Understanding the demand for Green Steel, page-333

Japan unveils green subsidy programme – can it compete with the U.S. Inflation Reduction Act? | Allen & Overy LLP - JDSupra

The Japanese government’s ambitious support package aims to unlock USD1 trillion of investment in low carbon infrastructure over the next decade. We break down the draft law and explore some of the issues that still need working through.When the Biden Administration launched the Inflation Reduction Act (IRA) in summer 2022, the USD370 billion boost it gave to U.S. green investment via a multitude of grants, loans and tax credits caught the attention of businesses across the world. Private capital is now flowing into a range of low-carbon infrastructure projects across the country, helping to accelerate the U.S. green transition.

Following a period of public scrutiny and comments, the draft is now being considered by the Japanese Parliament. Its current form would see the government issue in total around USD150 billion in Japanese Government Bonds (or JGBs) starting this financial year to fund the initial wave of investments, with the aim of catalysing USD1 trillion of developments over the next 10 years.The package covers all aspects of the green transition, from nuclear to renewables, grid upgrades, energy efficiency measures, electric vehicles, carbon taxes, an emissions trading scheme and a border adjustment mechanism.

Japan is the key destination market of existing global energy supply chains, and its role is likely to continue in emerging energy supply chains. Both the Green Transformation Act and the amendments to the JBIC Act are being discussed at the current session of the parliament, scheduled to end on 21 June 2023. In parallel, Japan's national hydrogen and ammonia strategy will be updated by the end of May 2023. Whilst further details remain to be fleshed out, as discussed in this article, the adoption of these acts will be ground-breaking to stakeholders of energy transition not just in Japan, but globally."

Changes in policy is the first step. All signs are leading to renewable/clean energy + green steel. At this stage it is clear that the world is moving towards our direction. Patience is all that is needed.