TOKYO, March 12 (Reuters) - Japan's government on

Tuesday approved a draft amendment to existing legislation to

allow for the installation of offshore wind power in exclusive

economic zones (EEZ), a milestone towards the country's goal of

carbon neutrality by 2050.

Japan aims to have 10 gigawatt (GW) of offshore wind power

projects by 2030 and up to 45 GW by 2040, to replace fossil

fuels including coal and liquefied natural gas (LNG) in its

energy mix, for which floating offshore wind is essential.

The new legislation would allow wind farms to be installed

further out to sea from current territorial and internal waters,

a joint statement by the government, the ministry of economy,

trade and industry (METI) and the ministry of land,

infrastructure, transport and tourism, said.

"Through this bill, we will be able to create stable and

large-scale projects in the sea area," Industry Minister Ken

Saito told a briefing, adding that the new legislation should

accelerate offshore wind expansion.

Global energy companies, from Germany's RWE to

Spain's Iberdrola, have been urging Japan to beef up

auctions and make investments more attractive, amid soaring

costs as competition for suppliers grows worldwide, and to enrol

EEZ law changes.

Installation would be permitted if the project met certain

criteria, including on marine environment protection, and after

public consultations, according to the draft legislation which

is yet to be approved by the parliament.

Consent from fishery communities would be essential for

projects to be approved, according to Saito, as Japan is an

exporter and major marine products consumer at home.

Currently, Japan has less of 0.5 GW of offshore wind power

installed and is developing a few floating offshore wind warms,

mainly for demonstration purposes.

Industry players are closely watching the EEZ legislation,

key for unlocking floating offshore wind development and

allowing for it to be part of the state auctions, all three

major rounds of which have been bottom-fixed.