The tension between these priorities is shaping every major policy decision and raising questions about whether Japan can decarbonize fast enough while trying to revive growth and stabilize its energy system.

Japan is once again confronting a familiar strategic dilemma. The government has raised its climate ambitions, pledged deeper emissions cuts, and promoted a vision of “system transformation.” Yet at the same time, it is doubling down on re-industrialization, energy security, and digital competitiveness. The tension between these priorities is shaping every major policy decision and raising questions about whether Japan can decarbonize fast enough while trying to revive growth and stabilize its energy system.

Economic Security Now Drives the Agenda

Across recent cabinet statements and policy documents, economic security has emerged as the organizing principle of Japan’s development strategy. So, the government is directing large-scale public investment into semiconductors, artificial intelligence, batteries, and resilient infrastructure, sectors deemed essential to national competitiveness in a volatile global economy.

Energy policy is tightly bound to this agenda. After the Fukushima disaster, Japan leaned heavily on fossil fuels to maintain grid stability. Only in the past few years has it begun restarting nuclear reactors, expanding renewable energy, and promoting hydrogen and ammonia as “transition” fuels. I saw this emphasized at the 7th RD20 Conference, held in Tsukuba City and hosted by Japan’s National Institute of Advanced Industrial Science and Technology (AIST) (from September 30 to October 3, 2025). The latest Strategic Energy Plan and the new 2035–2040 climate targets are framed as a predictable ‘linear pathway’ toward net-zero by 2050, signaling stability for investors and industry.

Japan’s updated nationally determined contribution (NDC) commits to cutting greenhouse gas emissions 60% below 2013 levels by 2035 and 73% by 2040. Officials argue that these targets strike a realistic balance between ambition and economic constraints. Nonetheless, this demonstrates a gap between climate targets and what science presents.

A Gap Between Targets and Climate Science

However, a linear trajectory based on current policies still falls short of what climate science recommends. The IPCC indicates that global emissions must fall roughly 60% below 2019 levels by 2035 to keep 1.5°C within reach. When translated to Japan’s 2013 baseline, multiple analyses suggest the country would need to cut emissions by at least 66% by 2035, not 60%.

Pointedly, Japanese NGOs have been quick to highlight this gap. For example, WWF Japan argues the new target is not aligned with a 1.5°C pathway, and some business coalitions have even endorsed a 75% reduction by 2035. Their concern is not only numerical: it reflects deeper structural tensions within Japan’s industrial and energy systems. Heavy industries, steel, chemicals, and power generation, remain cautious about a rapid fossil-fuel phase-out. Policymakers, meanwhile, are wary of measures that could raise electricity prices or undermine energy security at a time when Japan is trying to restore manufacturing and expand digital infrastructure.

Ammonia Co-Firing: Innovation or Diversion?

The government’s ammonia co-firing strategy has become a focal point of this debate. Public funds are supporting utilities in importing and co-firing low-carbon ammonia in existing coal plants. Officials present the approach as a pragmatic way to cut emissions without dismantling infrastructure.

Critics argue the opposite, that it risks locking in coal assets, relies on uncertain global ammonia supply chains, and diverts resources from faster-falling alternatives such as wind, solar, and battery storage. The strategy underscores how energy security continues to shape climate policy, often forcing mitigation efforts to fit within existing industrial structures rather than transform them.

Emissions Are Falling but Not Fast Enough

The bottom line is that Japan’s emissions are declining, but not fast enough. Recent data show a 4% drop in FY2023/24, bringing emissions to their lowest level since records began in 1990. Renewables and restarted nuclear reactors are doing more of the heavy lifting, while coal and gas remain deeply embedded in the system.

Yet even with these improvements, current policies are projected to fall short of Japan’s NDC and even further short of a 1.5°C-aligned pathway. The incremental pace of change reflects the broader tension between climate ambition and economic strategy.

This tug-of-war helps explain why climate policy can appear to shift in prominence within Japan’s agenda. When economic revitalization, industrial strategy, and energy security are framed as urgent national challenges, climate mitigation is often recast as gradual, affordable, and compatible with legacy infrastructure.

Nonetheless, counter-currents are gaining strength. Major financial institutions and corporations are integrating climate risk into their strategies and calling for clearer long-term signals. Civil society groups and local governments are experimenting with more ambitious decarbonization plans. This can be seen in the city plans of Yokohama City (Minato Mirai 21 district transformation into a carbon-neutral model by 2030), Saitama City (“Green Co-creation Model,” where the city is deploying solar power across all public facilities), Kawasaki City (decarbonizing its industrial sector), and Nagano Prefecture (declared a climate emergency and will reduce energy consumption by 70% to achieve carbon-neutrality) to name a few. These actors increasingly view climate action as a driver of innovation, resilience, and new export opportunities, not a constraint.

Where Climate and Development Can Align

Japan does not need to choose between economic development and effective climate policy. Several opportunities sit squarely at the intersection of the two, for example:

• Further grid modernization over transitional fuels: Redirecting public support from ammonia co-firing toward transmission upgrades, storage, and interconnection would create domestic jobs and remove a significant bottleneck to renewable expansion. This is especially true since hydrogen and ammonia-based energy sources are expensive and immature.
• Industrial decarbonization as competitiveness: Supporting green steel, low-carbon chemicals, and electrified industrial heat, paired with clear coal phase-out timelines, would position Japanese firms to lead emerging low-carbon markets.
• Regional transition compacts: Bundling renewable projects, efficiency upgrades, and new mobility or tourism initiatives can further enhance diversity while cutting emissions.

The Political Test Ahead

Japan has the technological capacity, financial resources, and human capital to align its development strategy with a 1.5°C world. But for Japan, the real test or challenge is political: shifting from a mindset in which climate policy must avoid harming growth to one in which it is understood as the foundation of a resilient, competitive economy. In my opinion, if Japan can close the gap between its climate targets and what science demands, while using that shift to modernize its energy system and retool some industries, it could further strengthen its own future. Furthermore, it could send a stronger signal across Asia regarding its climate policy expectations.

This Post was submitted by Climate Scorecard Japan Country Manager, Delmaria Richards.

Engagement Resources:

Sustainable Brands Japan. (2024, November 28). 日本政府が新たな排出削減目標「13年度比で35年度に60%減」を提示――問われる“1.5度目標との整合”. https://www.sustainablebrands.jp/news/1300078/

WWF Japan. (2025, February 19). Japan’s new 2035 climate target is not consistent with the 1.5°C goal of the Paris Agreement. https://www.wwf.or.jp/eng/activities/5896.html

Reuters. (2025, April 24). Japan’s greenhouse gas emissions fall 4% in FY23/24 to record low. https://www.reuters.com/sustainability/climate-energy/japans-greenhouse-gas-emissions-fall-4-fy2324-record-low-2025-04-24/