Weekly Japanese Industry and Policy News (November 24-November 30, 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. 

AI will support tomato cultivation, Kagome and NEC will launch in Italy next spring
Kagome and NEC will launch a tomato cultivation support service using artificial intelligence (AI) in Italy as early as April 2024. A demonstration experiment recently conducted in the country succeeded in increasing yields by 23% while using 19% less water than usual. As climate change risks increase, the service will be expanded to Italy, one of the world's leading tomato producing regions, following Portugal, where it has already been commercially introduced.

The joint venture between the two companies provides services to tomato farmers. Based on data from satellites and sensors installed in fields, AI determines the optimal amount and timing to apply water and fertilizer. In Portugal, the service was introduced from April 2023 on two large-scale tomato farms totaling 21 hectares, with an average yield of 148 tons per hectare, which is over the past few years as the typical yield in Portugal (per hectare 90-100 tons).

As droughts occur around the world due to climate change, countermeasures against water shortages are an urgent issue for farmers. In 2022, the production of tomatoes for processing declined due to drought in northern Italy, Spain, and other regions. A shift to more sustainable cultivation methods is expected. 

Kagome website (in Japanese):
https://www.kagome.co.jp/company/news/2023/2023110801.html

METI reports results of INC3 meeting towards formulation of treaty on plastic pollution
The Ministry of Economy, Trade and Industry (METI) reported on November 21 the result of the third session of Intergovernmental Negotiating Committee to develop an international legal binding instrument on plastic pollution, including in the marine environment, held in Nairobi, Republic of Kenya, from November 13 to November 19, 2023 (INC3). Approximately 2,000 people attended from 160 United Nations member states, related international organizations and NGOs. A government delegation from Japan consisting of the MOFA, METI, MOE and Fisheries Agency attended.

At this meeting, based on the zero draft of the treaty published in September, three working groups were established to discuss the objectives, core obligations, means of implementing treaty obligations, definitions and principles, etc. The main focus was on integrating each country's proposals into the draft as much as possible, and as a result of the discussions, a revised version of the draft article incorporating all the proposals of each country was created. It was decided that this would be the basis for negotiations at INC4.

The Japanese government delegation asserted that:

- The objective of the treaty should include the ambition to reduce additional pollution to zero by 2040;

•  It is necessary to establish a society-wide plastic resource circulation mechanism and to establish regulations that address the entire lifecycle from production to waste management;
• Restrictions on the production of primary plastics should be implemented based on the circumstances of each country, rather than a uniform worldwide regulation;
•  It is important to respond based on scientific evidence, and attention should be paid to overlap with other existing treaties;
• It emphasized that support for implementation should focus on effective measures and be provided to countries that truly need it.

The next meeting, INC4, is scheduled to be held in Ottawa, Canada, from April 21 to 30, 2024.

METI website (in Japanese):
https://www.meti.go.jp/press/2023/11/20231121002/20231121002.html

Tokyo Gas to manufacture and export e-methane in Australia
Tokyo Gas announced on November 21 that it will begin discussions with Santos Ltd, a major Australian energy company, to commercialize the production and export of e-methane in Australia. The company aims to import gas equivalent to 1% of its annual sales volume in 2030. The project involves producing e-methane in Cooper Basin, located in central eastern Australia, and exporting it to Japan. Tokyo Gas has recently signed a memorandum of understanding with Santos Ventures Pty Ltd, a subsidiary of Santos, for commercialization. The company aims to initially procure approximately 60,000 tons per year in 2030, and plans to further expand exports in the future.

In addition, the two companies will move forward with the commercialization of manufacturing and export of e-methane, work with related parties to design a system for counting CO2 emissions of e-methane, and work toward building an international supply chain for this fuel. The two companies have previously built a long-term cooperative relationship, including in the procurement of LNG from the Darwin LNG Terminal in Australia.

Tokyo Gas website (in Japanese):
https://www.tokyo-gas.co.jp/news/press/20231121-01.html

French human resources giant ALTEN acquires East Japan Institute of Technology 
ALTEN Group, a major French human resources services company announced on November 27 that it has acquired East Japan Technical Research Institute (Hitachi City), which dispatches engineers. The acquisition amount is estimated to be approximately JP\ 10 billion. In Japan, ALTEN has focused on semiconductor and automobile manufacturers, but the acquisition of the company, which has major electronics manufacturers as customers, will strengthen its business base. East Japan Institute of Technology was founded in 1985 and the company dispatches engineers to major electronics manufacturers and other companies to design IT systems and develop software, mainly in Ibaraki Prefecture.

ALTEN Group is headquartered in Paris and provides human resources services such as engineer dispatch in 30 countries around the world. The company has approximately 53,000 employees, including temporary engineers. Sales for the fiscal year ending December 2022 will be JP¥ 534.1 billion. In 2019, it acquired a domestic engineer dispatch company and expanded into Japan. Human resources service companies that dispatch engineers are rushing to expand their business base through M&A and train engineers.

