Prime Minister Yoshihide Suga is set to bind Japan to a target for carbon neutrality by 2050, a shift in stance that will bring the country in line with the European Union and more than 60 other nations in efforts to combat climate change.
The new target will be announced by Suga when he makes his first address to parliament on Monday, after taking office last month, the Nikkei reported earlier this week.
Japan previously said it would aim to reduce emissions by 80% by 2050 and achieve net-zero emissions sometime in the latter half of the century.
The move, if confirmed, would make the world’s third-largest economy the second Asian country after South Korea to aim for the 2050 target that is considered the minimum needed to keep global average temperatures from rising by more than 1.5 Celsius.
Japan is the world’s fifth-biggest emitter of carbon dioxide, the heat trapping gas that scientists say is already causing major heatwaves, bigger and more powerful cyclones and periods of drought around the world.
Under pressure from many business sectors, moves are also afoot to increase the use of renewable energy as the government starts forcing the shutdown of older, dirtier coal plants.
But investors say the apparent change in position is at odds with the country’s plans to roll out new coal stations.
“Any net zero commitment from a coal-intensive economy, such as Japan, has to be coupled with an urgent and credible coal phase out plan to be taken seriously,” Jan Erik Saugestad, CEO of Norway’s Storebrand Asset Management told Reuters.
Storebrand has assets under management of around $90 billion with investments in Japanese companies and has been critical of Japan’s stance on coal.
“Japan’s solar and wind power potential is huge and Prime Minister Suga has the opportunity to accelerate this and embrace a modern and coal-free energy system,” he added.
Pressure has also been building from below with the number of cities, towns and villages aiming for carbon neutrality by 2050 increasing to 163 from 4 in a little over a year, according to the environment ministry.
Still, there are plenty of vested interests to stymie the efforts including from the old power utilities, car and steel makers, along with industrial companies that use coal boilers to produce steam needed for manufacturing purposes, all of whom have plenty of lobbying power.
Companies running smaller, older coal plants are already lobbying the government heavily for exemptions to the plans shut to them down, an official at one of Japan’s trading houses that supplies them with fuel told Reuters this week.
But Japan’s most powerful business federation, known as Keidanren, is now advocating the 2050 target with its chairman Hiroaki Nakanishi pushing the line at the prime minister’s economic advisory council, according to minutes from the Oct. 6 meeting.
A report released in August showed how Keidanren is dominated by energy-intensive sectors representing less than 10% of the economy, resulting in national policies that favour coal and hindering efforts on climate change.