Japan is the world’s third-largest economy and has a strong industrial base. The transformation of Japanese industry entails similar challenges to those encountered in Germany. Limited domestic energy and raw materials make it necessary to consider import options when it comes to the transformation of energy-intensive production processes. For example, Japan’s strong steel industry faces the challenge of cost-effectively obtaining the necessary quantities of hydrogen required for the dominant transition strategy of direct iron reduction with H2. The transformation of this sector therefore requires integrated policy concepts, which include strengthened recycling and imports of hydrogen and intermediate products. Such policy concepts also include the development of lead markets and instruments to mitigate higher production costs as industry transforms to climate-neutral production. Together with our Japanese partner REI, Agora Industry develops policy analyses and recommendations on the transformation of Japanese industrial sectors to climate neutrality.