JAPANPOLICIES TOGROW CREDIBLE
TRANSITIONFINANCE

Prepared by Climate Bonds Initiative.
Japan: Policies to grow credible transition finance Climate Bonds Initiative1

GX: a solid foundation that now needs sharpening and tightening
to fully meet 1.5°C objectives
Japan has committed to delivering on the
Paris climate agreement and as part of theG20, ‘resolve(s) to pursue efforts to limit thetemperature increase to 1.5°C.’1
Japan’s government has demonstrated politicalleadership, particularly on transition, throughthe publication of the Climate Transition
Finance Guidelines, accompanying industry
technology roadmaps, and a pioneering Green
Transformation (GX) Plan.
Transition finance is intended to support the
rapid decarbonisation of hard-to-abate sectors
required to shift the whole economy onto a 1.5°C
decarbonisation pathway.2 This requires strong
and consistent policy guidance, innovative andbold investment approaches and ambitious
leadership from stakeholders across the public
and private sectors.
The Climate Bonds Initiative welcomes the GX Plan
as a solid foundation on which to build the transition
needed to deliver on national commitments to
cut Greenhouse Gas (GHG) emissions.
The GX Plan will drive forward investment inrenewables, grid flexibility, energy efficiency
and circular economy, supported by anupcoming sovereign bond to stimulate private
sector investment.
However, some components of the GX Plan needfurther examination; where GHG emission-heavy
fuel sources and technologies are inconsistent
with global models of how to achieve 1.5°C
outcomes. These components risk undermining
the credibility of the transition label, attracting
accusations of greenwashing.3 Key elements
require strengthening to ensure alignment
with science-based 1.5°C scenarios so thatgovernment targets can be met.

Recommendations
Ensure a 1.5°C-aligned
energy transition andaligned private sector action
Deep emissions cuts are requiredby 2030 to avoid the worst impacts of climatechange; to ensure confidence and credibility, the
GX Plan should be aligned with global models of
how to achieve a 1.5°C pathway. Aligned private
sector action will be key to its delivery.
To further strengthen investor confidence andaccelerate the transition in Japan and beyond,
Climate Bonds recommends the following:

1. Prioritise mature technologies
To deliver decarbonisation,
the priority will be to rapidly
grow mature and proventechnologies: energy efficiency,
grid flexibility, demand
management and renewable energy. Grid
limitations and curtailment regulations for
dispatch need to be swiftly addressed toaccelerate deployment of solar PV and wind.

2. Set a phase-out year for unabated coal
All developed countries mustcompletely decarbonise
their power sector by 2035
to achieve net zero. Clear
timelines for unabated coalphase-out with full GHG decarbonisation
trajectories will provide market clarity.
Ammonia co-firing investments must
manage NOx emissions, be restricted tousing low-carbon hydrogen, and meet thecoal phase-out timeline.

About the Climate
Bonds Initiative
The Climate Bonds Initiative (Climate Bonds)
is an international organisation working tomobilise global capital for climate action.
It promotes investment in projects andassets needed for a rapid transition to a
low-carbon and climate-resilient economy.
Climate Bonds promotes investor demandfor climate-related financial instruments;
advises governments and regulators;
conducts market analysis and policy
research; and administers a global Standard
and Certification scheme for entities andgreen instruments.

Japan: Policies to grow credible transition finance Climate Bonds Initiative

3. Put in place clear boundaries forany investment in gas
The role of gas in the energy
transition needs to be strictly
limited to those consistent withclimate objectives and must
address methane leakage.
The phase-out of unabated fossil fuels,
including gas, must be accelerated. A fulllife-cycle approach to the measurement (notestimation) of emissions will be needed.

4. Strengthen requirements forhydrogen and ammonia to ensure
they are low-carbon
Upfront operationalisation ofclear guidance and criteria to2
ensure hydrogen production
3
is sustainable from an energy,
emissions, water, and supply
chain perspective will be essential todeveloping a credible hydrogen market.

HNH

5. Ensure a strong and appropriate
carbon priceA strong carbon price willneed to be supported by amandatory ETS with a clear
deadline for the eliminationof free allowances to drive
faster decarbonisation.

