The government’s energy policy is in the midst of a sea change, as it shifts away from nuclear-generated power to a coal-based industry.

The five years since the triple meltdowns at Fukushima Daiichi have seen a major shift in Japanese energy policy. While some had hoped that shift would be one toward a brave new world of safe, clean, renewable energy, the reality has been an inching back to nuclear and a rush in the direction of old king coal.

Though international pressure has recently grown for a move away from coal due to its high carbon emissions, the reality is that it is still responsible for generating 40 percent of electricity globally. Coal’s share of total energy supply is just under 30 percent, though being the most carbon intensive fossil fuel means it is responsible for 44 percent of CO2 emissions. Coal mining also leads to thousands of deaths worldwide each year through accidents and lung disease, with tens of thousands more attributed to its burning for heat and electricity generation.

While the U.K. has announced it will eliminate coal from power generation by 2025 and the U.S. has plans to drastically curtail it, Japan is building dozens of new coal-fired power stations and investing heavily in overseas mining and generation projects. The deregulation of the domestic electricity industry that is coming into effect in April will increase competition and looks set to give coal a further boost.

With most of Japan’s nuclear reactors likely to remain offline for years to come, the government has made a deliberate policy shift in favor of coal, which according to environmental groups means it will fail to meet its targets for carbon emission reductions. The government and major power utilities point to the efficiency and relatively lower emissions of new Japanese coal technology, which they are also promoting for export, and claim there is no alternative given the nuclear-generation shortfall.

On Feb. 9, in a move that drew fire from opponents, Japan’s Ministry of the Environment (MOE) approved the construction of new coalfired power plants on the condition that emission standards are met. The Ministry of Economy, Trade and Industry (METI) and the Ministry of the Environment, which will set standards and assess emissions, said they will require stricter controls, but it is clearly a huge policy U-turn.

The environment ministry had previously rejected applications for a series of coal-fired plants. The Basic Energy Plan announced last summer called for a cut in the amount of coal-generated energy from 30.3 percent to 26 percent by 2030. The plan also called for an expansion of power from renewables to around 23 percent, with a similar percentage to come from nuclear; power from Liquid Natural Gas (LNG) was meant to fall from 43.2 percent to 27. Now, however, with both the restart of reactors and the development of renewables moving slowly, an upwards revision of coal’s share seems unavoidable.

Last year saw record imports of more than 114 million tons of coal, up 4.8 percent from 2014 and almost double the amount recorded at the turn of the century. Meanwhile, LNG imports dropped 3.9 percent to 85 million tons, the first decline since the disaster at the Fukushima Daiichi Nuclear Plant mothballed the nation’s nuclear reactors.

According to Japanese NGO Kiko Network, there are now 47 new coal-fired plants at various stages of planning and construction across the country, with more likely in the near future. This is ushering in “the beginning of a new era for coal power plants,” says Kiko’s international director Kimiko Hirata. Contrary to the ministries’ statements about raising emission standards, Hirata maintains that “environmental assessments have been weakened” and that incentives have been created to stimulate the building of new coal plants, in what she calls “a clear reversal of government policy.”

Current state-of-the-art Japanese coal power plants produce around 800 grams of CO2 emissions per kilowatt hour (kWh) of electricity generated an industry standard measurement says Hirata. The newer IGCC plants, which gasify coal, cut that to around 700gm/kWh, but that is still “around double that of LNG plants,” according to Hirata. “Using coal is incompatible with the long-term goals of the recent Paris climate agreement, and these plants will be in operation for 40 years.”

Along with most other commodities, the price of coal has collapsed, almost halving over the last five years, increasing its appeal to the utilities and the government. “It is true that the drop in fuel prices is one of the reasons why we are making a profit recently,” says a spokesperson from Tepco, which currently operates four coal-fired generators and is building more. “While all of the nuclear power plants are shut down, coal power plants are in operation at full capacity except during inspections or repair because they are more fuel-efficient than natural gas-fired or oil-fired power plants.”

Environmental campaigners point out that the price of lower-emission LNG has fallen even more dramatically than coal.

Aside from straightforward price considerations, Japanese companies are deeply involved in the coal industry overseas, through both mining joint ventures and supplying equipment and technology, programs that are often backed by government loans. “There are long-standing supply relationships with overseas projects and the trading houses are heavily invested in coal,” says Tom O’Sullivan, a Tokyo based energy consultant at Mathyos. “They probably won’t get off that unless they’re pushed.”

