Japan Electrotech Revolution: Ember Sees $90 Billion Export Risk
Japan could cut its annual fossil-fuel import bill by three-quarters through electrification and renewable energy, Ember says. The analysis warns that exports of fossil-fuel-linked products and technologies could fall by about $90 billion by 2035 as global transport and power systems electrify.
Japan could cut its annual fossil-fuel import bill by three-quarters through electrification and renewable energy, while exports linked to fossil fuels face a potential $90 billion decline by 2035, Ember says in its japan electrotech revolution analysis.
The warning puts Japan’s industrial strategy in focus as countries expand electric transport and reduce the use of liquefied natural gas (LNG) for power. Japan is a major exporter of electric technologies, but remains reliant on imported fossil fuels.
Japan is the world’s fifth-largest electrotech exporter, with companies producing heat pumps, electric motors, batteries and grid equipment. Its homes and factories are more electrified than those in the European Union, the United States or China, Ember says.
Yet domestic solar and wind resources could meet Japan’s electricity demand 13 times over, the analysis says, while the country has deployed little wind power and has electrified more slowly than the rest of Asia.
Japan spent at least ¥13 trillion (about $86 billion) since 2022 to hold down fuel prices, Ember says. The analysis also says public funding has supported established technologies including LNG, hydrogen, ammonia and carbon capture and storage, while Japanese automakers have sold hybrids rather than electric vehicles.
Ember estimates that Japan exported $161 billion in fossil-fuel-linked products and technologies in 2024, equal to its fossil-fuel import bill. As markets shift toward electric vehicles and other forms of electrification, those exports could fall by about $90 billion by 2035.
The analysis warns that Japan could lose sales of fossil-fuel equipment, including gasoline-powered cars, and face stranded LNG assets. It says China has moved ahead of Japan in electric vehicles and is close to overtaking it in industrial electrification.
Ember says Japan could reduce its dependence on fossil-fuel imports from 86% to about 20% by electrifying transport, power and low-temperature heat. The shift could bring fossil imports below $40 billion and lower electricity prices, the analysis says.
To compete, Japan should set electrification targets, expand batteries and other tools that help balance electricity supply, and redirect public funds and industrial policy toward electric technologies, Ember says. It also calls for a larger domestic market for electric vehicles.
Ember says the costs of solar, wind, batteries and electric vehicles are falling as production expands. Each doubling of production has cut the cost of solar modules and batteries by a fifth or more, the analysis says.
