Japan imports most of the energy it consumes. Methane released during the production, processing, and transport of fossil fuels consumed in Japan also adds to global atmospheric concentrations. Methane management in Japan therefore cannot be limited to asking how much is emitted within its borders; it must also account for the methane emissions driven by Japan’s energy consumption across global supply chains.

This analysis estimates two dimensions of the economic burden associated with methane. First, using Japan’s 2024 LNG import price as a benchmark, it estimates the fuel value of methane released during fossil fuel production. As the principal component of natural gas, methane emitted to the atmosphere represents energy that could otherwise have been put to productive use. This is an estimate of the energy value and economic scale of wasted methane—not a claim about actual trading losses or fully recoverable revenue. Second, the analysis estimates the heatwave-related climate damage costs that methane emissions impose on Japanese society. Together, the two costs amount to approximately USD 3.29 billion (JPY 526.3 billion) per year.

To reduce this wasted methane, Japanese importers of oil, gas, and coal should first disclose methane emissions arising at the production stage. Companies and the government should then establish targets and standards for managing methane across entire supply chains. Finally, fossil fuel importers should require producers to implement methane-abatement measures. Japan has already helped launch the Coalition for LNG Emission Abatement toward Net-zero (CLEAN) Initiative to manage methane emissions associated with LNG supply. The next step is to translate this approach into procurement standards and corporate disclosure, and to extend it beyond LNG to imported crude oil and coal.

As summers grow hotter, Japanese companies and the government have an opportunity to demonstrate broader climate leadership.