The Japanese government will consider financial aid of 20 trillion yen ($156 billion) to promote investment in the green energy sector to meet its goal of carbon neutrality by 2050, Prime Minister Fumio Kishida said Thursday.

The government will look into the possible issuance of so-called transition bonds, which are typically used to fund environment-related projects, and will set up a new panel under the Cabinet Office in summer to deepen discussions over how to realize a decarbonized society, Kishida said at a meeting with energy policy experts.

Prime Minister Fumio Kishida (2nd from L) speaks at a meeting of energy-related experts held at the premier's office in Tokyo on May 19, 2022. (Kyodo)

"We will swiftly secure the funds and show our commitment to attract long-term investment from the private sector," the premier said.

The government last October approved an energy plan to achieve a goal of net zero CO2 emissions by 2050, seeking to use more renewables and reduce thermal power generation.

Efforts on decarbonization are becoming increasingly vital as Japan, like many other countries, is looking to reduce reliance on coal and oil from Russia as part of sanctions over its invasion of Ukraine.

Kishida's remarks come after the industry ministry estimated in an interim report last week that investment of 150 trillion yen will be necessary from the public and private sectors over the next decade to attain the goal.

The report by the Ministry of Economy, Trade and Industry includes plans to promote the use of hydrogen and ammonia as green energy sources. Following the report, the ruling Liberal Democratic Party called for financial aid of 20 trillion yen from the government.

The energy plan is one of Kishida's core economic policies to boost growth by sparking investment in new technology and facilities necessary for green transformation.