Jump to:
Overview
In 2021, Japan ranked as the world’s fifth-highest energy consumer, with 72% of Japan’s electricity generation being fossil fuel based in the same year. The Japanese Ministry of Economy, Trade and Industry has announced Japan’s Roadmap to ‘Beyond-Zero’ Carbon, with the aim for Japan to achieve net zero greenhouse gas emissions by 2050. To reach this goal, Japan will need to pivot away from fossil fuels and embrace new energy sources.
Estimates show Japan is likely to have a realistic offshore wind potential of 600 GW, having the world’s sixth-largest sea space. As of early 2023, Japan has one operational large-scale offshore wind farm alongside smaller capacity installations. However, the Japan Wind Power Association expects 15% of Japan’s electricity to supplied by wind by 2050.
The UK is a world-leader in offshore wind, being home to the 4 largest offshore wind farms in the world and having the most installed capacity of offshore wind in Europe at around 14.2 GW. With Japan aiming to scale up their usage of offshore wind, opportunities will be available for UK businesses to export their expertise.
Following a decreasing dependence on nuclear energy during the previous decade, as of 2023, only 10 of Japan’s 33 nuclear power reactors were online. However, a 2022 ministerial announcement signalled a rising interest in nuclear energy in Japan, with plans for restarting existing nuclear reactors, the building of new plants and increased development of relevant technologies.
As of 2022, just under 14% of electricity in the UK was generated by nuclear means, with this expected to rise. UK nuclear knowledge and technologies offer key opportunities to trade with Japan as both nations seek to increase their nuclear capacities.
Our Free Trade Agreements with this market enhance your ability to take advantage of these opportunities, by making exports faster, simpler and cheaper.
Trade agreements with Japan
The UK has 2 Free Trade Agreements (FTAs) with Japan:
- the UK-Japan Comprehensive Economic Partnership Agreement (CEPA) henceforth referred to as the UK-Japan FTA, which entered into force on 1 January 2021
- the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a trade agreement including 12 countries (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the UK and Vietnam) which entered into force between the UK and Japan on 15 December 2024
The following Parliamentary Report provides information about significant differences between the UK-Japan FTA and the EU-Japan FTA.
The UK-Japan FTA will remain in force alongside CPTPP. At times, you will need to specify which agreement you choose to trade under (notably when applying rules of origin), but benefits from either agreement will mostly apply automatically.
CPTPP entry into force and ratification
As of 15 December 2024, CPTPP is in force between the UK and:
- Brunei
- Chile
- Japan
- Malaysia
- New Zealand
- Peru
- Singapore
- Vietnam
This means that the UK can access CPTPP provisions with said countries.
On 24 December 2024, CPTPP will enter into force between the UK and Australia; this means that the UK will be able to access CPTPP provisions with Australia from and including 24 December 2024.
The following countries have not yet ratified the terms of the UK’s accession:
Canada and Mexico.
This means that the UK cannot yet access CPTPP provisions with those countries.
This guidance will be updated following each of the remaining countries’ ratification of the terms of the UK’s accession to CPTPP and will include when CPTPP will enter in force between the UK and the relevant remaining country.
Paperless trading
Paperless trading refers to the conduct of trade activities using electronic rather than paper documents. This reduces administrative costs and improves efficiency of processes, benefiting UK businesses across all sectors.
The UK and CPTPP countries are committed to facilitating the flow of trade activities using electronic trade documents.
CPTPP countries have committed to making trade administration documents available in electronic form and to accept electronic versions of those documents. This refers to documents which are required in connection with the import or export of a good and must be presented to customs authorities.
Beyond CPTPP, the UK also enables commercial trade documents that use English law to be accepted in electronic form. This includes documents such as bills of lading, promissory notes, and bills of exchange. This was enabled by the Electronic Trade Document Act.
This complements the commitments made on paperless trading related to trade administration documents required by the UK government or other CPTPP countries as part of the import-export process. Find more information about the UK’s Electronic Trade Documents Act.
