The EU-Japan Centre is pleased to start a new weekly service by publishing brief summary of the latest information from the Japanese governmental organizations & private companies/organizations. A couple of minutes reading to be informed about what is happening in Japan's policy, economy, EU-Japan relations, and innovation.

*Information is deemed correct at the time of release. 

JAPANESE INDUSTRY AND POLICY NEWS

Japan's labor productivity ranks 27th out of 38 OECD countries
Japan's hourly labor productivity in 2021 announced by the Japan Productivity Center on Dec.19 was at $49.90, placing it 27th out of 38 member countries of the Organization for Economic Co-operation and Development (OECD). The ranking has further retreated from 26th place in 2020. Japan's productivity rose by 1.5% in real terms compared to 2020, but stayed at just under 60% of the US productivity ($85.0). Labor productivity in the manufacturing industry was $92,993, ranking 18th among OECD member countries. In 2000, the productivity of the manufacturing industry of Japan was the highest among developed countries, but it declined after that, and since 2015, it has been hovering in the 16th to 19th place.

JAPAN PRODUCTIVITY CENTER website (in Japanese): https://www.jpc-net.jp/research/detail/006174.html

The Japanese government makes a cabinet decision to significantly increase defense spending　
On December 16, the Japanese government decided at a cabinet meeting to increase defense spending by 1.6 times from the current plan to JP\ 43 trillion over the next five years. The Kishida administration has made a cabinet decision on three security-related documents that describe the security environment as "the most severe since the end of World War II", and clearly states the possession of the capability to directly attack the territory of the other party. After the end of World War II, Japan enacted a pacifist constitution and committed itself exclusively to defense.

Prime Minister’s Office website (in Japanese): https://www.kantei.go.jp/jp/101_kishida/statement/2022/1216kaiken.html

METI, SMEA, JETRO, and SME SUPPORT JAPAN launched a support program for 10,000 new exporters
On December 16, the Ministry of Economy, Trade and Industry (METI) announced that with the Small and Medium Enterprise Agency (SMEA), Japan External Trade Organization (JETRO), and SME Support Japan, it started a program to support 10,000 new exporters. While cooperating with the chambers of commerce and industry across the country, this program works for 1) discovering new businesses which try to export, 2) preliminary export diagnosis by experts, 3) product development for export and covering expenses, and 4) matching with trading companies and support for exhibiting on EC sites. The program was decided by the Cabinet in October this year so that even small and medium-sized enterprises and regional companies that have never exported before can quickly proceed with preparations, specific business negotiations, and exports.

METI website (in Japanese): https://www.meti.go.jp/press/2022/12/20221216001/20221216001.html

METI revised the J-credit system
On December 19, the Ministry of Economy, Trade and Industry (METI) announced that it had revised the J-credit system in order to promote the utilization of the carbon credit system by companies. The J-credit system is a system in which the government certifies the amount of greenhouse gas emissions reduction and absorption through the introduction of energy-saving/renewable energy equipment and forest management as "carbon credits." Under the J-Credit Scheme, 63 types of initiatives are currently eligible for credit creation, and each initiative has its own methodology. In this revision, 1) Methodology for reducing CO2 emissions by burning fossil fuels and replacing grid power by using hydrogen and ammonia, 2) Methodology for reducing CO2 emissions by introducing hydrogen fuel cell vehicles, 3) Methodology for reducing CO2 emissions from the incineration of waste oil after the use of conventional fossil-derived lubricants and the use of raw materials and fuels through the use of biomass-derived lubricants.

METI website (in Japanese): https://www.meti.go.jp/press/2022/12/20221219001/20221219001.html

The government expects economic growth of 1.5% next fiscal year
The government has announced on Dec. 22 that the real growth rate of GDP = gross domestic product will be around 1.5% for the Japanese economy in FY 2023 (from April to March). This is the "economic outlook" that will be the premise of next year's budget compilation, and it was approved at the cabinet meeting. It has been revised upward by 0.4 points from the forecast as of July this year. Although there are concerns about the slowdown of the global economy, the government expects that wages will increase due to factors such as the stimulating effect of economic measures, and that personal consumption and capital investment will grow. However, many private think tanks are forecasting real GDP growth of around 1.0% next fiscal year, making the government's outlook optimistic.

Cabinet office website (in Japanese): https://www5.cao.go.jp/keizai1/mitoshi/2022/r041222mitoshi.pdf

ORIX acquires Spanish renewable energy giant Elawan as a wholly owned subsidiary
ORIX Corporation announced on December 14 that it will make Elawan Energy, a renewable energy company in Spain, a wholly owned subsidiary. Orix already owns an 80% stake in Elawan and has agreed to acquire the remaining 20% stake. Aiming to become a wholly owned subsidiary by the end of March 2023. Elawan develops and operates wind and solar power plants in 14 countries, mainly in Europe, including Spain, and North and South America. It currently has 1,290 MW of projects in operation and approximately 7.3 GW of projects under construction or development. Its feature is the expertise and functions that it consistently handles from development to operation in countries around the world.

