Japanese government plots subsidies in a bid to drive clean energy uptake
A Japanese government official has revealed plans to cover the Capex (Capital Expenditure) costs of companies utilising renewable energy sources, in a bid to accelerate decarbonisation and meet renewable energy targets.
Juntaro Shimizu, director of the Green Transformation (GX) policy group at the Ministry of Economy, Trade and Industry, said yesterday (22nd December) that Japan plans to provide ¥210 billion ($1.3 billion) to Japanese companies that use electricity from renewable or nuclear sources.
The new programme will launch in 2026 and will run for 5 years, applying to commercial and industrial companies that utilise clean energy and contribute to regions where the power is generated. Subsidies will cover as much as half of capital expenditure, and data centre developers meeting the criteria will also be eligible.
As part of this new framework, the government will create a "GX Strategy Region" system to attract new industrial clusters in areas with decarbonised power sources. In tandem, local governments and companies will jointly draw up plans, before the national government selects appropriate regions to provide support through regulatory reform and subsidies.
The measures come as Japan seeks to accelerate decarbonisation and meet its renewable energy targets. The nation is the seventh largest emitter of carbon dioxide globally[i] based on 2023 data, and Japan is targeting an energy mix of 50% renewables, 20% nuclear by 2040. However, as of 2024 these figures sat at just 26% for renewables[ii] and 8.3% for nuclear[iii]. Presently the global average renewable and nuclear mix sits at 41%.
Japan takes the plunge with blue energy
The news follows other innovative attempts to harness clean energy in the country in 2025. Earlier this year Japan expanded its foray into renewables with the opening of its first osmotic power plant in Fukuoka, making it only the second such facility operational in the world.
‘Blue energy’, or ‘salinity gradient’ power plants as they are also known, work by using osmosis to drive a turbine. The new plant in Fukuoka separates concentrated salt water from fresh water using a semi-permeable membrane; this membrane does not allow impurities other than water to pass. As the fresh water moves through and into the salt water it increases pressure, this in turn is used to drive a turbine, generating power. The Fukuoka plant uses concentrated seawater for the saline aspect, and processed water from a sewage treatment facility for the fresh water. The energy generated will be used to power a desalinisation plant which in turn will supply freshwater to Fukuoka city and neighbouring areas.
This plant is only the second such power plant in the world, possessing the capability to generate about 880,000 kilowatt hours of electricity each year, enough to power around 220 Japanese homes. The Fukuoka District Waterworks Agency describes it as "a next-generation renewable energy source that is not affected by weather or time of day and emits no carbon dioxide."[iv]
References
[i] EDGAR - The Emissions Database for Global Atmospheric Research
[iii] https://www.isep.or.jp/en/1561/
[iv] Japan's 1st osmotic power plant begins operating in Fukuoka | News | Science Japan
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