Many small and medium-sized firms in Japan have been trying to transition to carbon neutrality. But with energy costs soaring, some of the efforts to go green have been put on the back burner.

Makengineering in western Japan manufactures precision parts. The firm joined a government project that encourages firms to reduce their carbon footprint.

Executives had been preparing to install more solar panels for its factory to cut emissions. But the firm's electric bill has been soaring since Russia's invasion of Ukraine. The charge in September was 1.7 times higher than last year in yen terms. Amid the rising costs, the firm decided to put off the solar power expansion.

Makengineering Chairman Kotani Isao says that skyrocketing energy prices have been a major challenge. He notes that when something unpredictable happens such as a military invasion, bold investments for the long term become less attractive.

An expert on corporate measures to fight climate change says plans for carbon neutrality will be put off as the economy stalls. He says the recent delays in such projects could have a major impact on company efforts to fight climate change.