6. Enhance and expand transition planrequirements to the private sector
Delivering on government
commitments will bedependent on private sector
action. Requirements andguidance for comprehensive,
science-based transition plans for corporates
and financial institutions, will provide clarity
for the market. METI’s industry roadmaps
accompanying the Climate Transition Finance
Guidelines should be strengthened to strictlyalign with science-based 1.5°C pathways.

7. Build investor confidence witha bold and strictly 1.5°C aligned
sovereign GX bondA strictly 1.5°C aligned
sovereign transition bondis critical to build investor
confidence and to mobilise
private capital for transition.

2

Introduction
The Japanese government has set ambitious
targets for decarbonisation and transformation of
the country. To support this, sustainable financeis needed to facilitate investments across all
sectors of the economy.
The required transformation is dependent on thework of industry and corporate entities. To meetthe need for rapid transition, companies will needto develop their own science-based, coherent,
and transparent plans to guide the process.
This report presents an overview of Japan’s
climate change and transition policy landscape,with particular attention given to the recently
cabinet-approved GX Plan.4 The report thenhighlights priority areas that should be
strengthened while focusing on guidance to theprivate sector and on transition finance.

Japan’s climate policy
In October 2020, Japan’s
former Prime Minister,
Yoshihide Suga, announced
a national commitment
to achieving net zero by
2050, and in April 2021, a
46% emissions reduction
by 2030 from 2013 levels.5,6 Whilst the commitment
was a considerable improvement from the previous
target of 26% reductions, it still falls short of theestimated 60% reductions needed to meet the Paris
Agreement.7 As climate change begins to impact,pressure to increase targets will most certainly grow.
In 2021, to support this more ambitious Nationally
Determined Contribution (NDC), Japan publishedseveral key documents to provide the foundation
for its transition. These policies, importantly,
framed transition as an economic opportunityand provided guidance on stakeholder action.
The Green Growth Strategy Through Achieving
Carbon Neutrality in 2050 outlined thegovernment’s commitment to rapidly reachingnet-zero.8 This document was aimed at industry,highlighting the hard-to-abate sectors that are
essential to continue economic growth but
require substantial efforts to decarbonise.
A cross-ministry effort including the Ministry of
Economy, Trade, and Industry (METI) launched
the Basic Guidelines on Climate Transition
Finance to boost investment in the low-carbon
economy.9 The guidelines suggest investors
should not only reflect on project-level emissions
but also at entity level decarbonisation strategies.
The Long-Term Strategy under the Paris Agreement
was developed and submitted to the UNFCCC
in October 2021.10 Through this document, theJapanese government reinforced its message
that economic growth and GHG emissions
reductions would happen in parallel and that thetransition would be science-based and fair.

The Green Transformation(GX) Plan
In February 2023, theJapanese cabinet
approved the Green
Transformation (GX) Planand related legislation.11

Green Transformation (GX) refers to thetransformation of the entire economic andsocial system from an economy, society,and industrial structure dependent on
fossil fuels to “structures driven by clean
energy” – the aim of the initiative is todrive economic growth and development
through emissions mitigation.12

The GX Plan aims to provide a 10-year road map
for the economy-wide changes needed to cut
emissions by 46% by 2030 and outline Japan’s
pioneering efforts in transition finance.
The GX Plan identifies and supports a range ofinvestment opportunities, including renewableenergy, improvements in energy efficiency,
and circular economy measures. The policy
framework also sets out the basis for an ETS
from 2026 as well as a carbon levy for fossil fuelimports linked to the carbon tax. There are four
core initiatives included in the GX Plan:13
1. Integrated regulatory/assistance promotion
measures to leverage government funding andsecure private investment.
2. New financing methods including transition
financing and public-private investment.
3. An international development strategy,
including a regional Asia Zero Emissions
Community.
4. Growth-oriented carbon pricing (including GXtransition bonds) to achieve USD1tn of publicprivate GX investment by 2033.
These initiatives cover energy, transport, industry,
and finance providing targets for ambition andguidelines for action and investment. The clear
policy messaging and financial support from theJapanese government, including the commitment
to issue USD144bn of sovereign GX bonds toincentivise private sector investment, is extremely
welcome and demonstrates global leadership.
The GX Plan aims to support corporate entities to
identify and invest in the transformational changes
needed to deliver on net zero. These changes need
to be codified in credible transition plans that
disclose the targets, the timelines, and the processof transition. The plans should also be linked to anytransition finance raised to enable these investments.
The GX Plan is an excellent example of a
supportive policy framework for transition,
providing guidance and financial policy support

Japan: Policies to grow credible transition finance Climate Bonds Initiative

to encourage the required investments.
However, certain fundamental elements need
to be strengthened.
The energy transition components of the GX Plan
are based on the 6th Strategic Energy Plan. The
expected role of hydrogen and ammonia (produced
from hydrogen) co-firing in coal-fired power plants
have particularly received attention among both
domestic and international stakeholders.

