Weekly Japanese Industry and Policy News (October 6-October 12, 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. 

METI, JOGMEC and PETRONAS have concluded MOC on CCS businesses
On October 6, the Ministry of Economy, Trade and Industry (METI), Japan Energy and Metals and Minerals Corporation (JOGMEC) and Malaysian national oil company (PETRONAS) announced that they have signed a memorandum of cooperation (MOC) on cross-border transport and storage of carbon dioxide to realize a bilateral CCS project between Japan and Malaysia that will contribute to reducing greenhouse gas emissions. 

Malaysia, which has a variety of resources, has long been an important partner for Japan, and many energy projects involving Japanese companies have progressed. Among these, Malaysia is rich in suitable land for underground storage of carbon dioxide (CO2), so a project is being considered to transport and store CO2 emitted by Japanese industries to the country.

In order to transport CO2 cross-border to Malaysia, it is necessary for the two countries to discuss the rules and how to calculate the amount of CO2 reduction. Therefore, METI, JOGMEC and PETRONAS signed an MOC at the 3rd Asian CCUS Network Forum (held in Hiroshima in this September) in order to promote discussions on cross-border CO2 transport and storage between the two countries. 

METI website:
https://www.meti.go.jp/english/press/2023/1006_002.html

Japanese and Australian governments confirm stable LNG supply and promotion of decarbonization investment
October 8, Minister of Economy, Trade and Industry (METI) Nishimura, who visited Australia, met with Minister of Trade and Tourism Farrell, Minister of Climate Change and Energy Bowen, and Minister of Resources King in Melbourne. During these talks, they agreed to ensure a stable supply of resources such as LNG and coal and a reliable investment environment, continue cooperation to strengthen supply chains for important minerals, and expand the scope of cooperation to contribute to the decarbonization of the Asian region by the innovation of hydrogen, ammonia, CCUS, etc. After the dialogue, a joint statement was issued.

Regarding the Trans-Pacific Partnership (TPP), the governments also confirmed that they will closely monitor whether countries and regions applying for new membership are taking measures that violate the purpose of the agreement, such as economic coercion. China, Taiwan, Ukraine, and others have applied to join the TPP. Furthermore, Minister Nishimura and Minister Farrell witnessed the signing of a Memorandum of Understanding between the Japan External Trade Organization (JETRO) and the Australian Trade and Investment Promotion Agency. The two organizations agreed to strengthen support for startups expanding into the Indo-Pacific region, including island countries.

METI website (in Japanese):
https://www.meti.go.jp/press/2023/10/20231008001/20231008001.html

Ministry of the Environment certifies 122 biodiversity conservation areas
On October 6, the Ministry of the Environment announced that it will start a system in 2023 to certify areas where biodiversity is being conserved through private initiatives as "sites in harmony with nature” and 122 locations (35 prefectures) have been certified.

At the 15th Conference of the Parties to the Convention on Biological Diversity (CBD-COP15), the Kunming-Montreal Biodiversity Framework, a new global goal for 2030, was adopted. Based on this global goal, Japan has set a goal (30 by 30 goal) to effectively conserve at least 30% of land and sea as healthy ecosystems by 2030. The recent designation of sites in harmony with nature is in response to this trend, and the total area of the 122 designated sites is approximately 77,000 hectares, which is larger than the 23 wards of Tokyo.

Those selected for this certification include Asahi Group Japan's Asahi Forest Konomurayama (Hiroshima Prefecture) and Seven-Eleven Memorial Foundation's Hannan Seven Sea Forest (Osaka Prefecture). In addition, the Ministry of the Environment plans to register areas that do not overlap with protected areas in an international database as OECM (Other Effective area-based Conservation Measures).

MOE website:
https://policies.env.go.jp/nature/biodiversity/30by30alliance/documents/3030emap.pdf

MOE website (in Japanese):
https://www.env.go.jp/press/press_02179.html

NIES and the University of Tokyo develop a model to estimate the impact of the circular economy over 30 years
The National Institute for Environmental Studies (NIES) and the University of Tokyo announced on October 2 that they have developed a consumer behavior simulation model to pre-evaluate circular economy initiatives. This model can reflect consumer behavior that does not necessarily follow economic rationality, but is strongly influenced by social influences such as word of mouth, and has diverse preferences.

