Weekly Japanese Industry and Policy News (December 1-December 7, 2023)

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. 

G7 Digital and Technology Ministers Meeting held
On December 1, 2023, the Digital Agency, the Ministry of Internal Affairs and Communications, and the Ministry of Economy, Trade and Industry held the "G7 Digital and Technology Ministers' Meeting" online. The meeting was attended by G7 member countries and regions as well as related international organizations, and mainly discussed the Hiroshima AI process, DFFT (Data Free Flow with Trust), and its international framework (IAP: Institutional Arrangement). The main points of the ministerial statement are as follows.

-    IAP bring together a community of data governance experts from various backgrounds and work together to materialize DFFT, including presenting practical solutions.
-    The G7 committed to ensuring that the IAP achieves concrete progress based on the principles confirmed in the Ministerial Declaration and Annexes, and that it contributes to cross-border and reliable data flows in cooperation with relevant international organizations. 
-    The G7 welcomes discussions on the establishment of an IAP at the OECD, as it believes that the OECD is suitable to advance this international initiative. From this perspective, it looks forward to Japan assuming the presidency of the 2024 OECD Ministerial Council.
-    The G7 welcomes Italy, as its next G7 Presidency, to continue and develop its agenda on the establishment of the DFFT and IAP, which Japan has promoted in its previous G7 Presidency.

Digital agency website:
https://www.digital.go.jp/en/390de76d-d4f5-4f45-a7b4-f6879c30c389-en

Sekisui Chemical enters into business partnership with Circularise, a Dutch resource circulation traceability system company
Sekisui Chemical announced on December 1 that it has entered into a capital and business alliance agreement with Circularise B.V. of the Netherlands, which develops supply chain traceability systems for resource recycling. The Circularise has identified a social issue in the sharing of information (management, tracking, and certification) in the supply chain, which is essential for realizing resource circulation, and has developed a unique supply chain tradability system that utilizes blockchain and zero-knowledge certification (*1). 

Through this partnership, Sekisui Chemical Group will be able to manage, track, and verify environment-related information such as raw materials, recycling history, mass balance, carbon footprint, and third-party certification on a highly reliable platform, while ensuring the confidentiality of important information. Sekisui Chemical Group aims to achieve a circular economy in 2050 by collaborating with the supply chain, minimizing the amount of fossil-derived raw materials used, and promoting resource circulation through recycling.
(*1) Zero-knowledge proof
Cryptographic techniques that demonstrate to others the accuracy or validity of information without making the information itself explicit when proving it.

SEKISUI CHEMICAL website:
https://www.sekisuichemical.com/news/2023/1395833_40406.html

Japan receives criticism outside COP28
Prime Minister Kishida gave a speech on December 1 at the COP28 summit meeting held in Dubai, United Arab Emirates (UAE). Japan has set a goal of reducing greenhouse gas emissions by 46% in fiscal 2030 compared to fiscal 2013, and reaching net zero by 2050. The prime minister explained, “We have already reduced the consumption by about 20% and are making steady progress.''

Regarding efforts to prevent the increase in coal-fired power plants, which emit a lot of CO2, he said, “We will end the construction of new domestic coal-fired power plants that do not have measures in place to reduce emissions.'' However, on Dec. 3, the Climate Action Network, a group of environmental organizations from around the world, announced that it had selected Japan for the Fossil Prize, which is given to countries that are reluctant to take countermeasures. The network criticized the move as having little effect in reducing CO2 emissions and calling it “greenwashing'' (a sham for the environment) as it seeks to extend the lifespan of coal and gas in Japan and across Asia (major media reports).

The Japanese government has high hopes for a demonstration-stage technology that mixes fuel with materials such as ammonia that do not emit carbon dioxide (CO2) when burned, as a decarbonization technology for thermal power generation. Prime Minister Kishida also gave a speech in which he emphasized his efforts to expand into Southeast Asia and other countries, but this has been seen as a backlash and has become the target of criticism.

Prime Minister’s Office website:
https://japan.kantei.go.jp/101_kishida/statement/202312/02speech.html

Idemitsu Kosan procures synthetic methanol from Chile's HIF Group
Idemitsu Kosan announced on December 1 that it will begin a joint study on e-methanol with the HIF Group, which produces synthetic methanol (e-methanol) using recovered CO2 and green hydrogen. HIF USA, a subsidiary of Chile's HIF Global, which manufactures synthetic fuel (e-fuel) in South America, North America, Australia, and other countries, is launching a synthetic methanol production facility with an annual production capacity of 1.4 million tons in Matagorda, Texas, USA. Idemitsu Kosan and HIF USA have agreed to work together to procure synthetic methanol from this facility and consider developing a synthetic methanol business.