Hydrogen and Ammonia
In 2017, Japan launched
the Basic Hydrogen
Strategy, becoming thefirst country to develop
a strategy anchored on
deploying hydrogen andammonia as alternative
fuels, supported bysubsidies of JPY40–70bn(USD305–534m).14
In June 2023, the strategy
was updated with plansto generate JPY15tn(USD107bn) of public and private investment inhydrogen over the next 15 years.15
Low-carbon hydrogen and ammonia
development is essential for climate action;
but there are largely two issues that need to beaddressed to ensure that they are both produced
in low-carbon manners and that they contributeto climate goals:– Thresholds for what qualifies
as low-carbon:
The updated Basic Hydrogen Strategy
introduced emissions intensity thresholds forwhat would qualify as low-carbon hydrogenon a well-to-gate basis of 3.4kg-CO2/kg-H2.
However, this threshold is higher than emerging
international requirements for low-carbonhydrogen, for example, the 1.5kg-CO2/kg-H2(well-to-gate plus transportation emissions) by
2030 threshold applied by Climate Bonds.16
Using fossil fuels to generate electricity to
produce hydrogen and ammonia will increase
emissions compared to using fossil fuels
directly.17 Hydrogen generation and ammonia
production are very energy intensive, withenergy losses at each stage of production anddistribution. Burning ammonia can produce
nitrogen dioxide (NOx), which is a GHG 310
times more potent than CO2, and will need tobe appropriately managed.18
While the generation of hydrogen can be,
if using renewable energies, low-carbon,hydrogen is still a potent indirect GHG, withup to eight times the warming potential of
CO2.19 Leakage measurement and control,
throughout transportation and distribution,
are essential to any hydrogen usage.

3

Japan’s hydrogen initiatives to date have notbeen strictly for low-carbon hydrogen. Japan’s
pilot hydrogen shipments from Australia
in 2022 shipped coal-generated hydrogen,while recent commitments through the Green
Innovation Fund support blue hydrogen
supply chain development.20,21
A tougher eligibility threshold is critical tosupport the deep decarbonisation Japan needs.

– Timing:
The Basic Hydrogen Strategy’s thresholds will only
be put into operation after 2030, yet the largest
emission reductions Japan needs to achieve
are by 2030. As a result, there remains great
uncertainty as to whether low-carbon hydrogenand ammonia can be widely deployed in thetimeframe needed to achieve climate goals.
For example, current projections aim for thecommercial operation of 50%+ ammonia
combustion by the early 2030s and ammonia
single-fuel firing (and thus the full replacementof coal-fired power) by 2050.22
While recognising such plans are bold, theambition is insufficient for 1.5°C alignment,
as the IEA clearly states that all developed
countries, including Japan, need to completely
decarbonise its power sector by 2035.23
The focus on inefficient fossil fuel-based
production also raises concerns around stranded
investments and high upfront emissions — exactly
when Japan needs to quickly reduce emissions.24
GX funding for research and development needs
to have a fast transition as a necessary objective
along with certainty around emissions reduction.
The goal of the GX is to make Japan a leader in
low-carbon technology; until the above issues
are successfully addressed through researchand development, there must be caution in an
approach that creates dependence on ammonia
and hydrogen as energy carriers.
As deep emissions cuts are needed to meet
Japan’s 2030 commitments, options that candeliver quick reductions need the highest priority,
in particular, faster growth of renewables.

