Japan will provide $1.3 billion of investment subsidies to clean-energy users

A government official announced late on Monday that Japan will provide 210 billion Japanese yen (1,34 billion dollars) to companies using clean energy to fund their investments. The goal is to increase demand for renewable energies and stimulate?growth throughout the region.

The subsidies will help to reduce the country's reliance on fossil fuels and reach its clean energy goals.

Juntaro Shimizu, Director of the Green Transformation Policy Group (GX) at the Ministry of Economy, Trade and Industry, stated that the scheme would provide funds for a period of?five fiscal years, starting in fiscal year 2026.

He said that companies who rely on only decarbonised electricity, and contribute to the regions where it is generated, will be eligible for subsides covering up half their capital expenditure. Operators of data centres who meet the same criteria are also eligible.

Next fiscal year, the government intends to begin soliciting applications for eligible businesses.

By fiscal 2040, Japan wants nuclear power to provide 20% of its energy mix, while renewables will supply up to 50%. This is up from 22,9% renewables in fiscal 2023 and 8,5% nuclear.

The goal of achieving renewable energy has been slowed down due to the cost increases for offshore wind projects. Large-scale solar farms are also unable to proceed because of local opposition.

The new measures are part of Japan's GX 2040 vision, a national strategy that integrates decarbonisation with industrial policy and was approved by Cabinet in early this year. It aims to promote energy transition?and economic growth.

In order to create industrial clusters, the government will establish the "GX Strategy Regions" system as part of this framework.

Local governments and companies will develop plans together, while the national government selects regions and provides support through subsidy and regulatory reforms. Shimizu stated that applications from local governments will open in the second half of this fiscal year. (1 dollar = 156.7200 Japanese yen)

(source: Reuters)