Idemitsu Kosan entered into a Memorandum of Understanding (MOU) with HIF Global in March regarding a strategic partnership in the field of synthetic fuels, and has been conducting various studies with the HIF Group toward the early implementation of synthetic fuels in society. Methanol is a liquid at room temperature and pressure, and Idemitsu Kosan's existing equipment such as tanks and pipelines can be used for storage, transportation, and supply. Synthetic methanol (e-methanol) is produced by synthesizing CO2 recovered from the atmosphere and hydrogen derived from renewable energy (green hydrogen). Unlike methanol, which is produced from fossil fuels, it uses CO2 itself as a raw material, so it greatly contributes to lower carbon emissions throughout the product life cycle, including the use of the final product.

Idemitsu Kosan website (in Japanese):
https://www.idemitsu.com/jp/news/2023/231201.html

Softbank acquires Irish company for ￥5 billion 
SoftBank announced on December 5 that it has agreed to acquire a 51% stake in Cubic's Telecom, a Dublin-based Irish telecommunications company that develops an Internet of Things (IOT) platform for automobiles. The investment amount will be €73 million and executives will also be dispatched. SoftBank aims to capture the world's top share in the connected car field, where cars are connected to the internet. The stock acquisition is scheduled to be completed by June 2024.

Cubic Telecom was established in 2009. The company began providing an IOT platform for connected cars in 2016, and it is currently used in over 17 million vehicles, including Audi and Porsche, in 190 countries and regions, and the number is increasing by 450,000 vehicles every month. Meanwhile, SoftBank and Toyota Motor Corporation established a joint venture called Monet Technologies in 2018, which aims to integrate transportation and IoT. Additionally, in 2019, the company formed a capital alliance with Honda and Hino Motors, aiming to improve its services in the "Mobility as a Service (MaaS)" business in anticipation of business development in the era of autonomous driving.

Softbank website:
https://www.softbank.jp/en/corp/news/press/sbkk/2023/20231205_02/

Japan-France summit meeting announces new roadmap
On December 2, Prime Minister Kishida spoke by phone with French President Macron during his visit to the United Arab Emirates (UAE), and announced a new roadmap that included 122 areas of cooperation, including security, economy, and culture. Economic security will be included as a new area of cooperation, and working groups will be held and cooperation will be promoted regarding important minerals. The two leaders were originally scheduled to meet face-to-face, but due to mutual inconvenience, the talks were held over the phone.

This is the third time the roadmap has been announced, and the target period is five years until 2027. The two countries will also reaffirm their commitment to stability in the Indo-Pacific region, and will strengthen cooperation in maritime security through joint training and exercises. The plan also includes invitations between the Self-Defense Forces and the French military to participate in space-related exercises, and promotes exchanges in areas such as space and cyberspace. 

MOFA website (in Japanese):
https://www.mofa.go.jp/mofaj/files/100590070.pdf

US Nvidia to establish research base in Japan
On December 4, Jensen Huang, CEO of US semiconductor giant Nvidia, met with METI Minister Nishimura and announced the company's intention to establish an artificial intelligence (AI)-related research and development base in Japan. The Minister Nishimura said that NVIDIA's cooperation is essential to improving the computing power necessary for AI development, and that the company's image processing semiconductors (GPUs) are necessary for the development of AI and generative AI. And as the Japanese government, he has requested the supply of GPUs.

Mr. Hwang did not mention the specific timing or location of the establishment, but when the Minister mentioned the National Institute of Advanced Industrial Science and Technology as a candidate for the research center, Mr. Hwang responded that he would consider it positively. He also stated that he would like to invest in Japan in three areas: research bases, startups, and AI human resource development, and acknowledged that he would be able to stably supply GPUs to Japanese companies, where demand is increasing around the world and inventories are tight.

METI website (in Japanese):
https://www.meti.go.jp/speeches/kaiken/2023/20231205001.html

METI Minister’s X (in Japanese):
https://twitter.com/meti_NIPPON/status/1731977384868659473

METI revised list of foreign users with concerns about developing weapons of mass destruction
On December 6, the Ministry of Economy, Trade and Industry (METI) revised and published the “Foreign User List,'' which provides information on organizations located in foreign countries and regions where concerns about the development of weapons of mass destruction, etc. remain unresolved. In order to improve the effectiveness of catch-all regulations* regarding cargo related to weapons of mass destruction, etc., this will provide exporters with information on organizations located in foreign countries and regions where concerns about the development of weapons of mass destruction, etc. are not eliminated. After this revision, a total of 706 organizations are listed in 15 countries and regions. It is applicable from December 11, 2023.

This list is different from the export prohibition list. If the user of the goods to be exported is listed on this list, the exporter is required to apply for an export license, unless it is clear that the goods will not be used for the development of weapons of mass destruction, etc. It has been published since April 2002, when the catch-all regulation was introduced.
*A system that requires an application for an export license if there is a risk that the item may be used for the development of weapons of mass destruction, etc., even if the item is not subject to export controls under international agreements.

METI website:
www.meti.go.jp/policy/anpo/20231206-3.pdf