Carbon Levy and Emission
Trading Schemes (ETS)
Globally, ETS havenot achieved theintended impact due
to over allocation offree allowances andlow carbon prices.30
Early, mandatory carbon pricing with the
IMF recommended minimum of USD75
per ton and a clear deadline to eliminate
free allowances will be essential to drive
decarbonisation at the required speed.31

Opportunities

Gas

The greatest opportunity
for impact from the GX
Plan comes from thepolitical and financial
support for energy
efficiency, renewableenergy, and grid
improvements which offer mature, low-cost, andtechnologically viable options.

In past decades
fossil gas has beenthought of as a“transition” fuel forenergy generation
because directemissions fromcombustion were thought to be lower thanfor coal-fired power generation.

According to a report published by Berkley Lab
in 2023, Japan can generate 70% of its power
needs by 2035 with a combination of renewables,
battery storage, interregional transmission
systems, and energy efficiency.25

However, there is growing evidence that theleakage of potent GHG methane along the
supply chain creates gas power generation
emissions on par with coal.27,28

Estimates by the Ministry of the Environment
indicate Japan’s renewable capacity is doublethat of generated electric energy.26
These studies have also indicated the cost of
renewables is comparable to the existing fuel mix.
A constant deployment of at least 10GW ofrenewable energy per year from 2020 to 2035
would reduce average wholesale electricity costs
by 6% in 2035. If the social cost of carbon were
included, the reduction might reach 36% incomparison to 2020 levels.
Most importantly, the decarbonisation of thepower sector, which is the most economicallyfeasible and straightforward, will facilitate
decarbonisation of other sectors, from heating/cooling to transportation.

Transition FinanceJapan estimates that
JPY150tn (USD1tn) willneed to be mobilised toachieve the transition
outlined in the GX Plan.
To support and signal
private capital, Japanintends to issue a GX
Economic Transition Bond (GX Bond), on thescale of JPY20tn (USD144bn).32
Japan’s GX Bond is expected to be the firstsovereign transition bond, most likely in a Use ofProceeds (UoP) format. Ensuring global investor
confidence in its alignment to net zero will be
critical for its success, and if robust and credible,
it will demonstrate an approach that can be
adopted globally.
The UoP of the GX Bond will indicate theJapanese government’s definition of transition
finance. As mentioned above, METI launchedsectoral technology roadmaps specificallyfor carbon-intensive activities following the
publication of the Climate Transition Finance
Guidelines. The sectors covered by theseroadmaps are iron and steel, chemicals,
power, gas, oil, pulp and paper, and cement.33

Japan: Policies to grow credible transition finance Climate Bonds Initiative

Because of this, investments in liquified naturalgas (LNG), unless specifically addressing
emissions from existing assets, cannot
qualify as transition investments without
undermining the credibility of the label.
Methane emissions and leakage fromthe energy sector are 70% higher thanofficial figures.28,29
Short-term investments to implement fullvalue chain leak detection and reduction
technology, alongside full lifecycle
assessments of carbon intensity, are criticalwhile existing gas-related assets are slowly
being phased out.
If leakage issues can be addressed, CCS
could potentially offer a way to reduce
emissions in the short and medium term,
but in the long term, gas needs to bephased out as an energy source.

As intended, the sectoral roadmaps havebeen referenced in the majority of transitionlabeled issuances from Japanese entities.34
However, certain elements, including the lackof quantitative emissions reduction trajectories,
have raised doubts regarding the robustness of
the roadmaps.35
It is unavoidable that elements of a transition
plan remain uncertain, especially if it entails
innovation and technological breakthroughs.
However, the extremely urgent need for rapidand deep cuts in emissions demands early andstrong investment signals in proven technologies
that can deliver without increasing emissions inthe short term.
Opportunity exists to adjust and expand thetransition framework as more assurance develops
in technological developments and forecasts.
The proceeds of Japan’s GX Bond will be earmarked
for subsidies to support the transition, and the bondwill be repaid with the proceeds of the Emissions
Trading System (ETS), starting on a voluntary basis
until at least 2026. In this way, slow movers andlaggards will pay a tax to fund the transition.

