Weekly Japanese Industry and Policy News (Mar. 3-Mar. 9, 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.
Weekly Japanese Industry and Policy News (Mar. 3-Mar. 9, 2023)
Extension of mid-drying period by cultivation of paddy rice is newly approved in J-Credit
On March 1, the Ministry of Agriculture, Forestry and Fisheries (MAFF) announced that the extension of the drying period for paddy rice cultivation, which reduces the emission of methane from paddy fields, has been approved for credit certification under the J-credit system. Implementation is scheduled for mid-April.
This methodology targets emissions reduction activities that curb methane emissions from the soil by extending the period of NAKABOSHI, which drains the water from the paddy field and dries the surface of the paddy field during the rice cultivation period. In order to reduce the amount of methane emitted from paddy fields, it is important to lengthen the period during which the water is drained. It has been confirmed that the amount of methane emitted can be reduced by 30% by extending the period of mid-drying, which is normally practiced in paddy rice cultivation, by seven days. Methane emissions from paddy fields account for about 40% of all methane emissions in Japan, and the reduction of methane emissions is included in the government's Global Warming Countermeasures Plan (approved by the Cabinet on October 22, 2021).
The J-credit system allows the government to certify the amount of greenhouse gas emission reductions as "credits" and enable transactions. In addition to "visualization" of emissions reductions by farmers, forestry and fisheries workers, they can earn sales income from credits generated by efforts to reduce and absorb greenhouse gases.
MAFF website (in Japanese): https://www.maff.go.jp/j/press/kanbo/b_kankyo/230301.html
Zero Carbon City International Forum 2023 was held
The Ministry of the Environment (MOE), Japan, and the Office of Special Presidential Envoy for Climate, the United States of America, co-organized the "Zero Carbon City International Forum 2023" on March 1, 2023. In the panel discussion of the first session, the role of cities that can take concrete climate actions according to regional characteristics through dialogue with citizens was reaffirmed, and the importance of dialogue between national and subnational governments (G7 and U7 dialogue) in promoting urban climate actions was also confirmed. They also exchanged views on how to expand the G7/U7 initiatives to the G20/U20, and confirmed that they will continue to increase the momentum of urban initiatives globally in preparation for COP28.
In the 2nd and 3rd session, speakers shared lessons of advanced efforts and discussed challenges and future activities on net-zero transition, and multiple benefits such as smart/compact cities, digital technologies, resilience, circular economy, and nature positive economy.
Throughout the forum, the importance of subnational actions on climate change, circular economy and biodiversity conservation was recognized, as well as the importance of close cooperation between national and local governments and international city-to-city collaboration to further promote subnational initiatives.
MOE website: https://www.env.go.jp/en/press/press_01155.html
METI held Asian Zero Emission Community (AZEC) Ministerial Meeting and AZEC Public-Private Investment Forum
On March 4, 2023, the Ministry of Economy, Trade and Industry held the Asian Zero Emission Community (AZEC) Ministerial Meeting. In conjunction with this, on March 3, the AZEC Public-Private Investment Forum was held to create and accelerate concrete cooperation in the AZEC concept.
At the Ministerial Meeting, a joint statement was agreed including three common recognitions that (1) achieving both “decarbonization” and “energy security,” (2) promoting “decarbonization” while achieving “economic growth,” and (3) the path towards carbon neutrality should be “diverse and realistic” in accordance with the circumstances of each country. In addition, it launched the “Asia Zero Emissions Community” as a framework.
At the Public-Private Investment Forum, Asian ministers and state-owned enterprises made comments on their respective efforts toward decarbonization and their expectations for cooperation with Japan. On the other hand, the nine Japanese companies that attended introduced their technologies and their own efforts toward decarbonization, and Japanese government agencies and others introduced related support. In conjunction with this forum, a total of 28 MOUs were newly announced in a wide range of decarbonization fields such as renewable energy, biomass, hydrogen, ammonia and LNG.
On March 3, it was announced that Japan's first hydrogen supply chain would be launched, with the support of the Japanese government, connecting Victoria, Australia, and Kawasaki, Japan, a major industrial hub. A memorandum of understanding was signed between the state of Victoria, Nippon Hydrogen Energy, Iwatani Sangyo, Electric Power Development, and Sumitomo Corporation in the presence of Minister of Economy, Trade and Industry Nishimura and Australia's Assistant Minister for Climate Change and Energy McAlister.
