Japan New Strategic Energy Plan

Japan’s Ministry of Economy, Trade and Industry (METI) is discussing a revision of its Strategic Energy Plan (SEP), a key document outlining the country’s energy policy, for the first time in three years (the most recent version was published in October 2021). As Japan’s most important energy policy document, the SEP will outline the country’s new targets for greenhouse gas emissions and energy mix to meet the nation’s medium to long-term goals. This seventh iteration of the SEP, which will be presented to the Cabinet for approval in early 2025, represents a significant shift in both outlook and strategy. The 2021 SEP forecasted that Japan’s electricity demand would gradually decline; Japan will reverse that outlook due to the projected significant increase in power demand resulting from the digital transformation. 

Specifically, we expect Japan’s 2025 SEP to shift from a strong focus on decarbonization to the nation’s dual goals of ensuring energy security (spurred by recent challenges to securing energy supplies triggered by Russia’s invasion of Ukraine) while supporting the rapidly growing energy demands accompanying the digital transformation and hyperscale data centers needed to meet increased computing and storage needs. 

Following the Diet’s 2023 decision to allow existing nuclear reactors to operate for more than 60 years (up from 40 years), CS Japan expects that, in addition to expanding renewable energy sources (e.g., wind and geothermal), new civil nuclear power reactor builds will be mentioned in the SEP for the first time since the 2011 Fukushima nuclear accident. We also expect the SEP will identify LNG as Japan’s most viable energy source. CS Japan therefore expects the 2025 SEP will be a significantly positive development for U.S. energy companies in both the civil nuclear and LNG sectors, offering such firms opportunities to expand their business in the coming years. 
 

CS Japan’s network includes, inter alios, procurement managers of the Japanese electric utilities and key private sector players. For more information, please contact the U.S. Commercial Service at Office.Tokyo@trade.gov.