2050 Carbon Neutrality and offshore wind

2020 was a turning point for Japan. Former Prime Minister Suga declared Japan’s commitment to reach net-zero by 2050 in his inauguration address at the Diet on 28 October 2020. This announcement was unexpected but, in general, Japanese companies received it as a welcome surprise, and the announcement was followed by ambitious commitments made by some influential business executives. According to Nihon Keizai Shimbun (Nikkei), by the end of April 2021, 85 companies of the Nikkei 225 index (representing approximately 40% of the total market capitalisation of the Nikkei 225 companies) had committed to achieving net-zero in the future. Prime Minister Fumio Kishida also reiterated the government’s commitment for 2050 carbon neutrality.

Offshore wind is listed together with solar and geothermal power as the No.1 priority growth sector.

The Offshore Wind Vision aims to present the mid and long term goals and relevant initiatives by the government and private sector representatives in the offshore wind industry.

Offshore Wind Vision

The Offshore Wind Vision was published on 15 December 2020 by the Public-Private Council. The Offshore Wind Vision aims to present the midand long-term goals and relevant initiatives by the government and private sector in the offshore wind industry, and is inspired by the offshore wind sector deal in the United Kingdom published in March 2019.

The public and private sectors will work together to promote initiatives to strengthen the industrial competitiveness of offshore wind power based on the following strategies, which constitutes the government and the private sector’s basic policy for wind power introduction:

• first, the government commits to creating an attractive domestic offshore wind power domestic market;
• second, the government and the industry will develop a competitive and resilient domestic supply chain by promoting investment; and
• third, the government and private industry will engage in next-generation offshore wind technology development, and the creation of next-generation industry that can compete internationally. The Japanese government (via export credit agencies and other organisations) will seek to engage with other countries to facilitate such international industry expansion.

Progress of Project Site Development for Year 2021

On 13 September 2021, METI and MLIT announced the designation of the sea area off the coast of Happo Town and Noshiro City, Akita Prefecture as a Promotion Area (the “Happo Promotion Area”). Subsequently, the public consultation process for the draft public auction guidelines for the Happo Promotion Area (the “Draft Happo Public Auction Guidelines”) has been launched on 11 October 2021.

The other three areas designated as promising areas in 2020, (i) Northern side of Japan sea off the coast of Aomori Prefecture, (ii) Southern side of Japan sea off the coast of Aomori Prefecture and (iii) Enoshima, Saikai City, Nagasaki Prefecture remain as promising areas. It is worth noting that, even though only Happo Promotion Area was promoted in 2021, the total expected output capacity of five Promotion Areas falls in the vicinity of 2GW, roughly achieving the government’s introduction target of 1 GW per year (for 2020 and 2021).

On 13 September 2021, METI and MLIT announced the designation of the sea area off the coast of Happo Town and Noshiro City, Akita Prefecture as a Promotion Area.