ORIX website: https://www.orix.co.jp/grp/en/newsrelease/221214_ORIXE.html

Asahi Kasei develops basic recycling technology for continuous carbon fiber
Asahi Kasei Corporation announced on December 14 that it has developed basic technology for recycling continuous carbon fiber. Conventional carbon fiber recycling technology cuts carbon fibers into 3-24 mm lengths and recycles them as "chopped carbon fiber" processed carbon fiber products. Chopped carbon fiber has a different shape from the original continuous carbon fiber, so it was necessary to develop a separate composite technology. On the other hand, the new technology can be recycled as the original continuous carbon fiber, so existing composite technology can be used and closed-loop recycling is realized. Specifically, it aims to socially implement a recycling system that reuses carbon fiber derived from CFRP (carbon fiber reinforced plastic)/CFRTP (carbon fiber reinforced thermoplastic) discarded from automobiles. Recycling carbon fiber discarded from automobiles as continuous carbon fiber is expected to reduce the weight of automobiles by providing high-quality and low-cost CFRTP, and the energy saving effect.

Asahi Kasei Corporation website (in Japanese): https://www.asahi-kasei.com/jp/news/2022/ze221214.html

JEITA announces global production outlook for electronics and information Industry in 2023
On December 15, the Japan Electronics and Information Technology Industries Association (JEITA) announced the global production outlook for the electronics and information industry. According to this, the global production value of the electronic information industry in 2022 is expected to increase by 1% from the previous year to US$ 3,436.8 billion. In 2023, although uncertainties about the global economy remain due to concerns about the prolonged situation in Ukraine, further growth in solution services is expected due to increased investment in economic measures and digital transformation in each country, and demand for carbon neutrality. The global production is expected to increase by 3% year-on-year to US$ 3,526.6 billion, setting a new record high.

JEITA website: https://www.jeita.or.jp/english/press/2022/1215.pdf

JEITA announces global demand forecast for the digital innovation market through 2030
On December 15, the Japan Electronics and Information Technology Industries Association (JEITA) announced the global demand forecast for the digital innovation market, including cutting-edge technologies that solve social issues. This survey is based on an analysis of public information such as the policies of the governments of major countries and the trends of leading overseas companies, as well as interviews with leading domestic companies. Based on the strategies of each country's government, this survey identified seven technology elements that have a large impact ("Web3.0/Blockchain," "Quantum Computing," "Metaverse," "Cloud/Edge Computing," "5G/Beyond 5G ( 6G)”, “AI/data analysis”, and “server security”), and the market size is estimated based on the assumption that each technology will be utilized and implemented in society. As a result, it forecasts that the digital innovation market in 2030 will reach US$ 2,352.5 billion. IoT devices are expected to grow at an average annual rate of 9.4%, while solution services are expected to grow at an average annual rate of 16.5%, driving the market.

JEITA website (in Japanese): https://www.jeita.or.jp/cgi-bin/topics/detail.cgi?n=4507&ca=1

IHI developed new catalyst for SAF synthesis and confirms world top level yield of liquid hydrocarbons
On December 19, IHI announced that it had developed a new catalyst for synthesizing sustainable aviation fuel SAF from CO2, and confirmed a liquid hydrocarbon yield of 26%, the highest level in the world. This initiative is being carried out jointly with ISCE, a research institute under the Singapore Agency for Science, Technology and Research. In this joint research, utilizing the catalyst technology owned by both parties, they developed a technology that can efficiently synthesize liquid hydrocarbons, which are the raw materials for SAF, from CO2 and hydrogen. The new catalyst developed by the two organizations is a SAF synthesis catalyst that directly reacts H2 and CO2, and has world-leading performance in the yield of liquid hydrocarbons with 5 or more carbon atoms (C5 + yield 26%).

IHI website (in Japanese): https://www.ihi.co.jp/ihi/all_news/2022/technology/1198123_3481.html

The Japanese Ministry of Agriculture, Forestry and Fisheries supports further efforts to reduce the use of chemical fertilizers and pesticides
The Japanese Ministry of Agriculture, Forestry and Fisheries (MAFF) has an ongoing certification project that helps innovative new infrastructure and machinery projects which aid the realization of the Green Food System Law. Besides the direct environmental benefits of reducing the use of chemical fertilizers, chemical fertilizers are also a major market for (grey) hydrogen. Certified projects are supported through special tax exemptions when making capital investments. A brief overview of the newly certified machinery/infrastructure projects is provided with MAFF’s press release. One of the infrastructure projects is related to using sewage sludge for fertilizer production, an area of interest to MAFF in which there are ongoing public-private study groups organised by MAFF, the next to be held this Friday, 23rd of December. 

Website (in Japanese): https://www.maff.go.jp/j/press/kanbo/b_kankyo/221221.html
Website (in Japanese): https://www.maff.go.jp/j/press/kanbo/bio_g/221222.html

JETRO released the FY2022 survey results on Japanese Companies expanding overseas and highlights the great interest in hydrogen and ammonia projects in the Middle East
Every year, the Japan External Trade Organization (JETRO) releases the results of a Fact-finding Survey on Japanese Companies Expanding Overseas. This year, JETRO highlighted the strong interest amongst Japanese firms in hydrogen & ammonia projects in the Middle East. OF the 224 companies that submitted a valid response, 51.4% considered “resources and energy” a promising business field in the region. OF those companies that found “resources and energy” a promising field, 69.2% of firms were interested in hydrogen and 67.3% were interested in fuel ammonia projects in the Middle East, taking the top spots within the “resources and energy” field. Interest in hydrogen and ammonia fuel is especially strong in Saudi Arabia and the United Arab Emirates, while Turkey is seen as a great potential market for renewable energy primarily. The expectations in these areas are raised when compared to the results from previous surveys.

Website (in Japanese): https://www.jetro.go.jp/biznews/2022/12/84884d9fd7909afe.html