Japan flare gas recovery system (FGRS) market and its future scope look attractive as the country pushes for decarburization of industrial operations and enhances energy efficiency. Japan is investing in clean technologies that lower emissions and leverage resources as part of its decades-long commitment to environmental stewardship and its target of achieving carbon neutrality by 2050.
Flare gas recovery systems are progressively being deployed, both in large and mid-sized industrial complexes, to recapture and reapply excess gases, which are particularly wasted during refining and petrochemical processing. In 2025, the Japan flare gas recovery system market size was USD 82.1 million and is estimated to reach USD 150.7 million by 2035, at a CARG of 5.6% during the forecast period.
| Metric | Value |
|---|---|
| Industry Size (2025E) | USD 82.1 Million |
| Industry Value (2035F) | USD 150.7 Million |
| CAGR (2025 to 2035) | 5.6% |
The technology, sits comfortably within Japan’s policy emphasis on sustainable infrastructure, energy resilience and minimization of waste. Petrochemicals, oil refining, and synthetic gas production are some of the industries that are adopting FGRS to not only meet compliance under Japan’s Air Pollution Control Act but also reduce their operating costs through gas reutilization.
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Hokkaido, where awareness of energy self-sufficiency and sustainable resource management is rising, has had a growing interest in flare gas recovery systems from sites for the production of biomass and synthetic fuels. Sapporo and Asahikawa In Sapporo and Asahikawa, moderate but steady FGRS uptake has been achieved, with both Industrial innovation parks successfully promoting low-emiasis1.
Tohoku regions, particularly areas undergoing regeneration since the 2011 disaster, this has included the adoption of high-tech models of industrial infrastructure designed around the principle of sustainability. FGRS is being integrated into combined heat and power (CHP) systems at facilities in Sendai and Fukushima, particularly in municipal waste treatment and chemical processing. Government-backed clean energy programs are a key driver of adoption.
Kantō, which is home to Japan is most industrially and commercially dense area, including Tokyo, Yokohama, and Kawasaki, has the biggest portion of the country’s flare gas recovery system market. Given that the region is characterized by large petrochemical plants, energy terminals, and clusters of manufacturing facilities, it is a hot spot for efforts to reduce emissions. Faced with irrevocably high land and energy costs, companies are turning to FGRS to enhance operational efficiency and corporate sustainability goals.
Chubu, dominant in Nagoya, is the core technology hub for automotive, aerospace and precision manufacturing. In the Ise Bay class area, refineries and processing facilities are increasingly implementing flare gas recovery systems to comply with industrial emission norms by minimizing flaring. FGRS is also employed in the comprehensive ESG improvements of smelters of their supply chain related to the global automotive OEMs.
The Kansai region including the cities of Osaka, Kyoto and Kobe has been focused on building up a diversified industrial base that includes chemicals, electronics and energy production. Some of the earliest flare gas recovery systems using heat integration and gas blending applications are being employed by Osaka’s chemical manufacturers. Smart energy policy and infrastructure modernization in the region support deeper penetration of FGRS technologies.
Chugoku is becoming an important area for chemical and petrochemical processing, Hiroshima and Okayama. FGRS is installed in refining and energy-related activities in ports and coastal industrial zones, with regional sustainability schemes established. These systems are usually deployed with emission-monitoring and leak-detection technologies to comply with environmental standards.
Shikoku is host to selected chemical plants and energy facilities that are testing sustainable technologies. We are particularly examining cost-effective FGRS solutions (with research institutions in Takamatsu and Matsuyama) where the SMEs in the region are focused on. Adoption remains limited but is expanding through technology transfer and government support.
Challenges
Limited Domestic Oil and Gas Production Limit Offshore FGR Demand
Japan has very little domestic production of oil and natural gas, with only a limited number of production facilities operating in Niigata and Hokkaido. Thus, Japan does not possess the traditional flare gas volumes upstream of the oil-rich countries. The limited direct demand for conventional FGR systems due to a lack of modern flaring from domestic E&P operations also decreases the applicable market size and scale of flare-centric deployments in the energy upstream segments.
Refining Space and Urban Lines Around Sites
Japan’s refining and petrochemical infrastructure (particularly in places like Chiba, Kawasaki, and Yokkaichi) is located in dense industrial clusters around urban centers. Installing large-scale flare gas recovery systems in such space-constraint locations, is an engineering and safety challenge. Strict enforcement of fire safety regulations and zoning requirements in Japan present challenges in the implementation of flare gas recovery systems, where pressure vessels, large-capacity compressors, or vent gas recovery facilities are needed.
