Green Transformation

Japan has a goal of achieving net-zero greenhouse-gas (GHG) emissions by 2050, and in its revised Nationally Determined Contribution (NDC) aims for a reduction in GHG emissions of 46% by fiscal year 2030 compared to fiscal year 2013 levels. The 7th strategic energy plan from 2025 showcases Japan’s path to these targets with expectations to increase the share of renewables in the power mix to around 40-50% by 2040, with nuclear power accounting for about 20% of the mix.

Japan remains highly import-dependent for energy (importing approximately 85-90% of its total primary energy supply) and the cost pressures and energy security concerns in recent years have reinforced the push to develop domestic renewables, offshore wind and next-generation technologies.

In the offshore wind sector, Japan has enacted legislative reforms to expand eligible sea areas. In March 2024, the government approved a revision to allow offshore wind facilities in its Exclusive Economic Zone (EEZ), not just the near-shore waters, consistent with its target of roughly 10 GW by 2030 and up to 45 GW by 2040. Japan regards Denmark as a front-runner in green transformation, creating a strong foundation for Danish firms within consultancy and project-development support in the renewables and offshore wind space. The Embassy of Denmark in Tokyo engages closely with Japanese authorities and local partners to facilitate market access.

Japan also places considerable emphasis on hydrogen and ammonia within its energy transformation agenda. The Hydrogen Society Promotion Act, which entered into force in October 2024, introduced support mechanisms (including a contract-for-difference scheme for low-carbon hydrogen) and regulatory frameworks for hydrogen/ammonia supply chains. Hydrogen, ammonia, e-methane and e-fuels are central to Japan’s strategy to decarbonise hard-to-abate sectors and to integrate with its green transition investment agenda.

On energy-efficiency, Japan focuses on buildings, homes, commercial facilities and industrial processes. Residential and commercial consumption remains a major share of total energy use (industrial consumption has been declining and is relatively efficient). Japan’s per-capita energy consumption remains above the EU average. Accordingly, the Government is preparing stricter legislation on building-efficiency, energy-saving equipment and home-appliances. In parallel, attention to waste-sorting, resource recycling and circular-economy measures is increasing as part of the broader green transition agenda.

Japan has moved from setting broad ambitions to accelerating implementation - with clearer regulatory frameworks (e.g., the GX Promotion Strategy), stronger investment signals (e.g., GX transition bonds, carbon-pricing reforms), expanded offshore wind and hydrogen/ammonia policy tools - all of which together raise the opportunity for Danish companies. However, there remain challenges: project costs, delays (especially offshore wind), grid constraints, and the need to build domestic supply chains.

 

Head of Trade

Tine Hasling Rasmussen

Green Transformation

Anton Bo Kjølby