Japan’s leading oil companies are pulling back from ambitious decarbonisation efforts, including hydrogen and ammonia projects, as the global energy sector re-emphasizes fossil fuels amid concerns over energy security, cost inflation, and policy uncertainty.
Eneos Holdings, Japan’s largest oil refiner, said it is deprioritizing large-scale hydrogen and ammonia initiatives in light of soaring material costs and dwindling profitability. CEO Tomohide Miyata noted the global momentum toward carbon neutrality is slowing, and the anticipated tipping point for a broader energy transition may now occur later than the previously expected 2030 timeline.
In its latest three-year strategy, Eneos dropped its earlier goal of supplying up to 4 million metric tons of hydrogen by 2040. Instead, the company will focus on stable, cost-effective energy sources, particularly oil and liquefied natural gas (LNG).
Miyata emphasized that economic realities now outweigh long-term green commitments.
Idemitsu Kosan, Japan’s second-largest refiner, is also scaling back its decarbonisation spending.
The company revised its investment plan for hydrogen, ammonia, and synthetic fuels from 1 trillion yen ($6.9 billion) to 800 billion yen through fiscal 2030. President Noriaki Sakai said the firm is adopting a more flexible approach, citing reduced momentum toward carbon neutrality.
These shifts align with a broader trend among global energy companies. In recent months, BP scaled back renewables investment, while Norway’s Equinor scrapped its 2030 low-carbon spending target. At the CERAWeek energy conference in March, industry leaders called for a shift from “energy transition” to “energy additions,” highlighting the ongoing role of fossil fuels in global energy security.
The remarks from Japanese executives mark some of the clearest acknowledgments yet that the road to net zero may be longer and more complex than initially projected.
