogen supply chains.
• Ammonia Combustion: Viewed as a carbon-free fuel, ammonia has established global supply chains. Japanese firms like IHI and JERA are leading combustion technology development.
• Synthetic Methane (e-methane): Companies like INPEX and Yanmar are developing CO2-derived methane for decarbonized city gas systems.

Other areas of active R&D include e-fuels, SAF biofuels, CCUS (carbon capture, utilization, and storage), storage systems, and fuel cells.

GX startups are emerging to support carbon-neutral business, including emissions measurement, disclosure, and reduction solutions.

In the next article in this series, we will focus on nuclear power, and the future of fusion energy.

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