Weekly Japanese Industry and Policy News: 06 September - 12 September, 2025

The EU Japan Centre is releasing a weekly press review covering Japan's economic and policy matters.

Economic News

▶ Japan scales up batteries but companies worry rule changes may curb growth

09 Sep, 2025

Investors have poured over $2.6 billion into Japan’s growing battery energy storage market to address power grid curtailments caused by increasing renewable energy use. Despite strong demand—especially in regions like Tohoku and Kyushu where renewables are abundant—planned changes to Japan’s long-term decarbonized capacity auctions (LTDA) threaten the sector. The government plans to reduce battery storage capacity offered in the next auction, raise minimum battery discharge duration from 3 to 6 hours, and increase fossil fuel and nuclear allocations. These changes could raise costs, limit short-duration battery projects, and discourage investment, potentially undermining decarbonization goals. Industry experts warn that such shifts may preserve existing power sources rather than promote renewables and battery storage, making Japan less attractive to global investors.

Asahi: https://www.asahi.com/ajw/articles/16018090

▶ Japan Govt to Support Perovskite Solar Cell Mass Production With ¥24.6 Bil. in Subsidies

10 Sep, 2025

Japan’s Economy, Trade and Industry Ministry will provide ¥24.6 billion in subsidies over five years to Panasonic, Ricoh, and EneCoat Technologies to support mass production of next-generation perovskite solar cells. Panasonic is developing glass-type cells, while Ricoh and EneCoat focus on lightweight film-type versions. All three aim to reach 200–300 MW of annual production capacity by 2030. EneCoat is partnering with Toyota to expand applications to cars and factories. The funding comes from the Green Innovation Fund, supporting Japan’s goal of generating 20 GW from perovskite solar cells by 2040.

Yomiuri: https://japannews.yomiuri.co.jp/business/economy/20250910-280184/

▶ Japan to Establish System for Sharing EV Battery Degradation Data, in Collaboration with Firms Including Toyota, Honda

10 Sep, 2025

The Japanese government will partner with companies like Toyota and Honda to create a system for sharing data on EV battery degradation. The goal is to boost the domestic market for used EVs and batteries, improve resale values, and reduce the export of used products. Supported by the Economy Ministry, the initiative involves battery maker Prime Planet Energy & Solutions and Revortex. By making battery health data accessible to dealers and insurers, the project aims to expand EV-related services. A previous trial showed that used EVs with performance guarantees sold for 20% more and were more likely to stay in Japan.

Yomiuri: https://japannews.yomiuri.co.jp/business/economy/20250910-280168/

▶ Japan spends half the OECD average on higher education

10 Sep, 2025

An OECD report reveals that Japan’s government spending on tertiary education is only 54% of the OECD average, with just 31% of higher education teachers being female—the lowest rate among member countries. Despite this, 66% of Japanese aged 25-34 have completed higher education, surpassing the OECD average of 48%. Japan spends more than average on elementary to high school education but invests less overall in education as a percentage of GDP (3.9% vs. 4.7% OECD average). Half of Japan’s higher education teachers are over 50, above the OECD average. OECD officials highlight that limited public support contributes to social inequality and stress the need for combined subsidies and support systems to ensure access to education for talented individuals.

Asahi: https://www.asahi.com/ajw/articles/16019620

▶ Japan, Brazil business groups push for Mercosur economic pact

11 Sep, 2025

Japanese and Brazilian business groups, including Keidanren, CNI, and FIESP, have agreed to support negotiations for an Economic Partnership Agreement (EPA) between Japan and the South American trade bloc Mercosur (Brazil, Argentina, Bolivia, Paraguay, Uruguay). At a meeting in São Paulo, Keidanren's Tatsuo Yasunaga emphasized that the EPA would help diversify supply chains and reduce reliance on global powers like the U.S. and China. The joint statement called for deeper cooperation in supply chain resilience, decarbonization, and sustainable development. Globally, countries are strengthening ties with Mercosur—the European Union is advancing ratification of its FTA with the bloc, while the European Free Trade Association has already signed an agreement. Japan is now aiming to follow suit.