ALTEN Japan website:
https://www.alten.com/alten-acquires-east-japan-institute-of-technology-co-ltd/

Hitachi Energy develops demonstration hydrogen generator with Swedish fuel cell manufacturer
Hitachi Energy announced on November 22 that it has developed a demonstration model of the HyFlex hydrogen generator, which uses fuel cell technology and produces zero CO2 emissions, in collaboration with Power Cell Group, a Swedish fuel cell manufacturer. This hydrogen generator is a facility that integrates a fuel cell, power substation, and ancillary equipment, and is scalable and can supply electricity even in environments where it is difficult to connect to the power grid. It can be used as a replacement for diesel generators, and is expected to be used at construction and mining sites, as well as data centers, hospitals, and docked ships that require emergency backup.

Generally, when operating a diesel generator (1MVA) at rated output for 1 hour, 225kg of diesel fuel is required and 720kg of CO2 is emitted, but the electricity produced by "HyFlex" is CO2-free (according to Hitachi Energy). They plan to utilize the knowledge gained through the development of this demonstration machine to release a medium output type of 400-600kVA in the latter half of 2024, and a high output type of 1MVA or more in 2025. Hitachi Energy has previously provided “Grid-to-Stacks'' solutions for 20MW hydrogen production facilities in Sweden and Finland that optimize the power supply from the high-voltage power grid to the electrolyzes.

Hitachi Group Website:
https://www.hitachienergy.com/uk-ie/en/news/press-releases/2023/11/hitachi-energy-unveils-new-emission-free-alternative-to-diesel-powered-generators

Mitsubishi Heavy Industries and Australia's Orica sign memorandum of understanding (MOU) on business development related to hydrogen and ammonia
Mitsubishi Heavy Industries (MHI) and Orica signed an MOU on November 27, agreeing to work together on decarbonization and business development related to hydrogen and ammonia. As a technology provider, MHI is developing businesses aimed at decarbonizing Orica's manufacturing bases in Newcastle and Gladstone, Australia, and producing hydrogen and ammonia in surrounding areas, as well as the creation of demand for hydrogen and ammonia in the field of power generation, shipping, industry, and agriculture. 

Orica is a major chemical company that primarily produces ammonium nitrate for mining, and is leading the way in achieving net zero. With locations in promising hydrogen hub areas such as New South Wales and Queensland, it is working on initiatives that will become the starting point for creating a clean fuel supply chain.

MHI website:
https://www.mhi.com/news/231127.html

Kyushu University invests in technology for direct capture CO2 from the atmosphere
Kyushu University announced on November 24 that it will invest in Carbon Xtract, a new company established mainly by Sojitz, and participate in its business. The university aims to quickly commercialize Direct Air Capture (DAC), a technology currently being developed by the university that uses separation membranes to capture CO2 directly from the atmosphere. The DAC developed by the university is a technology that uses nano-separation membranes, and is commonly known as m-DAC(R). This is the world's first technology to capture and concentrate CO2 simply by filtering air through a membrane, and if it can be developed into a device, it will be possible to capture CO2 in a variety of locations.

Until now, Kyushu University has carried out research and development with the support of the government's R&D system. But in the future, it will go beyond traditional joint research, and will also provide related equipment and facilities, and provide intellectual property rights. This is the first time the university has invested in and participated in a private company. The prototype of the CO2 recovery device is scheduled to be completed by the end of 2023, and after completion, it will continue to conduct demonstrations with multiple collaborating companies in order to commercialize m-DAC in the latter half of the 2020s. 

Sojitz website:
https://www.sojitz.com/en/news/2023/11/20231124.php

METI releases energy supply and demand results for FY 2022
The Ministry of Economy, Trade and Industry (METI) released comprehensive energy statistics for fiscal year 2022 on November 29. According to this, final energy consumption in fiscal 2022 was down 2.9% compared to the previous year. Looking at final energy consumption by sector, companies and offices decreased by 6.1%, while transportation increased by 4.0% and households increased by 0.5%.

Domestic supply of primary energy decreased by 2.3% compared to the previous year. While fossil fuels decreased by 1.9%, renewable energy (including hydropower) increased for the 10th consecutive year. Among fossil fuels, oil decreased by 2.0%, coal decreased by 1.9%, and natural gas and city gas decreased by 1.5%. Non-fossil fuels decreased by 4.4%, largely due to a 21.7% decrease in nuclear power, while renewable energy (excluding hydropower) increased by 2.8%, led by solar power. The non-fossil fuel share was 16.5%, lower than the previous year.

The amount of electricity generated was down 2.5% compared to the previous year. The composition of power generation is as follows: renewable energy (including hydropower) accounts for 21.7% (up 1.4%), nuclear power accounts for 5.6% (down 1.3%), and thermal power (excluding biomass) accounts for 72.7% (down 0.1%). The energy self-sufficiency rate (IEA base) was 12.6%, down 0.7% from the previous year.

CO2 emissions were down 2.9% compared to the previous year and 22.5% compared to fiscal 2013, the lowest since fiscal 1990. By sector, companies and other establishments decreased by 6.2%, while households increased by 1.4% and transportation increased by 3.9%.

METI website (in Japanese):
https://www.meti.go.jp/press/2023/11/20231129003/20231129003.html