Opportunities
Residential and small commercial flaring units in landfills
Japan’s upstream sector is marginal, potential exists to cut flaring at downstream operations, oil refineries, LNG regasification terminals, and petrochemical complexes. These facilities commonly vent or flare excess gas when they start up, shut down or face emergencies. Japan's drive for carbon neutrality by 2050 and efforts to reduce GHGs from combusting facilities will help drive investment in flare minimization technology, such as vapor recovery units (VRUs), closed-loop flaring systems, and flare-to-fuel capture units.
Contribution to Japan’s Hydrogen and Circular Carbon Economy Strategy
Japan is currently a world leader in developing a hydrogen-based energy economy and such flare gas recovery systems could yield methane and/or hydrogen-rich streams suitable for reforming processes. Furthermore, flare gas can be fed into carbon recycling systems, helping meet circular economy goals in chemical manufacturing.
FGR systems will also be rolled out in the pilot carbon capture and utilization (CCU) projects around the industrial zones participating in GX League (Green Transformation) and Zero-Emission Industrial Zones initiatives in Japan.
In the early 2020s, Japan’s FGR market was small and very specialized, and applications were largely limited to refineries (e.g., JX Nippon Oil & Energy) and chemical plants. Gas flaring volumes were modest, and current emissions reduction measures focused on energy efficiency and carbon offsets rather than on-site gas capture. But growing carbon price signals and tighter METI (Ministry of Economy, Trade and Industry) decarburization roadmaps began, to prepare the ground for industrial FGR investments.
Looking forward to 2025 through 2035, Japan’s FGR market is likely to move from numerous, site-specific implementations to functioning as components of an integrated emissions management system in petrochemical clusters. The adoption of modular, high efficiency flare capture systems customized for low flare volumes and intermittent operations will be key. The most robust growth will be in refining, hydrogen, and ammonia-associated infrastructure, spurred on by state-backed green hydrogen goals and circular carbon initiatives.
Market Shifts: A Comparative Analysis 2020 to 2024 vs. 2025 to 2035
| Market Shift | 2020 to 2024 Trends |
|---|---|
| Sectoral Focus | Limited to refining and petrochemicals |
| Technology Deployed | Basic vapor recovery units and closed-loop flare systems |
| Regulatory Landscape | Voluntary GHG reduction via METI targets, ISO certifications |
| Sustainability Alignment | FGR seen as supplementary to energy efficiency |
| Market Size & Scope | Niche and site-specific |
| Digital Integration | Manual flare monitoring and gas analytics |
| End-User Commitment | CSR-driven action by large players (e.g., ENEOS, Mitsubishi Chemical) |
| Carbon Incentives | Indirect, through energy cost savings |
| Market Shift | 2025 to 2035 Projections |
|---|---|
| Sectoral Focus | Expansion into LNG terminals, hydrogen infrastructure, and industrial carbon capture zones |
| Technology Deployed | High-efficiency, AI-integrated flare gas capture units designed for small-scale industrial use |
| Regulatory Landscape | Mandatory industrial GHG caps, digital emissions reporting, and carbon taxation mechanisms |
| Sustainability Alignment | FGR recognized as a core decarburization tool under hydrogen and CCUS integration pathways |
| Market Size & Scope | Gradual expansion across Japan’s 20+ major refining and LNG facilities |
| Digital Integration | Digital twin deployment for gas flow optimization, predictive maintenance, emissions tracking |
| End-User Commitment | Government-mandated emissions reduction across industrial value chains |
| Carbon Incentives | Direct monetization through Japan’s carbon credit system and GX League participation |
As Japan’s political and technological hub, Tokyo is uniquely positioned to catalyze the country’s flare gas recovery ecosystem, both within the nation and as a model for others to emulate, primarily through its policy-making pace-setting, smart-city initiatives, and clean-tech R&D funding. Tokyo itself lacks heavy industry or oil & gas infrastructure, it is a major center for government and corporate R&D that drives innovation in low-emission gas processing gas processing technologies.
Waste methane and volatile gases are being increasingly recovered for reuse by advanced waste-to-energy plants, urban biogas digesters, and hydrogen R&D testbeds, where FGRS solutions are being piloted. With Tokyo doubling down on smart, sustainable infrastructure, the city will remain a Launchpad for scalable innovations in FGRS.
| City | CAGR (2025 to 2035) |
|---|---|
| Tokyo | 5.3% |
Osaka is the center of industry and commerce in western Japan, so the domestic market of FGRS in Japan will revolve around Osaka and its surrounding cities. To meet environmental standards and conserve energy for better efficiency, flare gas recovery systems are being installed in the industrial zones of the city as well as in power plants and waste incinerators.