Nikkei Asia: https://asia.nikkei.com/politics/international-relations/japan-brazil-business-groups-push-for-mercosur-economic-pact

▶ Europe had ESG. Japan wants big role in disaster risk financing

12 Sep, 2025

Japan is aiming to lead international rulemaking in disaster risk financing, similar to Europe’s role in setting ESG standards. A Japanese panel, led by the Development Bank of Japan (DBJ), has drafted unified standards based on input from 11 countries, aiming for publication in March. The initiative draws on the UN’s 2015 Sendai Framework and seeks to shift the focus from post-disaster compensation to prevention and mitigation. Examples include installing seismometers in factories or drainage systems at airports. Japan sees this as a strategic area to boost global adoption of its technologies and expand investment opportunities. The DBJ pioneered disaster-related loans and hopes new standards will attract more institutional capital to improve global disaster resilience.

Nikkei Asia: https://asia.nikkei.com/business/finance/europe-had-esg.-japan-wants-big-role-in-disaster-risk-financing

▶ Japan offers more aid to offshore wind after Mitsubishi Corp. withdrawal

12 Sep, 2025

Japan's government will provide additional support for offshore wind power operators after Mitsubishi Corp. withdrew from a project due to soaring construction costs. Key measures include extending maritime usage periods beyond the current 30-year limit to improve profitability, with expected lifespans of 40–50 years for equipment. Operators like JERA and Mitsui are also facing financial strain and have requested subsidies, tax relief, and eligibility for long-term revenue auctions. The government has introduced criteria for allowing post-bid contract changes without compromising fairness. A review of Mitsubishi's withdrawal is underway, likely leading to reforms in the bidding system, which currently favors the lowest price. Globally, offshore wind investment is slowing, prompting Japan and other countries like the UK, Netherlands, and South Korea to adjust support frameworks to prioritize sustainable project viability. Japan aims to increase wind power's share of its energy mix to 4–8% by 2040, up from 1% in 2023.

Nikkei Asia: https://asia.nikkei.com/business/energy/japan-offers-more-aid-to-offshore-wind-after-mitsubishi-corp.-withdrawal

▶ Japan firms facing challenge of employing more workers with disabilities

12 Sep, 2025

Japanese companies are working to meet the increased legal requirement to hire more people with disabilities, raising the employment rate from 2.5% to 2.7% next July. To retain disabled employees, firms like Kirin, Fast Retailing, and Nomura are improving workplace accommodations, using assistive technologies, and offering flexible job options. Fast Retailing employs nearly 5% disabled workers, while Nomura provides strong support through a special subsidiary with an 80% retention rate. However, experts warn that rapid hiring may lead to mismatches and emphasize the need for ongoing job adjustments based on individual needs.

Japan times: https://www.japantimes.co.jp/business/2025/09/12/companies/companies-disability-employment/

Business News

▶ IHI agrees collaboration with SatVu on Thermal Infrared (IR) Satellite Constellation Development - Partnership with leading UK space company will contribute to Japan’s national security

08 Sep, 2025

IHI Corporation has signed an MoU with UK-based SatVu, a leader in thermal infrared (IR) satellite technology, to jointly develop a Japanese sovereign constellation of high-resolution thermal IR satellites. The partnership aims to enhance national security, economic monitoring, and climate tracking by leveraging SatVu’s thermal data capabilities and IHI’s satellite engineering expertise. The agreement, signed during the DSEI UK 2025 event, supports growing UK-Japan defense cooperation under the Hiroshima Accord. IHI plans to expand its constellation to include multiple satellite types (IR, SAR, RF, etc.) and is also working with ICEYE on SAR satellites to boost Japan’s space-based surveillance and defense capabilities.

IHI: https://www.ihi.co.jp/en/all_news/2025/aeroengine_space_defense/1201641_13743.html

▶ Seven-Eleven begins trial of shelf-stocking, floor-cleaning robots in Tokyo

09 Sep, 2025

Seven-Eleven Japan has started using worker robots at a convenience store in Tokyo as part of efforts to tackle labor shortages and rising wage costs. One robot handles stocking bottled drinks and canned alcohol, while others clean floors and windows. Additionally, the store has introduced a remote customer service screen to reduce cashier workload during late-night shifts. Separately, the company is also trialing delivery robots to transport goods from stores directly to customers’ homes.

