Heavy industry has struggled to attract capital for transition away from carbon
TOKYO — Japan looks to grease the wheels for heavy industry to raise capital for investments that cut carbon emissions, an area that has struggled to attract funding compared with big renewable energy projects.
The government will set guidelines to allow the sale of bonds and other financial products for climate transition projects, with an eye toward areas such as steel, chemicals, electricity and maritime shipping.
Tokyo hopes this will attract cash from environmentally conscious investors who tend to steer clear of smokestack industries. Though so-called green bonds have gained traction as a way to raise money for environmental projects, just 0.5% of these bonds worldwide have been issued by the industrial sector.
Japan has announced a 2 trillion yen ($19.3 billion) fund to support the transition to renewable energy and other low-carbon technologies, as the country aims for net-zero emissions by 2050. In the U.S., President Joe Biden plans to pour $2 trillion into sustainable infrastructure over four years. The European Union’s “Green Deal” calls for 1 trillion euros ($1.2 trillion) in public and private investment over a decade.