Japan Business Federation (Keidanren)

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Tokyo, Japan

Climate Lobbying Overview: The Japanese Business Federation (Keidanren) has historically lobbied negatively on many strands of climate change regulation in Japan. In the 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 mixed. 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 proposal for COP26 released in October 2021, called for the “conclusion on the detailed rules regarding market mechanisms under the Paris Agreement (Article 6)”. Keidanren also signed the B7 Joint Statement in May 2021 supporting the progress on Article 6 negotiations. However, at a Ministry of Economy Trade and Industry (METI) study group in May 2021, Keidanren seemed to oppose obligatory mechanisms, and pushed for emissions trading based on voluntary credits to be included under the Paris Agreement.

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.

In its comment to the U.S. Securities and Exchange Commission (SEC) on climate disclosure submitted in June 2021, Keidanren appeared to weaken the rules by advocating for voluntary disclosure “for the time being”, and in cases where statutory disclosures are required, to limit the scope to a minimum.

Engagement with Climate-Related Regulations: Keidanren overall position on climate regulations is negative. Keidanren’s long-standing opposition to regulated carbon pricing initially softened in February 2021, when the ex-Chair, Hiroaki Nakanishi in a press conference suggested 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”.

Keidanren offered conditional support for a cap & trade emissions trading system to be initially tested with free allocations within a voluntary, industry-led GX League of companies, in the May 2022 proposal on the Green Transformation (GX). However, in the same document, Keidanren maintained its opposition to raising the existing Global Warming tax and the introduction of new carbon taxes.

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.

Positioning on Energy Transition: Keidanren’s position on the energy transition are generally negative. In a public comment on the 6th Basic Energy Plan in October 2021, Keidanren framed its support for renewables becoming the main power source in 2030, on the condition that they must be "low cost" and "stable", while emphasizing the economic concerns of the Feed-in-Tariff (FIT). In the same submission, Keidanren opposed the rapid phasing out of fossil power, especially criticizing the reduced share of LNG-fired power proposed in the draft Energy Plan.

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 a Cabinet meeting on the Clean Energy Strategy in May 2022, Keidanren advocated for the need to secure LNG and fossil fuels “during the transition period” and develop of hydrogen and ammonia supply chains, without specifying timelines for decarbonization. In its March 2022 plan for overseas expansion of strategic infrastructure, Keidanren advocated for the continued export of coal combustion technology to Asia, and promoted LNG, hydrogen and ammonia as decarbonization technologies, without clear references to decarbonizing hydrogen/ammonia production, nor CCS capture for LNG use. In September 2022, Keidanren issued proposal on the 2023 tax reform, where it requested reductions on the gasoline tax, and rebates on petroleum and coal taxes.

In August 2022, at the Cabinet Green Transformation (GX) council, Keidanren called for technology innovation and “various measures” to reach the 2030 renewables target outlined under the Basic Energy Plan. In the same council in July 2022, 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 proposals on sustainable capitalism published in June 2022 and in July 2022 Keidanren called for an increase in renewable energy and nuclear power.

Keidanren’s proposal on the Green Transformation 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 its policy proposal on the Green Growth Strategy in June 2021, Keidanren conditionally supported vehicle electrification and fuel measures to be implemented in a “technology-neutral” manner.

Industry Association Governance: Keidanren appears to have disclosed its board and company memberships as well as about membership (chairs) of committees and working groups. Keidanren has partially disclosed its positions on climate change policies relevant to its operations and has some detailed engagement activities undertaken to influence these policies. It also has a dedicated webpage regarding its climate change positions and direct engagement on climate relevant policy issues.

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 entity's scores each week, the summary above is updated periodically. This summary was last updated in Q3 2022**

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