4

Seven recommendations
Climate Bonds welcomesthe pioneering initiative
taken by Japan toprovide clear guidanceon transition finance,
including the publicationof the Climate Transition
Finance Guidelines and accompanying industry
technology roadmaps. The GX Plan presented
by the government is a comprehensive policy
package addressing energy efficiency, carbon
pricing, auctions and decarbonisation, all ofwhich will drive the deployment of renewableenergy and reduce costs.
Private sector action is crucial to deliver on
the GX plans. However, it requires further
measures such as implementing economy-wide
requirements and/or guidance for science-based
and 1.5°C degree aligned transition plans. Bothcorporate and financial sector actors have a vitalrole to play in developing and implementing
credible transition plans. To further strengthen
and accelerate the transition in a direction thatwould build investor confidence in Japan andbeyond, we recommend:

1. Prioritise mature technologies
To deliver decarbonisation,
the priority will be to rapidly
grow mature and proventechnologies: energy efficiency,
grid flexibility, demand
management and renewable energy.
Systematic bottlenecks that have slowed thedeployment of solar PV and wind, including
grid limitations and curtailment regulations for
dispatch need to be addressed swiftly and withadequate budget and support. For example,
REpowerEU and the US Inflation Reduction
Act both prioritise renewable scale-up tobuild energy security and drive front-loaded
emissions cuts.36

2. Set a phase-out year for unabated coal
According to the IEA, to achieve
net zero, the power sector inadvanced economies must
be completely decarbonisedby 2035.37 Current projections
and plans for ammonia co-firing are bold but
either the timeline will need to be accelerated
to meet the ambition needed, and/or further
assurance in the delivery of CCUS needs to beestablished to ensure emissions are captured.
Further assurance in the delivery of CCUS also
needs to be established to ensure emissions
are captured.38,39 Ammonia co-firing
investments need to show they can be builtwith the technology and processes needed tominimise emissions of NOx and be restricted
to using low-carbon hydrogen to avoid acatastrophic spike in methane emissions
from fossil-fuel-generated hydrogen. Clear
timelines for unabated coal phase-out withfull GHG decarbonisation will provide market
clarity and spur investments in alternatives.

3. Put in place clear boundaries for any
investment in gas
The role of gas in the energy
transition needs to be strictly
limited to those consistent withclimate objectives and must
address methane leakage. The
phase-out of unabated fossil fuels, including
gas, must be accelerated. This will necessitate
a full life-cycle approach to the measurement(not estimation) of emissions.
Support for and participation in suchinitiatives, as Japan has recently done, arewelcome, and encouraged.40

4. Strengthen requirements
for hydrogen & ammonia to ensure
they are low-carbon
The GX Plans and the recently
updated Basic Hydrogen
2
Strategy commendably indicate
the need to address life-cycle
3emissions on hydrogen.
However, pilot projects to date have delivered
highly polluting fossil fuel-based hydrogenwith long supply chains and high financial
costs. An upfront operationalisation of clear
guidance and/or criteria to ensure hydrogenproduction is sustainable from an energy,
emissions, water and supply chain perspective
will be essential to developing a crediblehydrogen market for Japan and beyond.

Japan: Policies to grow credible transition finance Climate Bonds InitiativeHNH

5. Ensure a strong carbon priceA strong and appropriate
carbon price will need to besupported by a mandatory
ETS with a clear deadline
for the elimination of freeallowances to drive faster decarbonisation.
Early, mandatory carbon pricing with the
IMF recommended minimum of USD75
per ton and a clear deadline to eliminate
free allowances will be important to drive
decarbonisation at the required speed.

6. Enhance and expand transition planrequirements to the private sector
Delivering on government
commitments will bedependent on private
sector action. Establishingrequirements or guidance forcomprehensive, science-based transition
plans for corporates, investors and financial
institutions, will deliver a clear market signal
for investors and spur green investment.
METI’s industry roadmaps accompanying the
Climate Transition Finance Guidelines play a
key role in the transition planning of corporates;
the robustness and credibility of the roadmaps
are thus critical. Industry roadmaps shouldalign with science-based pathways that will
deliver on Japan’s 2030 legal commitments
for decarbonisation and meet the G20 goal of
limiting global warming to 1.5°C.41

7. Build investor confidence witha bold and strictly 1.5°C aligned
sovereign GX bond
The upcoming GX Bond
will have implications for the
future of the transition financemarket in Japan and beyond.
A strictly 1.5°C aligned sovereigntransition bond is critical to build investor
confidence and to mobilise private capital forthe transition. The transition framework can
and should be adjusted as assurance maturesin technological developments and forecasts.

