Negotiations on Japan’s FY2024 budget are well underway, pitting the Ministry of Finance bean counters against METI, the MoE and other ministries that seek to maintain or increase their funding in the wake of the COVID splurge. Some of the key budget items – and arguments – will revolve around decarbonization.
Japan needs to invest substantially in clean energy, but it also faces massive fiscal challenges. How much of the proposed energy-related spending will eventually be approved, and for which pathways, will determine where the country sits mid-way through a decade during which it has vowed to slash emissions by as much as half.
A number of emergent industries, such as clean hydrogen and carbon capture, see this state funding as the catalyst they need to move from pilot projects to commercial scale. For the established players in thermal and nuclear power, funds are vital for revamping aging infrastructure and introducing new technologies. For those involved in renewables, state support could help revive flagging momentum.
Japan’s FY2024 budget is almost certain to be the biggest yet. Even so, it will still struggle to satisfy all parties. So, who are the likely winners?