Japan aims to phase out gasoline vehicles by mid-2030s and boost green growth

TOKYO (Reuters) – Japan aims to phase out gasoline vehicles over the next 15 years, the government said on Friday in a plan to achieve net zero carbon emissions and generate nearly $ 2 trillion a year in green growth by 2050.

The “Green Growth Strategy”, targeting the hydrogen and automotive industries, is intended as an action plan to fulfill Prime Minister Yoshihide Suga’s October pledge to phase out carbon emissions on a net by mid-century.

Suga has made green investing a top priority to help jump-start the economy hit by the COVID-19 pandemic and align Japan with the European Union, China and other economies setting emissions targets ambitious.

The government will offer tax incentives and other financial assistance to businesses, targeting 90 trillion yen ($ 870 billion) per year in further economic growth through green investment and sales by 2030 and 190 trillion yen ( $ 1.8 trillion) by 2050.

A 2 trillion yen green fund will support business investment in green technologies.

The plan aims to replace the sale of gasoline vehicles with electric vehicles, including hybrid and fuel cell vehicles, by the mid-2030s.

To accelerate the spread of electric vehicles, the government aims to cut the cost of vehicle batteries by more than half to 10,000 yen or less per kilowatt hour by 2030. It aims to reduce hydrogen consumption to 3 million tonnes by 2030 and around 20 million tonnes by 2050 from 200 tonnes now, in areas such as power generation and transportation.

The strategy identifies 14 industries, such as offshore wind and ammonia, that aim to install up to 45 gigawatts (GW) of offshore wind power by 2040.

(1 USD = 103.5500 yen)