The second application round for Japan's 2026 subsidy for hard-to-abate industries opened on 22 October and closes at noon on 27 November. It covers "Project II", aimed at chemicals, paper and pulp, cement and similar sectors. The ceiling is one-third of eligible costs, rising to one-half for structural conversion. The programme's own documents say those are maximum rates, not entitlements.
What the money covers
Project II supports capital spending on three kinds of conversion: fuel conversion, manufacturing process conversion and structural conversion. Eligible costs are design, building acquisition, equipment and system development. The guidelines exclude land and office buildings, removal of existing assets, and equipment renewals that would happen without a conversion.
Fuel conversion has hard thresholds. In-house generating plant must reach at least 30,000 kW after completion, and an industrial furnace qualifies only if the grant sought is at least ¥4bn. Target fuels include LNG, waste, biomass and low-carbon hydrogen or ammonia. The project must be expected to cut direct (Scope 1) emissions by 50% or more around 2035.
Process conversion has capacity floors. Chemical recycling and CCU need 40,000 tonnes a year, and biochemicals 30,000 tonnes. Lifecycle CO2 cuts must reach 50% or more.
Who can apply
Applicants must be companies registered in Japan with a project site there, and must not be under a METI subsidy or procurement suspension. They must set a 2030 Scope 1 and Scope 2 reduction target and report third-party-verified results each year, or belong to the GX League. The guidelines waive that requirement if the project is not carried out in or before the 2025 fiscal year, advance-start period included. From the 2026 fiscal year applicants must also join the GX Future League and report emissions, although the guidelines treat applicants who already carry out the 2030-target and verified-reporting measures, including buying eligible credits or publishing the reasons for any missed target, as meeting that requirement. Firms with 2022 CO2 emissions under 200,000 tonnes, and SMEs, may substitute other emissions-cutting measures.
The guidelines also say the investment decision should not, in principle, have been publicly announced before the adoption decision. Filing is electronic only through J-Grants, which requires a GビズID Prime login. Post, hand delivery and email are not accepted.
Timetable and advance start
Screening starts on 30 November, with adopted projects due to be named around late January 2027 and grant applications due in February. Projects must finish by 31 January 2031. Payment is normally made after completion, once costs are confirmed, and the final amount can fall short of the approved sum.
Spending before a grant decision is normally ineligible. A separate advance-start notification, filed in J-Grants in the same window, lets applicants who show urgency and necessity start earlier. Eligible spending then runs only from the advance-start date the acceptance notice recognises, which falls on or after the date the notice is issued. Acceptance does not promise adoption, and a rejected bid gets no grant.
The documents give no award total for this round.