METI website: https://www.meti.go.jp/press/2022/03/20230306005/20230306005-24.pdf
Decarbonization of Japanese electricity achieved 90% by 2035, Japan-U.S. research institute estimates
A research team consisting of research institutes and universities in Japan and the United States announced on February 28, 2023 announced a report that depending on Japan's future decarbonization strategy, it was found that the ratio of the annual power generation of clean energy (renewable energy and nuclear power generation) in 2035 could increase to 90% which was 24% in 2019. Fossil fuel imports could be reduced by 85% in monetary terms, while the average wholesale cost of power generation could be reduced by 6% compared to 2020.
The report was published by a research team consisting of researchers from Lawrence Berkeley National Laboratory (LBNL), a US national laboratory, the University of California Berkeley, and Kyoto University. Based on the cost reduction trend of photovoltaic power generation, wind power generation (especially offshore wind power generation), and storage battery technology, they simulated the introduction of optimal power generation equipment in the future and conducted cost analysis at that time on an hourly basis.
As a result, it is assumed that by 2035 it will be possible to generate 90% of Japan's annual electricity demand from clean energy alone. At that time, 27% of the total annual power generation will be solar power, 26% will be wind power (especially offshore wind power), 20% will be nuclear power, and 6% will be biomass power. If looking only at renewable energy, including hydroelectric power generation, it will be 70%. In addition, the storage battery equipment connected to the power system is assumed to have a total rated output of 29 GW and a rated capacity of 116 GWh. At that time, the average wholesale electricity cost will be 6% lower than in 2020. Considering the social cost of carbon, the wholesale power cost will be 36% lower than the previous year.
Lawrence Berkeley National Laboratory website: https://emp.lbl.gov/publications/2035-japan-report-plummeting-costs
German Evonik to build new fumed alumina production plant for EV batteries in Mie pref.
On March 2, Evonik Industries, a major chemical company in Germany announced that it constructs a new plant to manufacture fumed alumina, a material for lithium-ion batteries for electric vehicles (EVs), at its group company Nippon Aerosil Yokkaichi Plant (Mie Prefecture). Operations are scheduled to start in 2025.
The facility will be the first fumed alumina production plant in Asia. In Asia, the market for next-generation batteries and powder coatings for EVs is expanding. The construction of the new plant will accelerate the growth of the lithium-ion battery market and meet the needs of the rapidly growing battery industry in China, Japan and South Korea. The investment this time will be JP\ several billion. Construction is scheduled to begin in the summer of 2023.
As a joint venture between Evonik and Mitsubishi Materials Corporation, Nippon Aerosil has been manufacturing fumed oxides at the same plant for more than 50 years, providing a stable supply of products to Asian countries.
EVONIK website: https://www.silica-specialist.com/en/service-center/press-releases/evonik-invests-into-fumed-aluminum-oxide-production-plant-expansion-for-battery-applications-in-yokk-192580.html
Japan's main rocket "H3" No. 1 launch failure
Japan's new main rocket "H3" No. 1 was launched from the Tanegashima Space Center in Kagoshima Prefecture at around 10:37 am on March 7, but the ignition of the second stage engine was not confirmed. About 15 minutes later, the organization (JAXA) sent a command destruction signal to the aircraft from the ground, and the launch failed. On the same day, the Ministry of Education, Culture, Sports, Science and Technology set up a task force to investigate the cause.
The H3, the successor to the current flagship H2A rocket, was expected to participate in the global satellite launch market by reducing costs and increasing launch capacity, but it was a big blow to the government and JAXA. Japan's rocket failure follows the solid fuel rocket "Epsilon 6" in October last year.
The H31 is equipped with the government's earth observation satellite "DAICHI-3", which is used to assess the extent of damage in the event of a disaster. In the future, H3 was scheduled to launch an unmanned resupply ship "HTV-X" that will carry supplies to the International Space Station (ISS) and a lunar orbiting base, and a satellite probe to Mars. It will be an important rocket in ensuring the autonomy of Japan's space development, and depending on the cause, there is a risk that it will have a long-term impact on future plans.
JAXA website (in Japanese) https://www.jaxa.jp/press/2023/03/20230307-2_j.html
JAXA press conference (youtube in Japanese) https://www.youtube.com/user/jaxachannel
Sojitz and JOGMEC sign Japan's first supply agreement with an Australian company for heavy rare earths
On March 7, Sojitz and the Japan Energy and Metals National Corporation (JOGMEC) announced that they signed a contract to supply heavy rare earths to Japan with Lynas, a major Australian rare earths company. Heavy rare earth elements are used in magnets for electric vehicle (EV) motors. According to the Ministry of Economy, Trade and Industry, it is the first time for Japan to acquire an interest in heavy rare earth. Japan depends on China for production of most of its heavy rare earth metals, and the aim is to secure a new supply chain.
