Key facts
- Japan will introduce a new energy strategy in August.
- The plan aims to improve energy resilience, meet rising electricity demand, and accelerate decarbonization.
- Lessons from disruptions through the Strait of Hormuz will inform the strategy.
- The strategy may increase emphasis on oil security and diversification.
- Current targets include 40-50% renewable energy and 20% nuclear power by 2040-41.
The Japanese government is set to unveil an enhanced energy strategy in August, drawing lessons from recent disruptions to fuel shipments through the Strait of Hormuz, exacerbated by US-Iran tensions. This initiative aims to bolster the nation's energy resilience, address growing electricity demand, and accelerate decarbonization efforts.
Prime Minister Sanae Takaichi has directed the trade and industry minister, Ryosei Akazawa, to propose policies by the end of August. These recommendations are intended to improve Japan's energy supply-demand structure by diversifying energy sources and investing in crisis management capabilities. Takaichi noted that easing crude oil prices present a favorable opportunity to enhance Japan's energy security in collaboration with Asian partners and G7 nations.
While specific details of the policy package are still emerging, it is anticipated that greater emphasis will be placed on oil security and diversification. This focus aligns with Takaichi's promotion of the "Power Asia" framework, designed to ensure stable oil supplies across Asia, and the established "green transformation (GX)" strategy, which prioritizes energy security, economic growth, and decarbonization.
The new plan will build upon the current Strategic Energy Plan (SEP), which already emphasizes gas security and the expansion of non-fossil domestic energy sources like nuclear and renewables. The government intends to implement measures that can be enacted without waiting for the next comprehensive review of the SEP, scheduled for the fiscal year 2027-28. The current SEP was last revised in February 2025.
Under the existing SEP, Japan aims for renewable energy to constitute 40-50% of its power generation by 2040-41, a significant increase from the current 22.9% in 2023-24. The share of nuclear power is targeted to rise to approximately 20% from 8.5%, while thermal power is projected to decrease to around 30-40% from 68.6% during the same period. To maintain the 20% nuclear power share, Japan will need to replace approximately 2.2-5.5GW of nuclear capacity by the 2040s and a total of 12.7-16GW by the 2050s.