Japan announces plan to ban gasoline-powered cars by mid-2030

The Japanese government announced a plan on December 25 that seeks to replace the sale of new gasoline-powered vehicles with electric vehicles, including hybrid and fuel-cell vehicles, by the mid-2030s.

The government plans to reach net zero carbon emissions and generate nearly USD2 trillion a year in green growth by 2050.

The government laid out for the first time what meeting that target will involve, including setting a provisional goal of generating more than half of the country’s electricity from renewable sources by 2050.

The “green growth strategy”, targeting the hydrogen and auto industries, is meant as an action plan to achieve Prime Minister Yoshihide Suga’s pledge in October to eliminate carbon emissions on a net basis by mid-century.

To accelerate the spread of electric vehicles, the government targets slashing the cost of vehicle batteries by more than half to JPY10,000 (USD96.50) or less per kilowatt hour by 2030.

It aims to boost hydrogen consumption to 3 million tonnes by 2030 and to about 20 million tonnes by 2050 from 200 tonnes in 2017.

The strategy identifies 14 key industries, including offshore wind and fuel ammonia, targetting the installation of up to 45 gigawatts (GW) of offshore wind power by 2040.

Japan also aims to use renewable energy “as much as possible” by 2050, mainly through offshore wind farms. The government’s goal is for renewable energy sources to account for 50% to 60% of the nation’s power by 2050, up from less than 20% now.

The plan follows similar moves by major European nations, China, Singapore and South Korea, as well as the U.S. state of California.

Japan would still permit the sale of hybrid gas-electric cars after 2035 under the plan. Many models from Japan’s top car makers—Toyota, Honda Motor Co. and Nissan Motor Co. —come in both traditional and hybrid versions.

Reducing carbon emissions “should be tackled as a strategy for growth, not as a limitation on growth,” said Japanese Prime Minister Yoshihide Suga.

An outline of the plan released by the Ministry of Economy, Trade and Industry (METI) expressed concern that Europe and China were getting ahead of Japan. Sales of electric and plug-in hybrid vehicles more than tripled in the EU in the July-to-September quarter to around 270,000 units, while the equivalent figure for Japan was about 6,000.

The government will offer tax incentives and other financial support to companies, targeting JPY90 trillion (USD870 billion) a year in additional economic growth through green investment and sales by 2030 and JPY190 trillion (USD1.8 trillion) by 2050.