Weekly Japanese Industry and Policy News (October 27-November 2, 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. 

Japan-EU agreement in principle on free data flow
On October 28, Japan and the European Union (EU) reached an agreement in principle to establish regulations regarding the free flow of data across borders. Ensuring the free flow of data and prohibiting measures that impede the flow, such as requests for domestic storage of data. The establishment of rules will make it easier for Japanese companies to expand their business in Europe, leading to the revitalization of digital trade, including internet transactions.

At the high-level economic dialogue between Japan and the EU held in conjunction with the G7 trade ministers' meeting, Minister of Economy, Trade and Industry (METI) Nishimura, Minister of Foreign Affairs (MOFA) Kamikawa, and Valdis Dombrovskis, Executive Vice President of the European Commission for An Economy that Works for People, European Commissioner for Trade agreed in principle. Japan is advocating the realization of reliable and free data flow (DFFT), and is considering expanding the number of countries and regions that support the common provisions between Japan and the EU. 　

International rules for data distribution are also being negotiated at the World Trade Organization (WTO), but no agreement has been reached due to differences in the positions of each country. Japan is calling on all countries to realize the “Dependable and Free Flow of Data (DFFT)” and is looking to expand the number of countries and regions that support it, using common rules with the EU as a successful example.

METI website (in Japanese):
https://www.meti.go.jp/press/2023/10/20231028004/20231028004.html

Mitsui O.S.K. Lines collaborates with German company on e-methanol
Mitsui O.S.K. Lines (MOL) announced on October 25 that it has signed a memorandum of understanding with Hy2gen Deutschland GmbH, a subsidiary of German renewable energy company Hy2gen AG, to jointly explore the use of e-methanol. The aim is to use it as marine fuel for maritime transportation. E-methanol is a clean energy produced by synthesizing recovered CO2 and hydrogen produced from renewable energy. Compared to conventional marine fuels such as heavy oil, it can reduce CO2 emissions by up to 15% and sulfur oxide (SOX) emissions by up to 99%.

Hy2gen specializes in all products using green hydrogen, including e-methanol and green ammonia using hydrogen derived from renewable energy, and hydrogen-based synthetic aviation fuel. Production of e-methanol is scheduled to begin in 2028 in Lower Saxony, Germany, and the companies plan to use the fuel as marine fuel for maritime transport in the Atlantic region. Annual production volume has not yet been determined.

Mitsui O.S.K. Lines is currently aiming to achieve net-zero GHG emissions by 2050, and is promoting the introduction of clean alternative fuels as one of its main strategies to achieve this goal. As a milestone, the company aims to launch 90 LNG and methanol-fueled ocean-going vessels by 2030. 

MOL website:
https://www.mol.co.jp/en/pr/2023/23135.html

TDK collaborates with Swiss giant on next-generation current sensor
TDK announced on October 25 that it will collaborate with Swiss major LEM on the development of next-generation current sensors. With the electrification of automobiles and the spread of renewable energy, there is a need for sensors that can detect current with higher accuracy. TDK has strengths in "TMR elements" (TMR: tunnel magnetoresistance) used in high-performance sensors. LEM aims to incorporate this element and commercialize a new sensor in the mid-2020s.

The company will develop a "next-generation semiconductor current sensor." LEM is one of the major manufacturers of current sensors, and is particularly strong in applications for automobiles and industrial equipment such as renewable energy equipment. TDK will provide customized TMR elements for LEM. By using the same element, it is possible to increase detection accuracy and reduce power consumption compared to conventional devices. TDK has applied the technology it has cultivated in hard disk drive (HDD) parts to commercialize the world's first highly sensitive automotive sensor using TMR elements.

TDK website:
https://www.tdk.com/en/news_center/press/20231025_01.html

G7 Trade Ministers Meeting adopts statement calling for elimination of unnecessary trade restrictions
The G7 Trade Ministers Meeting was held in Osaka from October 28 to 29, and concluded with the adoption of a ministerial statement. The themes of the meeting were: (1) trade and sustainability, (2) ensuring a level playing field, (3) WTO 13th Ministerial Conference (MC13), and (4) economic coercion and strengthening supply chains. In addition to the four sessions held, an outreach session (a session on supply chain resilience involving invited countries/organizations and private companies) was held for the first time at a G7 trade ministers' meeting.

Bearing in mind China's suspension of imports of Japanese marine products, the statement said, “the G7 strongly urge that any measures that unnecessarily restrict trade be immediately abolished.'' After the discharge of treated water from the Tokyo Electric Power Company's Fukushima Daiichi Nuclear Power Plant into the ocean, calls for the abolition of import restrictions were included for the first time in the outcome document of an international conference.
Regarding strengthening the supply chain for important minerals such as lithium, which is used in electric vehicle batteries, and semiconductors, it said, “the G7 condemn the act of weaponizing economic dependence” and also confirmed that they would accelerate cooperation with countries other than the G7. 