Different countries are at different stages of legislating for paperless trading and trade digitalisation. The United Nations Economic and Social Commission for Asia and the Pacific has created an interactive Model Law on Electronic Records (MLETR) tracker where you can view different countries’ progress.
If you are importing from Japan, you can use the Trade Tariff Look up tool on GOV.UK to find the current list of goods and duty rates. There is also a step-by-step guide on how to import on GOV.UK.
For more information on tariffs and moving goods through customs, please visit our Japan tariffs and customs explainer.
Opportunities for digital trading
Electronic authentication, electronic contracts, and electronic signatures
Electronic signatures and electronic authentication increase trust in e-commerce by helping to verify that transactions, and the people behind them, are genuine. Strengthening the legal validity of electronic signatures provides greater confidence that transactions can be concluded through electronic means.
By using electronic signatures and/or electronic authentication, you can complete transactions in a matter of minutes regardless of where your counterpart is, reducing costs and simplifying processes.
CPTPP ensures that electronic signatures are considered valid and individuals and businesses can confidently use them.
However, CPTPP countries might impose specific criteria regarding electronic signatures, including some circumstances where electronic signatures are not accepted. You should check local regulations for more information.
Our agreements with Japan and Singapore also ensure that electronic contracts are legally valid and cannot be considered invalid just because they are in electronic form.
However, Japan and Singapore might impose specific criteria regarding the use of electronic contracts, including some circumstances where they cannot be used. You should check local regulations for more information.
You have the freedom to determine the best way of authenticating your transaction. However, for some transaction categories, there can be specific requirements.
Data for business purposes can flow freely between the UK and Japan. Provided high personal data protection standards are upheld, businesses may collect, process and transfer data between the 2 countries with minimal red tape. For example, data on monitoring energy production in Japan can be transferred to the UK for analysis.
Both countries have agreed against unjustified data localisation, allowing UK and Japanese businesses to store their data in either country. This prevents difficulties in arranging for local data hosting and saves costs on buying local storage.
The UK and Japan honour the Trade-Related Aspects of the Intellectual Property Rights (TRIPS) legal framework, developed by the World Trade Organization (WTO). This aims to promote innovation and creativity in many sectors including energy.
Further information can be found in our CPTPP digital guide.
Procurement
Government procurement opportunities allow private UK businesses to sell goods or services to foreign governments and public bodies at the central and local level, including numerous opportunities in the energy sector.
The UK-Japan agreement and CPTPP allow businesses greater access to Japanese government contracts. UK businesses will be treated the same as Japanese businesses when biding for government contracts. This covers public procurement contracts in Japan's Local Administrative Agencies and Core Cities.
The Japanese External Trade Organisation (JETRO) provides a list of national government and local government procurement notices. More information on government procurement in Japan can be found on the JETRO website.
Japanese organisations looking to procure goods and services include the:
- Japanese New Energy and Industrial Technology Development Organisation
- Japanese Ministry of Education, Culture, Sports, Science and Technology Japan Atomic Energy Agency
Visit our Procurement in Japan guide for more information, including where to find the full range of participating entities.
In 2020 the Japanese Government announced a series of offshore wind projects to be auctioned. As of 2020, auctions were planned for 4 offshore wind sites, with the Japan Wind Power Association claiming Designated zones have specific guidelines for public tender processes. Examples from previous bidding processes can be found on the Japanese Ministry of Economy, Trade and Industry’s website.
Services
UK businesses providing services in Japan will be treated on a level playing field to Japanese businesses (for sectors that are within scope), meaning British businesses will operate under the same rules of Japanese competitors.
UK businesses are not required to have a business presence, such as a subsidiary or branch office, in Japan to provide services. This would allow, for example, a UK business providing consultancy services on an energy project in Japan to provide their service from the UK, without being excluded for being UK-based. Please check specific exclusions in the agreement text.
The UK and Japan are encouraged to recognise one another’s professional qualifications where areas of mutual interest are identified. While decisions on recognition are for the Japanese professional regulator to make, this could allow UK businesses greater access to the Japanese market in areas such as engineering.
