Japan’s Prime Minister Calls For Carbon-Neutral Power; Nuclear Power A Key Element Of Industrial Strategy

The Yomiuri Shimbun

16:59 JST, December 27, 2024

Prime Minister Shigeru Ishiba emphasized Japan’s need to develop its own carbon-neutral energy sources in a lecture organized by the Yomiuri International Economic Society on Thursday. He noted that electricity demand is set to increase due to the spread of AI and the progress of digital transformation.

Ishiba stressed the need to develop carbon-neutral energy sources through the expansion of renewable energy and the utilization of nuclear power. He also outlined his intention to use carbon-neutral energy and digital transformation to make Japan’s industrial structure more sophisticated and thus, internationally competitive.

A cornerstone of future industrial policy will be the strategy announced on Thursday at a meeting of the GX (Green Transformation) Implementation Council, chaired by the prime minister. A distinctive feature of the strategy “GX 2040 Vision” strategy is that it positions decarbonization as an industrial policy rather than an environmental policy.

“This is a great opportunity to promote investment in decarbonization technologies and break the stagnation of Japan’s economy that has lasted for 30 years,” Ishiba said at the meeting.

To encourage industries to gather near carbon-neutral energy sources such as nuclear power plants and offshore wind power installations, the government plans to introduce measures to reduce electricity bills and tax burdens for companies that move into such areas, with semiconductor factories and data centers in mind.

Companies moving into these areas will be able to stably procure electricity whose production does not emit carbon dioxide. For local governments, such moves will have a large ripple effect on employment and small and midsize companies.

A related policy goal is the restart of nuclear power plants. Currently, nuclear plants’ host municipalities benefit from tax revenues, but surrounding municipalities that see little direct benefit tend to be hesitant to agree to restarting them. Encouraging businesses to set up shop there and revitalize the entire region is expected to create an environment in which it is easier to obtain local consent.

Whether Japan can secure carbon-neutral energy sources will determine its international competitiveness,

“We aim to create new industrial clusters by building a carbon-neutral energy supply chain and developing a next-generation electricity transmission and distribution network,” Ishiba said at the meeting.