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Japan plans USD 1.34 billion in subsidies to support companies using 100% decarbonized electricity. (Photo: iStock)
Japan will deploy JPY 210 billion (USD 1.34 billion) in subsidies to support companies that rely entirely on decarbonized electricity, with support covering up to 50% of capital expenditure, government officials said on Monday.
The program is part of Tokyo’s broader effort to nurture regional industrial clusters by backing facilities that manufacture highly competitive products such as semiconductors, industrial robots and pharmaceuticals. Data center operators meeting the same criteria will also be eligible. Funding will be provided over five years starting in fiscal 2026, according to Juntaro Shimizu, director of the Green Transformation (GX) policy group at the Ministry of Economy, Trade and Industry.
Clean power subsidy to support the GX 2040 vision
A key requirement of the scheme is that electricity used must be 100% derived from renewable or nuclear sources, including next-generation technologies such as perovskite solar cells. Japan will subsidize up to half of an investment if a newly built factory uses fully decarbonized electricity and operates in the same area as the power source. If the factory is located outside the power source’s region, the subsidy rate will fall to around 20%.
