Japanese energy company Eneos Holdings will shift investment from hydrogen and sustainable aviation fuel (SAF) to LNG, Reuters reported on May 12.

As part of its new three-year business plan that will run to March 2028, Eneos will allocate up to JPY1 trillion ($6.7bn) for strategic investments including LNG, the company’s CEO Tomohide Miyata announced at a news conference.

“We plan to reinforce and expand our LNG operations as demand is expected to grow through around 2040,” Miyata told reporters.

Miyata also stated that JPY310bn ($2.1bn) will be set aside for strategic spending for low carbon energy, as well as JPY250bn ($1.68bn) for decarbonised energy.

Additionally, Japan’s largest oil refiner will also commit JPY820bn ($5.5bn) to maintain its refineries and will set JPY180bn ($1.21bn) aside for strategic spending in oil and chemicals.

But while Eneos ramps up its spending on low-carbon fuels, it is coming at the cost of hydrogen and SAF. In the company’s new plan, the target of supplying up to 4mn tonnes of hydrogen by 2040 has been scrapped.

While deadlines to reach climate targets are getting closer, momentum for the energy transition has hit a speed bump amid increasing concerns over energy security in the midst of increasing geopolitical tensions.  

With increased uncertainty also surrounding trade relations following US President Donald Trump’s announcement of increased tariffs on trade partners, particularly countries holding a trade surplus with the US, stable and affordable energy, most notably oil, has seen an uptick in popularity.

Miyata also highlighted that decarbonisation technologies remain costly. Capital has poured into emerging technologies such as hydrogen, ammonia and SAF; however, these “green gases” have failed to see major advancements in reducing their cost.

As pressure mounts on Japan to increase its supply of US LNG, Miyata acknowledged that Eneos could potentially buy a stake in Alaska LNG, if the price is right. Officials from the project toured Asia in March, including a stop in Japan, as they sought to drum up support for the long-stalled $44bn project.

The US’s energy security council will hold a conference in June in Alaska, where it hopes to secure commitments from Asian partners for the LNG export terminal, which would boast a production capacity of up to 20mn tonnes per year (tpy).