Japan faces one of the most complex energy challenges of any major economy: a high dependence on imported fossil fuels — particularly LNG — combined with ambitious decarbonisation targets and the politically sensitive question of nuclear power’s future role. In 2026, the country is navigating a difficult path between energy security, affordability and climate goals.

The LNG Dependency

Japan is one of the world’s largest LNG importers, a position that dates from the accelerated shutdown of its nuclear fleet following the 2011 Fukushima disaster. LNG imports surged to fill the gap left by nuclear, and while some reactors have been restarted, Japan’s LNG dependency remains structurally high. This makes Japan highly exposed to global LNG price movements and supply security risks.

Nuclear: The Contentious Path Forward

Japan’s government has indicated that nuclear power should play a larger role in the country’s energy mix, citing both decarbonisation and energy security goals. Several reactors have been cleared to restart by the Nuclear Regulation Authority and are gradually returning to service. However, public acceptance of nuclear power remains limited following Fukushima, and the pace of restarts has been slower than the government hoped.

Renewables: Growing but Constrained

Japan has significant renewable energy resources — particularly offshore wind costs in 2026 and geothermal — but has been slower to deploy them than other major economies. Grid connection constraints, complex permitting processes and a historically fragmented and vertically integrated utility sector have all slowed renewable deployment.

The Energy Security Premium

For Japan, energy security is not an abstract concept but an existential concern. The country has almost no domestic fossil fuel resources and must import essentially all of its oil, gas and coal. The premium Japan pays for energy security — in the form of long-term LNG contracts, strategic reserves and energy diversity programmes — is a significant economic burden.