A group led by Mitsubishi Corporation withdrew from three offshore wind projects in Japan — the latest global setback for the sector.

"Tight supply chains, inflation, exchange rates and rising interest rates” have significantly changed the outlook for offshore wind since the consortium won the sites in a 2021 government tender, Mitsubishi said in a statement on Wednesday.

The announcement comes as the industry has been roiled by cost overruns that have sapped appetite in Europe, and strong opposition from U.S. President Donald Trump’s administration, which shocked developers by halting an almost complete U.S. project late last week. The dent to Japan’s nascent sector also threatens to further derail the fossil fuel-dependent nation’s energy transition and climate goals.

"Japan was already on track to miss its 2030 renewable energy targets, and this development pushes the country further off course,” said Umer Sadiq, Japan analyst at BloombergNEF. Uncertainties to the country’s nuclear power restarts mean Japan will need to rely on liquefied natural gas and coal for power in the medium term, meaning its "energy mix will remain more carbon-intensive than planned, heightening risks around both energy security and decarbonization commitments,” he said.

Mitsubishi said that a majority of losses from the projects have already been accounted for, and that additional losses are expected to be limited. The company recorded a ¥52.2 billion ($352 million) loss on its domestic offshore wind business in February, when it first announced that it would review the projects.

Chubu Electric, one of the other partners in the consortium, expects to see a ¥17 billion charge from exiting the wind projects, it said in a separate statement Wednesday. The company said it isn’t revising its full-year forecast.