Kyodo: https://english.kyodonews.net/articles/-/60709

▶ Industry partners form GCAP Electronics Evolution consortium

to deliver sensing and communications for next generation fighter

09 Sep, 2025

Japan's Mitsubishi Electric, the UK’s Leonardo UK, and Italy’s Leonardo and ELT Group have formed a consortium called GCAP Electronics Evolution (G2E) to lead the development of the sensing and communications systems for the Global Combat Air Programme (GCAP). This next-generation fighter jet project involves the UK, Japan, and Italy. G2E will focus on the ISANKE & ICS systems—critical technologies for integrated sensing, non-kinetic effects, and communication. The consortium aims to meet GCAP’s tight timeline while ensuring national flexibility and long-term support. Its leadership team will be based in Reading, UK, to work closely with GCAP’s government and industrial partners.

Mitsubishi Electric: https://www.mitsubishielectric.com/en/pr/2025/pdf/0909-b.pdf

▶ Japan's Mitsui, Itochu to acquire interests in Australia iron mine

10 Sep, 2025

Mitsui & Co. and Itochu will acquire stakes in the Ministers North Iron Ore Deposit in Western Australia's Pilbara region, alongside BHP, following their existing ownership ratios (Mitsui 7%, Itochu 8%, BHP 85%). The move aims to meet rising global steel demand, particularly from India and Southeast Asia.

Production is expected to reach 20 million metric tons annually, with a final investment decision due by June 2026. The new mine will help offset declining output at existing sites like Yandi.

Mitsui plans to raise its iron ore interests to over 100 million tons by 2050, including a major investment in the Rhodes Ridge project with Rio Tinto. Itochu is also expanding, aiming for 40 million tons by 2030, supported by increased stakes in both Australian and Brazilian operations.

Nikkei Asia: https://asia.nikkei.com/business/materials/japan-s-mitsui-itochu-to-acquire-interests-in-australia-iron-mine2

▶　Komatsu partners with US startup on mining machinery software

10 Sep, 2025

Japanese equipment maker Komatsu is teaming up with U.S. startup Applied Intuition to develop next-generation software-defined mining machinery. The collaboration combines Komatsu's autonomous tech with Applied Intuition's AI and simulation capabilities to boost efficiency and address labor shortages.

The new software will allow for wireless updates, reducing downtime and enabling real-time improvements. It will also support full automation and adapt to on-site conditions such as terrain and operator skill levels. This move positions Komatsu to better compete with rivals like Caterpillar, who are also investing in automation.

Nikkei Asia: https://asia.nikkei.com/business/technology/komatsu-partners-with-us-startup-on-mining-machinery-software

▶ EU-backed fund plans Japan entry to invest in green start-ups

10 Sep, 2025

EIT InnoEnergy, one of Europe's largest green venture capital funds, is planning to enter Japan as part of a broader EU-Japan initiative to strengthen industrial cooperation and accelerate decarbonization. Backed by major European energy companies and aligned with the European Commission, the fund has raised over €34 billion and supports startups in sectors like batteries, hydrogen, and solar power. The move, expected to follow a high-level EU-Japan meeting later this month, will involve cooperation with JETRO and Japan’s GX Acceleration Agency. It marks the first project under the EU-Japan "competitiveness alliance" and aims to attract European capital to Japan’s green startups, enhancing global credibility and competitiveness. The EU sees this as a way to lead in setting global green standards and counter China's dominance in clean tech, amid reduced U.S. climate spending under the Trump administration.

Nikkei Asia: https://asia.nikkei.com/business/finance/eu-backed-fund-plans-japan-entry-to-invest-in-green-start-ups

▶ Mitsubishi Heavy Industries Achieves Target Performance at Pilot Plant for Bioethanol Membrane Dehydration Systems 

12 Sep, 2025

Mitsubishi Heavy Industries (MHI) has successfully achieved over 99.5% ethanol purity using its Mitsubishi Membrane Dehydration System (MMDS®) at a pilot plant in Nagasaki. This meets Japan’s fuel standards and marks a major step toward energy-efficient bioethanol production, reducing energy use by over 30% compared to conventional methods. MMDS® uses a molecular sieve for liquid-phase separation, enabling compact system design and lower operational costs. MHI aims to build a demonstration plant next, supporting its broader goal of developing clean, hydrogen-free bioethanol and contributing to carbon neutrality and sustainable fuel solutions like SAF.

Mitsubishi Heavy Industries: https://www.mhi.com/news/250912.html