SAPPORO - Sapporo has long attracted visitors to Japan craving access to Hokkaido’s outdoor scene, winter sports, and local cuisine. Now the city hopes to boost interest from investors and entrepreneurs as it drives a green transformation (GX) across the green energy-rich region.
 
Japan’s fifth most populous city is unlocking the country’s greatest potential source of renewable energy. Sapporo and Hokkaido lead the country in renewable energy potential from wind power, solar, and small-to-medium hydropower.

Over the ten years starting from 2023, the region expects to see around 40 trillion yen ($253 billion) in public-private investment in green energy and related industries. This is more than a quarter of the 150 trillion yen targeted by the Japanese government in its drive to achieve net-zero greenhouse gas emissions by 2050.

“In other words, I believe that Japan cannot achieve carbon neutrality without the success of Hokkaido’s renewable energy project,” Kaori Nishiyama, Sapporo’s director general for green transformation promotion, told reporters in November. 

And Sapporo is taking the lead in accelerating Hokkaido’s, if not Japan’s, green transformation. 

Under the consortium Team Sapporo-Hokkaido (TSH), the city is working with companies and organizations to develop a regional GX ecosystem.  

Hokkaido’s abundant renewable energy, including offshore wind power, will drive key industries identified by TSH, including next-generation semiconductor manufacturing and data centers, while surplus power will be converted into hydrogen and used to generate power and heat.

The ecosystem is already taking shape. Hokkaido’s first large-scale commercial hydrogen station went into operation in April last year, on municipal land in Sapporo’s Chuo district.

Photo taken on Nov. 26, 2025, shows Air Water Hydrogen Station Sapporo Odori Higashi.

Air Water Hydrogen Station Sapporo Odori Higashi is capable of refueling large carbon-free fuel cell electric vehicles (FCVs) including buses and trucks, as well as private vehicles. 

The station marks the first phase in the city’s development of a model district promoting the use of hydrogen as a stable, carbon-free source of energy as it seeks to develop a disaster-resilient and environmentally-friendly city.

Station operator Air Water Inc. said it has built a station which will remain operable even in Hokkaido’s tough winter conditions. Two hydrogen supply and filling lines help the station to remain in operation during maintenance and repair. 

Plans for Air Water Hydrogen Station Sapporo Odori Higashi are not limited to powering vehicles. Hydrogen from the station will also be used to power a nearby visitor and community exchange center which will house a cafe and accommodation facility, due for completion in fiscal 2027.  

Nishiyama believes that one of the region’s strengths as a leader of green transformation is the potential for offtake agreements, a key factor in the success of renewable energy. Sapporo expects data centers, in particular, to become key energy consumers driven by the rapid spread of artificial intelligence (AI).

Around 15 kilometers north of Sapporo, Zero Emission Data Center Ishikari is among the cluster of data centers developing in the Ishikari Bay New Port area, an industrial zone fronting the Sea of Japan.

Photo shows Zero Emission Data Center Ishikari, in the city of Ishikari, Hokkaido. (Photo courtesy of KYOCERA Communication Systems Co., Ltd.)

When it opened in October 2024, ZED Ishikari was the first data center in Japan to be operated 24/7 with carbon-free energy. 

Operator Kyocera Communication Systems Co. (KCCS), uses power from the nearby Ishikari Bay New Port Offshore Wind Farm and from its own solar PV. The center’s energy demands are matched with carbon-free sources on an hourly basis, rather than conventional balancing which is calculated annually.

Photo shows wind turbines of the Ishikari Bay New Port Offshore Wind Farm, in Ishikari, Hokkaido, on Nov. 27, 2025. (Photo courtesy of Sapporo City)

KCCS said that as well as being close to a renewable energy supply, Hokkaido’s cooler temperatures, low disaster risk, and proximity to Sapporo were also factors in choosing Ishikari as the location for its data center.