Japan invested around $25 billion in overseas coal plants, technology and mining between 2007 and 2014, according to a report issued jointly last year by The Natural Resources Defense Council, Oil Change International and the WWF. That accounts for around a quarter of international funding in the coal power sector and makes Japan by far the biggest overseas supporter at a time when other countries are continuing to disinvest.

Japanese policy is aimed at both securing supply for the domestic market and selling advanced coal technology overseas. “They are targeting developing countries Vietnam, Myanmar, Laos and Cambodia to export clean coal tech. Abenomics is predicated on exports, so this is one area of opportunity,” says O’Sullivan.

Last November, OECD countries reached agreement to severely restrict export financing of coal power plants, despite objections from Japan. However, the restrictions only cover around 10 percent of Japan-funded projects, according to Yuki Tanabe, researcher at the Japan Center for a Sustainable Environment and Society (JACSES). “About 90 percent of Japan’s financing is in joint-venture projects, which are not affected. That’s why the government went along with the deal,” says Tanabe.

Most of the funding is done through the Japan Bank for International Cooperation (JBIC) in the form of loans, risk guarantees and insurance, which are effectively public subsidies for coal, suggests Tanabe.

JACSES has an ongoing dialogue on the issue with the Ministry of Finance, but the official line is that rather than facilitating the use of fossil fuels, Japan is helping reduce emissions. “Because Japanese coal technology is more efficient than Chinese, the government’s position is that it’s being proenvironment by exporting it,” says Tanabe.

JBIC is also developing plans to support the export of Japanese nuclear-power technology, according to Tanabe, after a hiatus following the 2011 Fukushima Daiichi disaster. In December, Shinzo Abe and Indian Prime Minister Narendra Modi signed a memorandum on cooperation between the two Asian nations on nuclear energy. Environmental organizations, including JACSES and Kiko Network, oppose the development of nuclear power plants, whether in Japan or abroad, arguing the risks of accidents and issues with disposal of spent fuel outweigh the benefit of close-to-zero emission electricity generation.

The target of 22 percent of domestic electricity generated via nuclear by 2030 would require around 20 plants in Japan coming back online, according to O’Sullivan of Mathyos. He predicts that while there will be no new reactors built, the present reactors’ lives will be extended, despite safety concerns.

Tepco is currently working toward the restart of Kashiwazaki-Kariwa, the world’s largest nuclear-power station, its seven reactors being the company’s only remaining operable units. “For the restart, we will accurately respond to the review [by regulators] with safety as a top priority, while proceeding by putting our best efforts into sincere explanations about safety concerns from local residents,” said the Tepco spokesperson.

This April will see a shake-up of Japan’s ¥7.5 trillion electricity retail market with similar plans for the gas market scheduled for next year designed to end the monopoly of the 10 regional utilities. Tepco expects “tougher competition in the Kanto region . . . the most attractive area for electricity suppliers.” Globally, long-term results have varied for deregulation, pushing up prices in some countries, reducing it in others. In the short term though, fiercer price competition looks inevitable. Approximately 200 companies and entities (including local municipalities) have applied for licenses related to generation and distribution, according to O’Sullivan.

“Because Japanese coal technology is efficient, the government’s position is that it’s being pro-environment.”

Surveys of Japanese customers have found they will be overwhelmingly focused on the price of electricity when choosing new suppliers, with little interest in how it is generated. Kiko Network’s Hirata notes that “there are no mandatory measures to make new companies disclose their power source” and says the “political signal is to reduce prices.”

So, in spite of public concerns over restarting reactors and climate change, consumer choices after deregulation look set to increase generation from nuclear and coal-fired plants. The falling population and workforce, along with the ongoing offshoring of manufacturing, mean electricity demand in Japan is likely to continue falling. Power generation in 2015 fell to 866.26 billion kilowatt hours, the fifth straight year of decline and lowest level since 1998. However, a shrinking market full of new players will likely be even more competitive on price, driving up demand for coal-fired power and increasing pressure to restart idled nuclear reactors.

Kiko Network’s solution calls for a mix of energy efficiency, increasing the share of renewables and a shift from coal to LNG. The Federation of Electric Power Companies of Japan (FEPC) has a target of a 35 percent cut in the nation’s CO2 emissions by 2030, though many of its member companies are involved in building new coal-fired plants. The FEPC didn’t respond to a request for comment on how it aims to achieve this.

Gavin Blair covers Japanese business, society and culture for publications in America, Asia and Europe.