Osaka’s Bay Area includes an industrial complex of refineries and gas-handling operations starting to retrofit older facilities with modern recovery units to meet Japan’s methane-reduction targets. In the Kansai region, a vanguard in green manufacturing and Digital Process Optimization.
| City | CAGR (2025 to 2035) |
|---|---|
| Osaka | 5.7% |
Kanagawa Prefecture, where the Yokohama-Kawasaki industrial belt is located, is instrumental to Japan’s petrochemical and utility industries. FGRS has been deployed in practice on chemical plants, portside gas terminals, and district heating systems of the region to generate process gases with flaring potential. Industries in Kanagawa are implementing flare gas recovery alongside fuel-switching and renewable energy projects as part of broader carbon capture and reuse (CCU) initiatives.
Considering the prefecture’s robust focus on sustainable coastal industrial zones, aided by grants from local and national government, the steady adoption of recovery systems for economic reuse and emissions compliance is expected to accelerate.
| City | CAGR (2025 to 2035) |
|---|---|
| Kanagawa | 5.8% |
The market for flare gas recovery systems is emerging in Aichi Prefecture, home to Nagoya and the foundation of Japan’s automotive and aerospace manufacturing industries, and in energy-intensive, high-volume industries at large. Increasing adoption of FGRS in industrial parks of the region helps in waste gas recovery in thermal processing, foundries, and component manufacturing, where heat and flammable gases are often released out with flaring.
As the automotive supply chain moves to more sustainable operations, OEMs and parts suppliers have implemented FGRS to align with Toyota’s green manufacturing and lower Scope 1 emissions levels. With Aichi's steadfast commitment to harnessing clean-tech in industrial workflow, this region is poised for compact and modular FGRS units with high growth potential.
| City | CAGR (2025 to 2035) |
|---|---|
| Aichi | 5.9% |
Fukuoka, which is an important city in Kyushu and is developing as a regional leader in circular energy innovation, hydrogen test projects, and urban waste recovery systems The city and its suburbs are putting FGRS units to use at landfills, municipal waste sites and anaerobic digesters, for controlling methane leaks and generating energy from surplus gas.
The proximity of regional ports, and Fukuoka’s Smart Energy City vision further support emerging industrial projects where flare gas recovery increases fuel efficiency and reduces operational emissions. FGRS applications in Fukuoka will cover environmental and economic use cases with active support from local agencies and academia in the next decade.
| City | CAGR (2025 to 2035) |
|---|---|
| Fukuoka | 5.5% |
Between 5 to 10 bar pressure is currently the most commonly deployed flare gas recovery system in Japan, at petrochemical clusters and coastal energy infrastructure. Japanese energy operators handled relatively small amounts of flare gas, primarily in the context of refineries, chemical processing plants and LNG terminals in sectors like Chiba and Yokkaichi.
Thanks to their balance of compression capability and energy recovery, medium pressure systems are the right fit for facilities that want to recover flare gas without the operational baggage that comes with large or very large pressure systems. Their reliability and scalability make them an ideal fit for Japan’s industrial model, where businesses have long prized lean operations and engineering that does not require a lot of space.
The dedicated commitment of the country towards energy transition and adoption of circular economy principles has made the 5 to 10 bar systems one of the crème of the crop in the flare gas recovery landscape. With Japan reproducing its recent trajectory away from coal-type and nuclear power dependency, refineries and gas vegetation are facing growing upward pressure to letter make emissions, reintroduce garbage gases, and farm resource remedy.
Medium pressure systems represent a well-established pathway for redeploying captured flare gas into process heating, on-site power generation or even fed to make hydrogen. This benefit can be enhanced through their potential integration with energy recovery turbines and fuel gas networks in future Japan industrial energy mix.
The segmentation of the Japan Oil-Free Air Compressors market is known as it is a technology provider; on this segment of the envelope, towards providing high-efficiency compressors as well as energy saving control systems for moderate pressure operations. Japanese manufacturers have embraced AI-driven diagnostics, zero-flare startup procedures, and variable frequency drives that retain efficiency at varying gas flow rates.