“Being close to Sapporo gives us an advantage in terms of maintenance, and securing IT engineers and equipment necessary to run a reliable data center,” Tetsu Ogata, a department manager at the data center, said.

As the region’s GX ecosystem takes shape, Sapporo is establishing the financial functions it says are required to support it, positioning itself as the region’s financial hub. 

In November, the city announced the outline of a public-private investment fund aimed at raising 10 billion yen to finance GX projects across Hokkaido. Sapporo pledged 500 million yen to the fund, which is scheduled to launch in February, with two regional banks joining as founding investors. Asset management company SPARX Group Co. will manage the fund.

Sapporo Mayor Katsuhiro Akimoto was present for the announcement during the Nikkei Global GX/Finance Conference which the city co-hosted on November 25. 

“Creating a fund that is closely connected with the region represents a significant step in our broader efforts to strengthen financing around GX,” he said.

Sapporo Mayor Katsuhiro Akimoto (2nd from R) poses for a photo during the Nikkei Global GX/Finance Conference in Sapporo on Nov. 25, 2025.

Local initiatives like the fund are supported by Sapporo and Hokkaido’s designation as one of Japan’s four Special Zones for Financial and Asset Management Businesses. 

Under the special zone framework, the city is implementing regulatory reforms to make it one of the easiest places to do business in Japan. 

In April last year, Sapporo and Hokkaido introduced the GX Promotional Tax Incentive. Under the special tax exemption system GX-related businesses utilizing the region’s renewable energy potential, and asset management and fintech businesses attracting investment in GX, could be fully exempt from city taxes for up to 10 years.

Sapporo is also paving the way for overseas companies to take advantage of the investment and business opportunities it expects to be created during its green transformation.

“Green transformation is not just about producing green electricity. It involves storing it, transporting it, and using it across various industries. This will support growth across numerous sectors,” Takeo Ohashi, chief of the city’s green transformation investment promotion, said.

The sentiment reflects Japan's wider approach to green transformation which aims to achieve decarbonization while strengthening industrial competitiveness and growing the economy.

“Decarbonization, competitiveness, and economic growth are not in a trade-off relationship -- they can be achieved simultaneously. This is a key aspect of Japan’s green transformation,” Hideki Takada, director of the government’s GX Acceleration Agency, told reporters on the fringes of the Nikkei Global GX/Finance Conference. 

To support GX-related investment and business interest from overseas, Sapporo established the Sapporo Transnational Expansion and Partnership (STEP) in October 2024.

STEP offers a one-stop, free-of-charge service guiding foreign companies through the local business landscape, with support in everything from networking to administrative, tax and legal procedures. 

Photo taken at the facility of Sapporo Transnational Expansion and Partnership (STEP) in Sapporo on Nov. 27, 2025.

Representatives from Singapore-based AI Robotics, which specializes in advanced autonomous driving technology, were visiting the STEP office in the city’s administrative district during a visit to Hokkaido in November. 

In exploring opportunities to deploy its technology in Hokkaido’s agricultural sector, the company said it was surprised to find an organization like STEP, which it found to be especially helpful in executing plans, not just helping with preparation.  

“We don’t really like to have meetings for just greetings. We want to make something happen out of them,” Seiko Miura, STEP’s general manager, said.

To provide objective information and support decision making among potential domestic and international investors in the region’s green transformation, Sapporo and Hokkaido took the lead in developing a green finance framework.

The Team Sapporo-Hokkaido Green Finance Framework, launched in October, evaluates GX projects according to their contribution to decarbonization and the degree to which they coexist with local communities. TSH says that the framework helps funders clarify investment decisions.

Climate Bonds Initiative, an international non-governmental organization based in the U.K., assisted in developing the framework.

Climate Bonds CEO Sean Kidney said that Hokkaido has the opportunity to massively scale up renewable energy, creating local jobs and improving energy security. “Team Sapporo-Hokkaido Green Finance Framework provides clear and transparent guidance on how investment will contribute to that green future,” he said.