Climate Policy Engagement Analysis
Climate Policy Engagement Overview: The Japanese Business Federation (Keidanren) has historically lobbied negatively on many strands of climate change regulation in Japan. In recent years, however, Keidanren has become more positive in its top-line statements, placing increasing emphasis on investment and technology innovation to achieve the national 2030 and 2050 carbon neutrality goal announced by the Japanese government. Despite this shift in its top-line messaging, Keidanren’s position continues to be oppositional towards regulated carbon taxes and the phaseout of thermal power, emphasizing the role of voluntary initiatives that it leads. This is significant as many Japanese corporations defer their political engagement to trade associations, of which Keidanren is probably the most powerful and influential.
Top-line Messaging on Climate Policy: Keidanren’s top-line messaging on climate policy is conflicted.
In an NHK interview in May 2022, Chairman Tokura warned that global CO2 concentrations are close to 450 ppm, adding that once the "tipping point is crossed... the warming will advance irreversibly” and “if we leave the situation any longer, the global ecosystem will collapse". In a June 2022 speech on the Green Transformation (GX) at the Keidanren, the Chair stressed the urgency of reaching the 2030 and 2050 emission targets.
Keidanren’s report on Contribution to Reduction through Global Value Chains released in March 2023, supported the goals of the Paris Agreement, stating “to limit the increase in global average temperature from pre-industrial times to less than 2 °C as of the end of this century.” Keidanren also signed the B7 Joint Statement in April 2023 supporting the increased ambition on the nationally determined contributions (NDCs).
Keidanren frequently advocates for broad government measures that promote investment and technology innovation. In a May 2022 policy proposal on the Green Transformation (GX), Keidanren strongly urged the government to develop a GX policy package with a more ambitious “Green Deal” investment plan. Similarly, Keidanren called for the “Green Deal” financing and the development of a GX roadmap to enable technology R&D and investment by the private sector in its proposal on sustainable capitalism in July 2022. Keidanren’s September 2022 proposal on the fiscal year (FY) 2023 tax reform, supported the government intent to develop a 10-year GX Roadmap that would include “regulations, market design, government support, financial frameworks” and other measures to promote private investment.
However, at a Ministry of Economy Trade and Industry (METI) committee in November 2022, Keidanren supported the “growth-oriented carbon pricing” with the condition that “the system must not become a burden on other financial resources”.
Engagement with Climate-Related Regulations:
Keidanren overall position on climate regulations is negative.
Keidanren’s long-standing opposition to carbon pricing initially softened in February 2021, when the ex-Chair, Hiroaki Nakanishi suggested at a press conference that discussions on the carbon price should not be held from the position of assumed energy cost increase, signaling a willingness to engage. In June 2022, Keidanren Chairman Tokura said that carbon pricing “cannot be avoided in the pursuit of Green Transformation”.
Chair Tokura expressed mixed support for the cap-and-trade system in a June 2022 Nikkei Business interview, supporting extending its coverage to the whole country in the future but with an unclear timeline; he also cautioned that emission prices of 10,000-15,000 yen/t-CO2 would be too high. In the same interview, Chairman Tokura appeared unsupportive of carbon taxes.
In May 2022, at the Cabinet meeting on the Clean Energy Strategy attended by the Prime Minister and various Ministers, Chair Tokura opposed a carbon tax and took an unclear position on emissions trading, recommending continued deliberations on its impacts. In its proposal for Tax Reform for Fiscal 2023, Keidanren opposed the raising Global Warming tax and the introduction of a new carbon tax.
Positioning on Energy Transition:
Keidanren’s position on the energy transition is generally negative.
In “Proposal, Towards the Overseas Deployment of Strategic Infrastructure System,” published on Keidanren’s website in March 2023, the association broadly supported the stable operation of renewable energy-related systems in Asian countries. However, in a METI hearing in September 2022, Keidanren appeared unsupportive of a large-scale introduction of renewable energy.
At a press conference introducing Keidanren’s proposal on the Green Transformation (GX) in June 2022, the Chair called for the “switch to LNG and other low carbon sources” and “reducing the dependence” on thermal power generation by 2030, while also promoting the use of thermal power to 2050 with a reference to decarbonization through hydrogen, ammonia and CCUS in a way that appears to be misaligned with the IPCC timelines.
In April 2023, Keidanren submitted its position paper on "Overseas Development of Strategic Infrastructure Systems" to Chief Cabinet Secretary Matsuno, which advocated for investment into LNG power infrastructure along with hydrogen and ammonia thermal power technologies. In September 2022, Keidanren issued a proposal on the 2023 tax reform, where it requested reductions on the gasoline tax, and rebates on petroleum and coal taxes. At a subcommittee on Electricity and Gas Basic Policy held by METI in January 2023, Keidanren argued that the public should bear the risks and costs of fossil fuels, while arguing that “a certain scale of thermal power generation” is needed in the future.
In July 2022, at the Cabinet Green Transformation (GX) council, Chair Tokura urged the Japanese government to restart and approve the construction of nuclear power plants without specifying a position on the broader energy mix. Support for nuclear power was repeated in the Chair press conferences in June 2022 and September 2022. In the Chair press conferences in October 2022, Chair Tokura appeared to support a longer role for nuclear power in the energy mix, but seemingly as an alternative to a transition to renewable energy.
Keidanren’s proposal on the Green Transformation (GX) released in June 2022, promotes EV and hydrogen infrastructure for automobiles, while also advocating for R&D on internal combustion engines that can burn hydrogen, e-fuels and biofuels. In an article published by Nikkan Kogyo Shimbun in December 2022, Keidanren advocated for a long-term role for ICE-powered hybrid light-duty vehicles rather than a full transition to battery electric vehicles, arguing that "various means" will promote decarbonization.
InfluenceMap collects and assesses evidence of corporate climate policy engagement on a weekly basis, depending on the availability of information from each specific data source (for more information, see our methodology). While this analysis flows through to the company’s scores each week, the summary above is updated periodically. This summary was last updated in Q2(Apr-Jun) 2023.