This model is the world's first to apply the "agent-based simulation" method to circular economy measures. By case study using the developed simulation model, the research team estimated the future "environmental impact" such as greenhouse gas emissions and "circularity" such as the amount of waste generated over a 30-year period due to the introduction of the measures, and it was successful.

By using this model, they can evaluate circular economy initiatives at an early stage before they become widespread in the real world. It also makes possible to design products and services that are carbon-free, circular, and widely accepted by consumers, and create policies to support. 

National Institute for Environmental Studies website (in Japanese):
https://www.nies.go.jp/whatsnew/2023/20231002/20231002.html

Nippon Sheet Glass launches low carbon glass in Europe that reduces CO2 emissions by 50%
Nippon Sheet Glass will sell architectural glass in Europe that emits 50% less carbon dioxide (CO2) than conventional products. In addition to using alternative fuels, it has increased the use of recycled products. It is responding to the movement to reduce emissions throughout the life cycle, from architectural design to disposal. The company will manufacture and sell new products at its UK glass manufacturing facility. In addition to alternative fuels, renewable electricity is also used to reduce CO2 emissions during manufacturing.

In the construction industry, there is a need to reduce CO2 emissions throughout the life cycle of buildings, from material production and construction to collection. Although the new product is more expensive, the company believes there will be demand from customers who want to reduce emissions during the manufacturing stage of materials. At this time, there are no plans to sell new products in Japan. This is because CO2 is emitted during transportation from glass manufacturing facilities in the UK. The company sells the product if Japan's glass manufacturing equipment continues to switch fuels.

NSG website:
https://www.nsg.com/en/media/ir-updates/announcements-2023/low-carbon-glass#

METI assists JP¥ 30.6 billion for batteries for electric aircraft
On October 10, the Ministry of Economy, Trade and Industry (METI) announced a proposal to support the development of equipment for electric aircraft. JP￥30.6 billion will be subsidized for the development of hydrogen fuel cells and fuel-efficient engine equipment. The plan is to allocate JP¥ 17.3 billion to the development of hydrogen fuel cell systems and JP¥ 13.3 billion to areas such as engine control systems with high fuel efficiency. The METI will publicly recruit business operators by the end of this year. Companies such as IHI and Kawasaki Heavy Industries have strengths. This was decided at the Industrial Structure Council held on the same day. Demonstration tests are expected to be conducted by 2030.

The METI has already decided to provide approximately JP¥ 21 billion in support for equipment development for hydrogen aircraft that generate propulsion by burning hydrogen in engines. The airline industry has set a goal of reducing emissions from international flights to virtually zero by 2050. Europe's Airbus and other companies are aiming to commercialize electric aircraft as early as 2035. METI is working on next-generation machines, aiming to promote Japan's hydrogen fuel cells and other products, and working to standardize the developed equipment internationally.

METI website (in Japanese):
https://www.meti.go.jp/shingikai/sankoshin/green_innovation/industrial_restructuring/pdf/020_06_00.pdf

Memorandum of understanding between UK and Marubeni on clean energy
On October 11, the UK government and Marubeni signed a memorandum of understanding regarding clean energy such as offshore wind power generation. Marubeni and its partners will invest around £10 billion (approximately JP￥1.83 trillion) in clean energy in the UK over the next 10 years. A consortium of British companies and others has already won the development rights for one of the world's largest floating offshore wind farms planned by the British Scottish government.

In September, the UK and Japan established the UK-Japan Strategic Economic and Trade Policy Dialogue, a framework for ministerial dialogue to discuss economic security. In July, the UK's participation in the Trans-Pacific Partnership (TPP) was formally approved by member countries. The UK has cited clean energy, digital, and defense as areas in which it aims to strengthen cooperation with Japan.

Marubeni website:
https://www.marubeni.com/en/news/2023/release/00100.html

Japan, UK, Korea and the World Bank form a new framework for renewable energy supply networks
Five countries, including Japan, the UK and South Korea, have launched a new framework to help emerging countries strengthen their supply chains in the renewable energy sector. A fund will be established at the World Bank, and each country will contribute funds. They will support emerging countries to handle everything from mining resources for electric vehicles (EVs) and solar panels to commercialization in its own country. The new framework is called the Partnership for Resilient and Inclusive Supply-chain Enhancement (RISE). Participating countries such as Japan and the World Bank held a launch event in Marrakech, Morocco on October 11.