METI website:
https://www.meti.go.jp/press/2023/10/20231029001/20231029001-a.pdf

METI signs memorandum of cooperation on critical minerals with Department for Business and Trade of UK
On October 28, Minister of Economy, Trade and Industry Nishimura met with the Minister of Business and Trade from Beydenoch, UK, at the G7 Trade Ministers' Meeting in Osaka, and signed a Memorandum of Cooperation on Critical Minerals. This is the first time for Japan to sign a memorandum of cooperation between consuming countries regarding important minerals. Through this memorandum of cooperation, it is expected that cooperation between the Japanese and British governments and companies will be strengthened.

The main points of this memorandum of cooperation are as follows. 
-    Collaboration in research and innovation
-    Responsible sourcing and processing of critical raw materials
-    Building a strong, transparent and sustainable supply chain
-    Identification of alternative materials, manufacturing and recycling technologies, and business models to achieve a circular economy.
-    Cooperation towards building a highly transparent market through improving information sharing and traceability, etc.
-    Encouraging partnerships between companies and industry organizations from both countries to diversify supply chains, and leveraging private finance for joint investment in UK-Japanese or third-country projects.
-    Sharing information on infrastructure projects to enable private companies to invest in third countries with peace of mind.
-    Cooperation to improve the midstream capabilities of developing countries through university exchanges, etc.

METI website (in Japanese):
https://www.meti.go.jp/press/2023/10/20231028005/20231028005.html

Toyota to invest additional JP￥1.2 trillion in US EV battery factory
Toyota Motor Corporation announced on October 31 that it will invest approximately $8 billion (approximately JP¥ 1.2 trillion) in an in-vehicle battery factory currently under construction in North Carolina, USA. The total investment for the plant will be approximately $13.9 billion. It will strengthen its own factory's production system and urgently secure the batteries we need in North America.

The company will launch eight new production lines for electric vehicles (EVs) and plug-in hybrid vehicles (PHVs), bringing the total to 10 by 2030. There are also plans to install four for hybrid vehicles (HV). It has an annual production capacity of more than 30 gigawatt hours and will be installed in EVs and other sports utility vehicles (SUVs). In current EV terms, this is equivalent to about 400,000 vehicles.

The battery factory is scheduled to begin operations in 2025. Toyota Tsusho, which has a 10% stake in the plant, announced on the 1st that it will cover approximately $370 million of the approximately $8 billion additional investment. With the additional investment, 3,000 new people will be hired, making the factory a workforce of over 5,000 people. Toyota plans to increase global EV sales to 1.5 million units in 2026 and 3.5 million units in 2030. Sales in 2022 were 24,000 units, it needs to increase by more than 60 times over the next four years.

Toyota website:
https://pressroom.toyota.com/toyota-supercharges-north-carolina-battery-plant-with-new-8-billion-investment/

AGC manufactures glass using hydrogen fuel
AGC announced on October 26 that it had successfully conducted a demonstration test of glass manufacturing using hydrogen as fuel. This is the group's first test using hydrogen in an actual production reactor. In the future, it will consider tests that scale up the combustion capacity of hydrogen combustion burners, as well as demonstration tests at overseas bases. After determining the scope of use of hydrogen combustion technology, it aims to introduce it on a full scale.

In the demonstration test, Japan Air Liquide's hydrogen combustion burner was introduced into part of the conventional oxyfuel combustion process that uses city gas as fuel to produce special glass for displays such as those used in smartphones. It examined the technical issues involved in utilizing hydrogen, such as the quality of glass, the effect on furnace materials, flame temperature, and temperature inside the furnace. In this demonstration test, it was possible to maintain the temperature of the glass melting furnace at an appropriate level while suppressing the concentration of nitrogen oxides (NOx) contained in the exhaust gas to the same level as when burning city gas exclusively.

AGC website:
https://www.agc.com/en/news/detail/1205304_2814.html

Hitachi Energy acquires Spain's eks Energy to strengthen energy storage business
Hitachi Energy (Zurich, Switzerland), a subsidiary of Hitachi announced on October 24 that it has acquired eks Energy, a Spanish power conversion and control solutions company. Respond to accelerating global demand by strengthening our portfolio of energy storage systems.

With this acquisition, Hitachi Energy will combine its automation technology, software, and system integration capabilities with eks Energy's advanced power conversion and control solutions to become a pioneering technology provider in the renewable energy and energy storage systems market. The idea is to further strengthen its position as a company. As renewable energy continues to expand around the world, demand for battery energy storage systems (BESS) continues to rapidly increase.

HITACHI Energy website:
https://www.hitachi.com/New/cnews/month/2023/10/231024a.pdf