Sojitz and JOGMEC will invest approximately 200 A$ million (approximately JP\ 18 billion) in Lynas by the end of March through Japan-Australia Rare Earth Co., Ltd., which was jointly established by Sojitz and JOGMEC in 2011. Through investment from Sojitz and others, Lynas will expand production of light rare earths, which it has been involved in, and will start producing dysprosium and terbium, which are types of heavy rare earths.
Sojitz will supply Japan with up to 65% of these heavy rare earth rare earths mined from the Mount Weld Mine (Western Australia). Rare earths are roughly divided into two types: light rare earths, which are the main raw materials of magnets for motors, and heavy rare earths, which are responsible for giving heat resistance to magnets. China currently produces almost all heavy rare earth metals.
Sojitz website: https://www.sojitz.com/en/news/2023/03/20230307.php
Japan ranks second worst for 7 consecutive years in 29 countries for ease of working for women
On March 7, the British magazine The Economist announced the 2022 ranking of 29 countries, mainly developed countries, that indexed the ease of working for women. Nordic countries occupy the top four countries, including Iceland at the top. Japan ranks 28th, with South Korea at the bottom. Japan and South Korea have remained in the same ranking for at least seven consecutive years since 2016.
The survey ranked workers based on 10 criteria, including wages, education levels, and gender disparities in labor force participation rates. It is conducted every year as an indicator of the "glass ceiling" that impedes the active participation of women. Sweden, which had held the top spot for two years in a row until last year, ranked second overall, followed by Finland, Norway, and Portugal.
Regarding both Japan and South Korea, the magazine pointed out that women are still in a situation where they have to choose between family and work. Among the 29 countries, Japan was the best in taking paid paternity leave, but the gender gap in salary levels and the percentage of women in key corporate positions and parliamentarians were either the worst or the close to that level.
The Economist website: https://www.economist.com/graphic-detail/glass-ceiling-index
MOL to build clean hydrogen and ammonia supply network in Thailand
Mitsui O.S.K. Lines (MOL) announced on March 6 that it will start working on building a clean hydrogen and ammonia value chain derived from renewable energy in Thailand. In addition to the company, Chiyoda Corporation, Electricity Generating Authority of Thailand (EGAT) and Mitsubishi Corporation will participate in this initiative.
In order to achieve the decarbonization target in Thailand, in the future, in the southern part of Thailand, they will build a series of supply chains from the production of clean hydrogen and ammonia derived from renewable energy to storage, transportation, use, and supply inside and outside the country. MOL will consider safe and efficient transportation means and methods for hydrogen and ammonia.
In January 2022, the Kishida Cabinet proposed the "Asia Zero Emissions Community (AZE)" concept to contribute to the decarbonization of Asia. In particular, Thailand is positioned as an important country, and it is expected that the movement toward carbon neutrality will further accelerate in the future.
MOL website: https://www.mol.co.jp/en/pr/2023/23024.html
Osaka Gas to manufacture and export synthetic methane derived from non-fossil energy in Australia
On March 7, Osaka Gas announced that its subsidiary, Osaka Gas Australia Pty, will work with Australian company Santos to produce synthetic methane "e-methane" made from non-fossil energy sources such as green hydrogen, and export it to Japan and other countries. The methane can be used in existing city gas infrastructure and consumer equipment, and is expected to be used in the fields of power generation and transportation due to the smooth transition to carbon neutrality and the suppression of social costs.
Specifically, in Australia, e-methane will be produced from CO2 recovered from industrial exhaust gas and natural gas liquefaction plants, and green hydrogen produced by electrolyzing water using renewable energy. The produced methane will be liquefied at LNG terminals owned by Santos or third parties and exported to Japan and other countries. In the future, they are considering the use of CO2 captured from the air.
In FY2023, they will consider business details such as procurement of renewable energy and CO2, site selection for manufacturing plants (assumed to be 10,000Nm3/h class), efficiency and process optimization during manufacturing, and business feasibility. The basic design will be completed in FY2024, the investment decision will be made in FY2025, and exports will begin in 2030. The initial target is 60,000 tons per year.
Osaka gas website: https://www.osakagas.co.jp/en/whatsnew/__icsFiles/afieldfile/2023/03/07/230307.pdf