In addition to Japan, Britain, and South Korea, Canada and Italy announced their participation. Japan contributed $25 million, bringing the total to more than $40 million. The target countries for assistance are assumed to be emerging and developing countries in the so-called “Global South,'' such as Asia, Africa, and Central and South America. Chile and India attended the event as representatives of candidate countries eligible for assistance. The Japanese government and the World Bank call for the wide participation of relevant countries with the stance of an ``open framework.'' The new framework was agreed upon by the G7 at a meeting of finance ministers and central bank governors in May.

From the perspective of economic security, this partnership eliminates the bias in production systems to specific countries and stably procure important supplies. They will provide technological and financial support so that emerging countries, which have until now focused on resource extraction, can take on highly profitable processes such as processing, refining, and assembly. The reason behind this is the country's dependence on China for the processing of minerals such as rare earths and lithium used in EVs. It has been pointed out that there is a risk of supply disruption in the event of export restrictions or natural disasters. Reliance on China is also increasing in the market for renewable energy products such as solar panels and EVs.

MOF website:
https://www.mof.go.jp/english/policy/international_policy/mdbs/wb/20231011.html

Toyota and Idemitsu collaborate on mass production of all-solid-state batteries
Toyota Motor Corporation and Idemitsu Kosan announced on October 12 that they will collaborate to mass produce next-generation "all-solid-state batteries" for electric vehicles (EVs). The two companies aim to begin operation of demonstration equipment in 2027 to introduce vehicles equipped with all-solid-state batteries, and to establish mass production technology from 2030 onwards. The speed of development will be accelerated through collaboration with Idemitsu, which has knowledge of material manufacturing technology.

This time, the two companies are collaborating on a sulfide-based solid electrolyte, which has the advantage of being soft and easy to bond with other materials, making it easy to mass-produce. Toyota and Idemitsu have been conducting joint research on solid electrolytes since 2013. Toyota plans to launch an EV equipped with solid-state batteries in 2027 to 2028. The vehicle currently under development is capable of charging in less than 10 minutes and having a cruising range of approximately 1,200 kilometers.

Toyota plans to increase global sales of EVs to 1.5 million units in 2026 and 3.5 million units in 2030. However, even after all-solid-state batteries are put into practical use, they are expected to be limited to only a few high-end models for the time being, and the company is also progressing with the development of inexpensive lithium iron phosphate (LFP) batteries. The company plans to prepare a large lineup of batteries to capture a wide range of demand.

Toyota website:
https://global.toyota/en/newsroom/corporate/39865919.html

METI and NEDO hold the 10th Innovation for Cool Earth Forum (ICEF) Annual General Meeting
On October 4 and 5, the Ministry of Economy, Trade and Industry (METI) and the New Energy and Industrial Technology Development Organization (NEDO) held a hybrid annual meeting of the 10th Innovation for Cool Earth Forum (ICEF). With the main theme of "Innovation for Just, Secure and Sustainable Global Green Transformation (GX)," discussions were held on the innovations necessary for the world to move toward carbon neutrality despite the various challenges it faces. Approximately 1,700 people from 79 countries and regions registered to participate.

ICEF is an international platform established in 2014 through the initiative of Japan, and is an international platform that brings together ministers from around the world, experts and leaders leading in various fields to solve climate change issues through innovation in the energy and environmental fields. The aim is to encourage discussion and cooperation between academia, industry and government stakeholders.

The forum saw global leaders in energy and environment-related fields take the stage in 15 sessions. Among them were Dr. Noguchi Soichi, astronaut; Prof. Steven Chu, former U.S. Secretary of Energy; Mr. Jean-Eric Paquet, Ambassador of the European Union to Japan; Prof. Andrew Fire; Sir Paul Nurse; Dr. Marcia McNutt, President of the National Academy of Sciences of the United States; and Prof. Phoebe Koundouri, President of EAERE. In each plenary and technology session, people from the younger generations (young innovators) participated in the discussions.

The secretariat has also released a draft roadmap (AI and climate change mitigation) that recommends paths and methods for major innovative technologies that will contribute in the short and long term to achieving carbon neutrality. The roadmap will reflect public comments and will be officially announced at COP28 (28th Conference of the Parties to the United Nations Framework Convention on Climate Change) to be held in the United Arab Emirates in December 2023.

METI website:
https://www.meti.go.jp/english/press/2023/1006_004.html