Japan's industrial sector stands at the threshold of a sweeping transformation in 2026. The Japanese government has been mapping out a medium- to long-term roadmap for industrial and energy transition, weaving together energy policy, decarbonization and supply chain restructuring into a single strategic framework.
Tokyo has set a target of raising the share of renewables — solar, wind and hydropower — to 40 to 50 percent of total power generation by 2040, while gradually expanding carbon pricing and emissions trading schemes to strengthen corporate accountability for greenhouse gas management. Since April, mandatory emissions trading has been in full effect for companies releasing more than 100,000 metric tons of carbon dioxide annually, making renewable energy adoption and carbon data management no longer optional but essential for Japanese businesses.
Another major policy thrust running parallel to this is the reinforcement of the manufacturing base for economic security. In April, the Japanese government released an interim report on strengthening manufacturing capacity, saying a comprehensive and integrated support framework was needed for resources critical to economic security and for the key materials, components and technologies required to develop next-generation industries. The government plans to use the report as a foundation for concrete measures to bolster the manufacturing base.
This integrated policy approach — managing and supporting energy, decarbonization and supply chains in tandem — has moved well beyond government declarations and is now generating real demand on the factory floor. At the center of this shift is the Osaka-Kansai region.
Osaka grew into Japan's largest commercial city on the strength of its 17th-century port, and after modern industrialization it developed into a leading manufacturing hub in heavy and chemical industries. The region concentrates Japan's power and energy companies alongside precision machinery and robotics firms, with large-scale buyers and related businesses clustered in close proximity. As global supply chain realignment accelerates, Japanese companies have taken a growing interest in Korean firms, which offer geographic proximity, fast delivery turnaround and flexible on-site responsiveness.
The 2026 Korea-Japan Energy and Materials, Parts & Equipment Business Partnering Plaza, held in Osaka in May, offered a firsthand look at these dynamics. KOTRA's Osaka trade office has now hosted the business consultation event for four consecutive years, bringing together major Japanese companies — including Kansai Electric Power and Kawasaki Heavy Industries — and more than 30 Korean energy and materials, parts and equipment firms.
One renewable energy company secured a large-scale power plant renewal project through connections made at the event and went on to record $37 million in exports over the past year. A clear trend has emerged among Japanese companies grappling simultaneously with energy efficiency, stable supply and carbon management requirements: an active search for competitive Korean partners. Korean firms are establishing themselves not merely as supplementary options but as substantive partners capable of solving pressing challenges together.
Korea-Japan cooperation in 2026 is evolving into a strategic partnership built on jointly navigating uncertainty and a shifting energy paradigm. As Japan undergoes its great industrial transformation, there is every reason to expect the two countries to emerge as forward-looking industrial partners in advanced manufacturing.
By Kim Kyung-mi, head of KOTRA's Osaka trade office
eyre@heraldcorp.com
