Japan aims to develop a next-generation passenger aircraft around 2035 and establish a domestic industry by drawing from the lessons learned from the failure of a Mitsubishi Heavy Industries Ltd.-led project to launch the country's first passenger jet, the government said Wednesday.

The plan was outlined in the government's aircraft industry strategy, which was endorsed the same day. The strategy aims to mobilize a combined 5 trillion yen ($33 billion) in public and private investment over the next 10 years toward decarbonizing the whole sector by 2050.

The new aircraft is expected to be fueled by hydrogen, among other options, but not traditional jet oil, as the growing push for decarbonized transport options drives innovation. In recent years, global airlines have started using sustainable aviation fuel, or SAF, made from materials such as waste food and plants.

The aircraft industry is expected to be a growth driver for Japan, with a homegrown aircraft benefitting a slew of domestic component suppliers, according to officials of the Ministry of Economy, Trade and Industry.

The latest move came after Mitsubishi Heavy pulled the plug on its project to roll out Japan's first homegrown passenger jet, SpaceJet, last year, citing a lack of know-how and mounting costs.

The development of the SpaceJet, formerly known as the Mitsubishi Regional Jet, began in 2008 with the help of 50 billion yen in financial aid from the industry ministry, but the delivery schedule was postponed six times before coronavirus pandemic disruptions dealt the final blow to the project.

Mitsubishi Heavy made military aircraft, including the Zero fighter, during World War II.

Industry experts say that the company's strategy to stick to in-house development rather than collaborating with outside talent was partly responsible for the failure, which eventually cost around 1 trillion yen.

The new aircraft development project is likely to involve multiple companies instead of a single firm, the government strategy indicated.

"It is our mission to take full advantage of know-how and experiences (gained from the regional jet project)," said Kazuchika Iwata, a senior vice minister of the industry ministry, who attended the panel meeting that drew up the strategy.

The panel cited a combination of factors that led to the failure of the regional jet project, including uncertainty surrounding the market environment and insufficient government engagement in the process.

However, the panel also said that the foundation for developing new aircraft has been nearly laid, along with an accumulation of talent and know-how.

The development of the new plane is expected to leverage Japan's technologies and experiences in areas such as aircraft bodies, engines and equipment, potentially leading to the establishment of final assembly plants in the country.

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