Toward Realizing Carbon Neutrality by 2050 (“Society 5.0 with Carbon Neutral”)
１. Introduction

─ Determination and Actions of the Business Community ─Overview

15 December 2020Keidanren

 Prime Minister Suga’s declaration to realize “Carbon Neutrality by 2050” (hereafter, “2050CN”) is an admirable decision and is highly
appreciated.

 2050CN requires the realization of a new socioeconomic system (“Society 5.0 with Carbon Neutral”) through the fundamental
transformation of the system as a whole, including drastic changes in a way of energy utilization that has been practiced since theIndustrial Revolution, innovations in production processes of key industries, full-scale dissemination of innovative products in thetransport and consumer sectors, as well as lifestyle changes.
 The business community, in full collaboration with the government, will take this challenge with unwavering resolution.

２．Challenges and the Role of the Business Community There are various challenges. The business community will take aproactive role in:
1. Stable supply of affordable and decarbonized energy;

Transport

Industry

3. Supply of innovative products and buildings in the transport andconsumer sectors.

３．Perspectives in Promoting 2050CN

 Realization of “a virtuous cycle of the economy and environment”
is indispensable.

2. Stimulating demand: promoting investments toward large-scale
infrastructure including next-generation electricity / hydrogen
supply systems, as well as production facilities, transport
equipment and housing enabling decarbonization

Innovation in theenergy system

1. Strengthening industrial competitiveness: generating innovations
and extending them into domestic and international markets, andcreating business environments which ensure the stable supply ofaffordable zero-emissions energy

Innovation in productionprocesses, products, etc.

2. Establishment of decarbonized production processes in theindustrial sector;

Global expansion（Utilization of standard
certificates, emission credit
transactions, etc.)

Society 5.0 with Carbon Neutral•

Establishment of zerocarbon steel
technologies such ashydrogen reduction
steelmaking, etc.

•

Establishment ofcarbon recycling incement production•

Establishment ofplastic production
using CO2 as basematerial•

Establishment of paper
production using
biomass fueletc.

HydrogenElectricity•

Development anddissemination ofelectrified vehicles,including EV andFCV, etc.

•Development anddissemination ofzero-emission
vessels usinghydrogen, etc.

•Consumer•

Dissemination of
net-zero energy
houses (ZEHs)•

Dissemination of
net-zero energy
buildings (ZEBs)•

Dissemination ofarea-wide energy
utilization
etc.

Technologicaldevelopment to mass
produce e-fuels etc.

•

RD&D for increasing demand of hydrogen as energy•

Creation of supply chains to deliver affordable hydrogen abundantly•

Commercialization of methanation•

Decarbonization of electricity sources (renewable energy + battery storage,
nuclear power, decarbonized thermal power, etc.)•Construction of next-generation electricity systems•

Promotion of electrification on the demand side in the industry, transport,and consumer sectors
etc.

etc.

Specific Actions
５．Creating Next-generation Electricity Systems withInvestment Cycles

４． Generating Innovation
 Expand and deepen the corporate challenges for innovation
through initiatives such as Keidanren’s ”Challenge Zero” withstrengthen international outreach Comprehensive support through tax incentives to back businessinitiatives, infrastructure development, regulatory andinstitutional reform, market creation, etc.

 Clarify the future vision of the electricity networks, provide
institutional and financial support for efficient facility
construction and utilization
 Reduce risks associated with large-scale investment in newelectricity sources to accelerate decarbonization, ensuring astable power supply Nuclear power is indispensable for 2050CN. Immediately
discuss the nuclear policy regarding replacement/new plants
and R&D for new reactors, as well as restarting existing plants.
 Increase the supply of renewable energy at a pricecomparable to prices in Europe and North America

６．Promoting Sustainable Finance

７．Expanding Innovation Internationally Clarify multiple future scenarios,technologies and policy options

andspecify

available Nationalize projects particularly in important technology areas,
thereby providing long-term and large-scale support

 Security issuers to implement active disclosure and dialogue.
Financial institutions to invest and finance based on the actual
state of industries
 Mobilize funds for technologies and activities needed forinnovation and transition toward a decarbonized society, inaddition to funds for net-zero-emission technologies (greentechnologies)
 Materialize the wide range of funds mobilization (noted above),through cooperating with foreign governments and businessorganizations in Europe, North America, Asia, etc.

 Early conclusion of negotiations on the rules of the Paris
Agreement looking ahead to the greater utilization of theJoint Crediting Mechanism (JCM) and the WTO negotiations
on the Environmental Goods Agreement. Improve thebusiness environment in Asia which is important production
bases/markets for Japanese companies
 Through the international frameworks such as the “Blue DotNetwork”, create a system that recognizes the high quality ofJapanese environmental technologies

８．Conclusion

 We strongly hope that, based on this proposal, the government will compile effective policies that show its resolve on these issues.

 Keidanren is going to intensively engage in government discussions. Moreover, Keidanren will release a series of proposals regarding
measures to realize 2050CN and promote “Challenge Zero” and other proactive initiatives taken by the business community.