Japan's government is prioritizing economic security and supply chain resilience, but a new analysis from E3G argues that decarbonizing industrial value chains is a missing piece of that strategy. The article points out that global trade is shifting toward low-carbon goods, driven by mechanisms like the EU's CBAM and rising clean tech competition. Japan's continued reliance on hybrid vehicles and fossil fuel infrastructure creates a competitive risk as markets tighten carbon rules and accelerate electrification. The piece highlights Japan's vulnerability to fossil fuel imports from the Persian Gulf and its dependence on China for critical minerals and clean tech supply chains. It argues that Japan needs to build low-carbon industrial partnerships, for example with Australia on green steel and battery supply chains, and push manufacturers to adopt low-carbon procurement standards. Without faster power sector decarbonization and a decisive shift to battery electric vehicles, Japan risks losing competitiveness in core sectors like automotive. For anyone tracking industrial decarbonization or clean trade policy, this article connects the dots between economic security and the clean energy transition. It offers a concrete look at the trade-offs Japan faces between alliance politics, short-term energy security, and long-term structural resilience.