5Endnotes
1. G20 (2022) ‘G20 Bali Leader’s Declaration’ https://www.g20.org/
content/dam/gtwenty/gtwenty_new/document/G20%20Bali%20
Leaders’%20Declaration.pdf
2. Usually referring to heavy industry, energy, aviation,
shipping and agriculture
3. Particularly CCS, CCUS, imported ammonia and hydrogenfor power generation
4.Japan Cabinet (2023) GX Basic Policy for Realization, Roadmap forthe next 10 years’ https://www.cas.go.jp/jp/seisaku/gx_jikkou_kaigi/
pdf/kihon.pdf
5. Official Website of the Prime Minister of Japan and His Cabinet(2020) ‘Policy Speech by the Prime Minister to the 203rd Sessionof the Diet (October 28, 2020)’ https://japan.kantei.go.jp/99_suga/statement/202010/_00006.html
6. MOFA (2021) ‘Leaders Summit on Climate Remarks by H.E. Mr.
Suga Yoshihide, Prime Minister of Japan’ https://www.mofa.go.jp/
files/100181623.pdf
7. Climate Action Tracker (2023) https://climateactiontracker.org/
countries/japan/ (data updated as of 17 May 2023)
8. METI (2021) ‘Green Growth Strategy Through Achieving Carbon
Neutrality in 2050’ https://www.meti.go.jp/english/policy/energy_
environment/global_warming/ggs2050/pdf/ggs_full_en1013.pdf
9. FSA, METI, MOE (2021) ‘Basic Guidelines on Climate
Transition Finance’ https://www.meti.go.jp/pre
ss/2021/05/20210507001/20210507001-3.pdf
10. The Government of Japan (2021) ‘The Long-Term Strategy under
the Paris Agreement’ https://unfccc.int/sites/default/files/resource/
Japan_LTS2021.pdf
11. Japan Cabinet (2023) METI (2023) GX Basic Policy for Realization,
Roadmap for the next 10 years Reference Materials’ https://www.cas.
go.jp/jp/seisaku/gx_jikkou_kaigi/dai5/siryou2.pdf
12. R Japan (2023) ‘Overview of Japan’s Green Transformation(GX)’ https://grjapan.com/sites/default/files/content/articles/files/
gr_japan_overview_of_gx_plans_january_2023.pdf
13. Japan Cabinet (2023) METI (2023) GX Basic Policy for Realization,
Roadmap for the next 10 years Reference Materials’ https://www.cas.
go.jp/jp/seisaku/gx_jikkou_kaigi/dai5/siryou2.pdf
14. https://www.energymonitor.ai/tech/hydrogen/a-half-decadeafter-its-first-plan-japans-hydrogen-goals-remain-distant/

15.Cabinet Secretariat (2023) Basic Hydrogen Strategy https://www.
cas.go.jp/jp/seisaku/saisei_energy/pdf/hydrogen_basic_strategy_
kaitei.pdf
16. Climate Bonds Initiative (2023) Hydrogen Criteria Background
Paper https://www.climatebonds.net/files/files/backgroundpaper-hydrogen-production-and-delivery-draft-for-publicconsultation-100823.pdf
17. Bloomberg NEF (2022) ‘Japan’s Costly Ammonia Coal Co-Firing
Strategy’ https://assets.bbhub.io/professional/sites/24/BNEFJapans-Costly-Ammonia-Coal-Co-Firing-Strategy_FINAL.pdf
18. GHG Protocol (2023) ‘Global Warming Potential Values’ https://
ghgprotocol.org/sites/default/files/ghgp/Global-Warming-PotentialValues%20%28Feb%2016%202016%29_1.pdf
19. Okafor. E.C, (2023) ‘Formation and control of N20 during ammonia
combustion’ https://www.jsme.or.jp/ted/NL99/NL99-2_02_okafor.pdf
20. HESC (2022) ‘Dawn of Australia’s Hydrogen Industry’ https://global.
kawasaki.com/news_220121-1e.pdf
21. J-Power (2023)「豪州ビクトリア州においてガス化褐炭を用いたク
リーン水素製造の事業化を検討します」https://www.jpower.co.jp/
news_release/pdf/news230308.pdf
22. JERA (2023) Zero-Emissions Thermal Power (website accessed on 7
July 2023) https://www.jera.co.jp/en/sustainability/about_zeroemission
23. IEA (2022) ‘Coal in Net Zero Transitions’ https://www.iea.org/
reports/coal-in-net-zero-transitions
24. Renewable Energy Institute (2023) ポジションペーパー：脱炭素への道が見えない「改定水素基本戦略」https://www.renewable-ei.org/
activities/reports/20230629.php
25. Berkeley Lab (2023) The 2035 Japan Report https://etapublications.lbl.gov/sites/default/files/lbnl_2035_japan_report_
english_publish.pdf
26. MOE (2022)「我が国の再生可能エネルギー導入ポテンシャル（概要
資料導入編）」https://www.renewable-energy-potential.env.go.jp/
RenewableEnergy/doc/gaiyou3.pdf
27. IPCC (2022) ‘Climate Change 2022: Mitigation of Climate Change
Contribution of Working Group III to the Sixth Assessment Report of
the Intergovernmental Panel on Climate Change’ https://www.ipcc.
ch/report/ar6/wg3/
28. IEA (2022) Global Methane Tracker 2022 https://www.iea.org/
reports/global-methane-tracker-2022

29. Climate Bonds Initiative (2022) ‘Accelerating the Fossil Gas
Transition to Net Zero’ https://www.climatebonds.net/files/reports/
cbi_gaspolicy_2022_01d.pdf
30. REI (2023) ‘The Evolving Role of Carbon Credits’ https://www.
renewable-ei.org/en/activities/column/REupdate/20230531.php
31. Ian Parry, Simon Black, and James Roaf. (2021) ‘Proposal for an
International Carbon Price Floor among Large Emitters.’ IMF Staff
Climate Notes 2021/001 https://www.imf.org/en/Publications/staff-climate-notes/Issues/2021/06/15/Proposal-for-an-InternationalCarbon-Price-Floor-Among-Large-Emitters-460468
32. Japan Cabinet (2023) GX Basic Policy for Realization, Roadmap forthe next 10 years’ https://www.cas.go.jp/jp/seisaku/gx_jikkou_kaigi/
pdf/kihon.pdf
33. METI (2023) Transition Finance website https://www.meti.go.jp/
english/policy/energy_environment/transition_finance/index.html
34. JPX (2023) ESG Bond Information Platform (data as of 7 July 2023)
https://www.jpx-esg.jp/
35. IGES (2022)「日本における電力分野の早期の脱炭素化に向けたトランジション・ファイナンスの政策的課題」https://www.iges.or.jp/jp/pub/transition-finance-jpn/ja
36. REI (2023) ‘The GX Basic Policy Falls Short in Proposing
Strategies for Overcoming the Current Crises’ https://www.renewableei.org/en/activities/reports/20230228.php#:~:text=The%20GX%20
Basic%20Policy%20reiterates,variety%20of%20possibilities%20
seems%20reasonable
37. IEA (2022) ‘Coal in Net Zero Transitions’ https://www.iea.org/
reports/coal-in-net-zero-transitions
38. JERA (2023) JERA Zero CO2 Emissions 2050 website (accessed on 7
July 2023) https://www.jera.co.jp/en/corporate/about/zeroemission
39. Renewable Energy Institute (2022)「CCS火力発電政策の隘路とリスク」

40. METI (2023) Joint Statement on Accelerating Methane Mitigationfrom the LNG Value Chain https://www.meti.go.jp/english/press/2023/0719_002.html
41. G20 (2022) ‘G20 Bali Leader’s Declaration’ https://www.g20.org/
content/dam/gtwenty/gtwenty_new/document/G20%20Bali%20
Leaders’%20Declaration.pdf

Prepared by Climate Bonds Initiative.

Climate Bonds Initiative, October 2023
Authors: Maiko Morishita, Raquel Bonelli, and Rachel Hemingway
Editorial support: Stephanie Edghill
Suggested citation: Morishita, M., et al., Japan: Policies to grow credible
transition finance, Climate Bonds Initiative 2023
Design: Godfrey Design
Published by Climate Bonds Initiative, October 2023 www.climatebonds.net

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Japan: Policies to grow credible transition finance Climate Bonds Initiative

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