Such innovative systems and focuses make 5 to 10 bar systems particularly appealing for Japan’s established, high-regulation industrial ecosystem for the long haul. Designed to achieve both decarburization required by government policy as well as ESG target deadlines demanded by customers, these medium-pressure systems are growing in stature as the key plumbing of low-emission, high-efficiency process management.
Japan's penchant for modular flotilla flare gas recovery configurations which facilitated the points of interest of extremely exact engineering next to spatial limitations and operational proficiency-are at play. Japan’s energy and chemical plants often located in densely populated coastal areas can also benefit from compact, factory-assembled systems that require little construction work on site before they are up and running.
Modular systems meet this requirement by offering standard layouts, where all major components including compressors, separators, and control instrumentation, are integrated into one design footprint. The Osaka Bay refineries, Mizushima petrochemical plants, and Hokkaido LNG facilities have all adopted modular solutions to achieve flare reduction targets under space and regulatory constraints.
This increase, is very much related to Japan’s focus on automation and labor efficiency. Mitigating flare gas emissions will benefit all parties in the E&P industry, and modular systems provide out-of-the-box integration with the least amount of field labor, allowing operators to deploy flare gas recovery infrastructure quickly and reliably.
These systems are typically supplied pre-tested and pre-commissioned, aligning with Japan’s preference for precision and fail-safe operation. Modular configurations complement the industry's increased focus on intelligent process control. Modular systems, encompassing smart sensors, PLCs, and cloud-enabled diagnostics, are being deployed more and more by Japanese facilities managing system configuration and performance remotely, so that predictive maintenance supplants conventional, reactive workflows.
Incentives provided by the government for minimizing flare gas as well as energy efficiency ultimately accommodate the modular system. Japan’s Ministry of Economy, Trade and Industry (METI) remains a proponent of deploying scalable, emissions-leaning technologies through policies that support carbon neutrality, sustainable process design and industrial decarburization. Modular flare gas recovery systems align seamlessly with this vision, allowing refineries and terminals to implement sustainability upgrades in a phased manner.
Japan's flare gas recovery system market is niche but growing as the country targets carbon neutrality, follows a strict environmental regulation under METI (Ministry of Economy, Trade and Industry), and so on as flare gas recovery systems are benefiting available clean energy systems. Japan has little on-shore oil production itself, FGRS offers a vital contribution to petrochemical sites, LNG terminals, waste-to-energy and industrial gas recycling applications.
They are developing energy-efficient, low-footprint systems that combine advanced vapor recovery, thermal oxidation, and gas compression technologies. These FGRS sectors are technologically advanced and highly reliable due to the country’s engineering precision complemented by a strong focus on emission control and digital automation.
Recent Developments
Market Share Analysis by Company
| Company Name | Estimated Market Share (%) |
|---|---|
| Mitsubishi Heavy Industries, Ltd. | 20-25% |
| Hitachi Zosen Corporation | 14-18% |
| Ebara Corporation | 10-14% |
| Kobelco Compressors Corporation | 6-10% |
| Other Companies | 30-35% |
| Company Name | Key Offerings/Activities |
|---|---|
| Mitsubishi Heavy Industries (MHI) | Offers high-efficiency flare gas recovery units and compression systems for LNG, petrochemical, and power plant applications. MHI focuses on low-emissions recovery, integrated automation, and smart diagnostics. |
| Hitachi Zosen Corporation | Specializes in flare gas oxidation and vapor recovery units for waste-to-energy and refinery installations. Known for compact, low-NOx systems with integrated heat recovery modules. |
| Ebara Corporation | Supplies compressors and flare recovery systems to chemical and industrial clients across Japan. Focuses on water-cooled and oil-free technologies suited for urban plant environments. |
| Kobelco Compressors (Kobe Steel Group) | Produces oil-injected and screw-type compressors for low- and medium-pressure flare gas recovery. Provides modular systems designed for tight-space installations and fast commissioning. |
The overall market size for the Flare Gas Recovery System Market was USD 82.1 Million in 2025.
The Flare Gas Recovery System Market is expected to reach USD 150.7 Million in 2035.
Increasing investing in clean technologies that lower emissions and leverage resources will drive the demand for the Japan Flare Gas Recovery System Market.
The top 5 regions driving the development of Japan Flare Gas Recovery System Market are Tokyo, Osaka, Kanagawa, Aichi, and Fukuoka supported by industrial clusters and energy transition initiatives.
Medium Pressure Systems (5 to 10 bar) and Modular Configuration is expected to lead in the Japan Flare Gas Recovery System Market.
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Japan Flare Gas Recovery System Market
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