Japanese Cabinet approved “GX 2040 Vision: Revision of the Strategy for Promoting Transition to a Decarbonized Growth-Oriented Economic Structure” 
On January 18, 2025, the Japanese Cabinet approved the GX 2040 Vision: Revision of the Strategy for Promoting Transition to a Decarbonized Growth-Oriented Economic Structure, heading towards the Green Transformation (GX)—a simultaneous realization of stable energy supply, economic growth, and decarbonization. The GX 2040 Vision offers a long-term strategy to enhance investment predictability towards the realization of GX under the circumstance where various situational changes have brought uncertain prospects for the energy supply-demand balance, and for the introduction rate and cost reduction of innovative technologies required to achieve carbon neutrality. The GX 2040 Vision is composed of the following parts: (i) Introduction, (ii) GX industrial structure, (iii) GX industrial sites, (iv) Importance of realistic transition and contribution to global decarbonization, (v) Efforts in specific sectors, such as energy, to accelerate GX, (vi) Growth-oriented carbon pricing scheme, (vii) Fair transition, and (viii) Progress and review of GX policy implementation.
Part-by-part overview of the GX 2040 Vision
(i) Introduction
The introductory part presents the overview of the GX 2040 Vision that details the policy for simultaneous realization of securing stable energy supplies, economic growth, and decarbonization in the face of growing uncertainties in future prospects due to increasing tensions in the Ukraine and Middle East situations or other issues.
(ii) GX industrial structure
This part describes the industrial structure to be realized by GX efforts in which new GX projects will emerge one after another and in which supply chains—from raw materials to products—will have been sophisticated by using decarbonated energy or other means. In order to realize them, the following six key efforts are suggested:
- Improvement of systems for corporate management and capital markets that encourages companies’ investment in growth;
- Social implementation of and policy coordination for innovations in collaboration with domestic and international academic or other institutions;
- Positive carve-out from major companies;
- Market creation leading to the formation of the GX industry;
- GX by small and medium-sized enterprises; and
- Utilization of new financing methods.
(iii) GX industrial sites
Green steel, semiconductor, and data center industries using clean energies such as decarbonized power are expected to lead Japan’s economic growth. Nevertheless, this part suggests the need to develop new industrial lands and electricity infrastructure on the grounds that clean energy supply bases are located in limited areas.
(iv) Importance of realistic transition and contribution to global decarbonization
Because the relative energy price gap is extremely important for the maintenance and development of domestic industries, it is necessary to assess the global situation with clear eyes to take measures to promote GX investment.
(v) Efforts in specific sectors, such as energy, to accelerate GX
This part specifies efforts to be made in individual sectors, such as energy-related sectors; steel, chemical, paper, cement, and other similar sectors in which decarbonization is difficult; the next-generation automobile sector; and the next-generation airplane sector.
(vi) Growth-oriented carbon pricing scheme
GX economic transition bonds worth about 20 trillion yen will be issued to support prior investment for GX. For this purpose, carbon pricing will be introduced in a stepwise manner. (Full operation of the emission trading scheme from FY 2026; introduction of a surcharge on fossil fuel supply in FY 2028; and introduction of paid auctions for electricity generation utilities in FY 2033)
(vii) Fair transition
Necessary measures will be taken so that transfer of labor will properly proceed in response to changes in the GX industrial structure.
(viii) Progress and review of GX policy implementation
The progress of prior investment towards the realization of GX will be reported to the GX Implementation Council .
Related URLs:
- Press release by the Ministry of Economy, Trade and Industry on the “GX 2040 Vision: Revision of the Strategy for Promoting Transition to a Decarbonized Growth-Oriented Economic Structure”
https://www.meti.go.jp/press/2024/02/20250218004/20250218004.html
- GX 2040 Vision: Revision of the Strategy for Promoting Transition to a Decarbonized Growth-Oriented Economic Structure
https://www.meti.go.jp/press/2024/02/20250218004/20250218004-1.pdf
- Overview of the GX 2040 Vision
https://www.meti.go.jp/press/2024/02/20250218004/20250218004-3.pdf