Easier business travel
Business mobility provisions in FTAs support the temporary movement of professionals to deliver services, negotiate the sale of goods, and invest in businesses in person.
The UK’s Free Trade Agreements help provide greater certainty and access for the temporary movement of highly skilled professionals between countries. These benefits give businesspeople more options and flexibility for business travel, as well as often allowing them longer periods of stay in other countries to carry out business activities.
By way of example, under CPTPP, a lecturer employed by a UK University being transferred to a branch in Mexico can now stay for up to 4 years accompanied by their spouse.
For further information on the provisions in the FTAs for working in Japan, please see our Temporary Entry guide. Entry to Japan is subject to applicants meeting the relevant immigration requirements set out by Japan. For full details on visa requirements and applications, please visit the website of the Embassy of Japan in the UK.
Product regulation
Products sold in Japan must meet Japanese product regulation requirements, regardless of whether they are exported to Japan under preferential tariff rates or not. While products will normally need to be shipped to Japan to undergo testing, UK based conformity assessment bodies are eligible to apply to conduct conformity assessments against Japanese regulations. Having testing conducted in the UK may save businesses time and money, by avoiding additional transportation costs.
UK manufacturers of energy products may be able to have their products evaluated against Japanese regulations in the UK in the future, under the shared commitments under CPTPP. UK conformity assessment bodies can apply for accreditation from the relevant accreditation body regulation such as Japan Accreditation Board or International Accreditation Japan, to conduct conformity assessments in the UK against Japanese regulations.
For further information, please see our Product Regulation and Testing guide.
Investment
UK and Japanese investors benefit from increased transparency and simplification of investment administration.
The UK has had huge success in attracting Foreign Direct Investment in the offshore wind sector, contributing to the delivery of our world-leading ambitions, and securing our energy supply. Projects with the Japan Atomic Energy Agency to accelerate the design of high temperature gas reactors and the Japanese Government to detect and process radioactive waste are already benefiting from UK investment.
A more detailed explanation on the Investment provisions and how it can help businesses can be found in our investment guide.
Department for Business and Trade support
The Department for Business and Trade (DBT) helps businesses export, drives inward and outward investment, negotiates market access and trade agreements, and champions free trade. Helpful links, tools and services available from DBT and wider government include:
Export Support Service (ESS) team
Get support on how to do business abroad. You may also be eligible for 1-2-1 support from a local International Trade Adviser. Businesses in Wales can also access support from Business Wales.
Export Support Service – International Markets (ESS-IM)
DBT's overseas in-market export support service for SMEs with high-export potential. Our International Market Advisers provide tailored support and market introduction information to new and current UK exporters looking to enter or expand into new markets. The service may be accessed globally with International Markets teams in South Asia, China, the Middle East, Africa, Eastern Europe, North America and Latin America.
Sign up to access free training on how to grow your international sales.
Information on finance and insurance for UK exports.
Trade and investment factsheets
The latest statistics on trade and investment between the UK and individual overseas partners.
Overseas business risk profiles
Information for UK businesses on political, economic and security risks when trading overseas.
Advice and warnings about travel abroad, including entry requirements, safety and security, health risks and legal differences.
Check or report a trade barrier
If you encounter an issue when exporting to any country – report the issue and UK government officials will be able to assess the issue and consider the options we have open to addressing it as appropriate
Search for your specific product to find applicable tariffs for each market, explore rules of origin and step-by-step help on customs procedures
Check import duties and allows you to check the status of available tariff rate quotas
Useful resources
You can find more information about export opportunities, business culture and any existing trade barriers on our Japan market guide.
Prior to export, you must be aware of local regulations and import conditions in Japan that apply to your goods or services. This can include tax considerations, labour laws, intellectual property rules, labelling and packaging regulations, among others.
To seek further information related to local regulations, business culture, or to find a local lawyer, translator, importer or distributor, you can use the following contacts:
- DBT’s Export Support Service International Markets team
- get in touch with DBT at the local British Embassy
- get in touch with the British Chamber of Commerce in Japan
To see information on political, economic and security risks when trading with Japan, please see: