Across the globe, countries, governments, and private-sector companies face the challenge of transitioning to clean energy and decarbonization, while ensuring a stable and affordable supply of energy, an undertaking referred to as the “energy trilemma.”

Yet, when examined closely, the interests of the public and private sectors can be seen as diverging, with approaches towards decarbonization varying widely among countries, regulators, companies, and broader stakeholders. This divergence has only intensified with the rise in geo-political tensions and economic protectionism.

Is Japan going too slow?

In the case of Japan, some critics accuse it of being a laggard in the energy transition and of clinging to fossil fuels such as coal, oil, and gas, with a reluctant to embrace renewables and clean tech.

The reality is more nuanced. Japan, including its government and major energy companies, is forging a unique middle ground.

In its Strategic Energy Plan, the government has committed to reaching net-zero emissions by 2050 and increasing the rollout of wind and solar. It has set a target of increasing the share of renewable energy to 36%-38% by 2030, up from just 18% in 2019.

It is also supporting foreign investment and expertise – although we believe the government could do more to promote its collaboration with domestic and overseas energy companies. In the second round of public auctions for offshore wind operators last year, the government selected three consortia that included both Japanese and foreign players – in this case – Itochu and Sumitomo Corporation, both large trading companies in Japan and Germany-based RWE Renewables.

Efforts to participate in the rapidly growing market for renewables are substantial, and the positive impact on Japan’s carbon footprint will be significant in the long run.

Continued role of fossil fuels

On the flipside, Japan will continue to rely on fossil fuels, especially liquefied natural gas (LNG), for the long term.

Why? Japan’s unique path is shaped by several factors. As an island nation with 70% forest cover, a mountainous interior, and steep coastlines, Japan has fewer opportunities to deploy wind and solar facilities at the pace of many Western countries. Additionally, with an energy self-sufficiency rate of just 13% and a lack of natural traditional energy resources, Japan lags most other countries. The legacy of nuclear power also influences Japan’s energy decisions. The Fukushima nuclear accident in 2011 drastically reduced nuclear energy usage, from 25%-35% in the 2000s to only 5% by 2022, with public sentiment against nuclear continuing to run high.

Innovation and collaboration will be key

Japan is looking to bring its track record and legacy of innovation to the energy sector. It is one of the few countries that aims to combine LNG with the innovative and pioneering technology of co-firing hydrogen and ammonia to significantly reduce emissions. Interestingly, it plans on doing so while simultaneously increasing the use of renewables.

Japan’s energy transition is a collaborative effort between the government and the private sector, involving both domestic and overseas companies. Recent partnerships have included Saudi Arabia’s state-run oil giant Saudi Aramco joining forces with trading houses Mitsubishi Corp. and Mitsui & Co, and JERA signing ammonia joint development agreements with CF Industries, the world’s largest ammonia producer, and ReNew, the Indian renewables giant.

A need for a better understanding

While Japan’s balanced approach is admired by many in the public and private sectors of the West, environmental organizations criticize it for its perceived lack of focus on renewables.

Yet, given its unique position and history, Japan has little alternative.

That said, we believe Japan could do a much better job presenting its position. It is here that Japan has a domestic and international communication challenge.

An opportunity for communications

To capitalize on the business opportunities presented by the energy transition, protect Japan’s international reputation, and reduce the threat of enterprise threatening reputational risk, robust communications strategies and thoughtful execution are key.

We believe there is the chance for both domestic and international energy companies to better communicate their role in Japan’s energy transition. These include:

• Engaging with key stakeholders: Identifying and engaging with key stakeholders in the Japan market, including media, government regulators, and private-sector leaders.
• Tailoring messages to fit the Japanese context: Adjusting communications to fit Japan’s unique environment, considering cultural nuances and specific stakeholder concerns.
• Emphasizing long-term commitment: Communicating a deep bond to supporting Japan’s energy goals through investments in sustainable technologies and infrastructure.
• Highlighting collaborative efforts: Emphasizing collaboration and partnerships and showcasing successful joint ventures and collective efforts to solve complex energy challenges.

Japan’s approach to the energy transition offers a unique model that balances tradition with innovation, underpinned by collaboration and technological advancement. As Japan continues along this path, it opens up opportunities for global partnerships and technological development. The outstanding question is this: How will other countries and companies choose to engage with the evolving energy landscape in and outside of Japan, and can they embrace Japan’s commitment to the middle-way.