Weekly Japanese Industry and Policy News (September 8-September 14, 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. 

Itochu participates in large storage battery business
Itochu Corporation announced on September 8 that it will participate in large storage batteries that can charge and discharge electricity from renewable energy. The company has partnered with Australia's Akaysha Energy, which operates storage batteries for power systems, and will participate in the storage battery business in up to 20 locations mainly in Japan by 2030. The shortage of free capacity on power transmission lines has become a serious problem, and output control measures that temporarily suppress the operation of renewable energy sources such as solar and wind power generation have spread across the country. If large storage batteries become widespread in Japan, it will lead to the effective use of renewable energy, which has lagged behind the United States and Europe.

Akesha, a subsidiary of the U.S. asset management company BlackRock, boasts one of the world's largest scales of started construction of storage batteries for electric power systems. Australia is building an energy storage facility with a capacity of 1.68 million kilowatt hours. Itochu will participate through investments and loans, mainly in Japan. The large-scale storage battery business, which will establish up to 20 locations by 2030, will be worth up to JP¥ 100 billion. The total capacity will be 1 million kilowatt hours, giving it a share of around 10 to 20% of Japan's renewable energy storage batteries.

The reason behind Itochu's full-scale rollout of large storage batteries is the government's decision to provide generous subsidies. The government will provide up to half of the subsidy for the development of battery storage systems for renewable energy. Itochu believes that although storage batteries have a limited lifespan, they can secure a certain level of profit by making use of government subsidies. The government envisions JP¥ 150 trillion in green transformation (GX) investment in the public and private sectors over the next 10 years. The plan is to strengthen support for the spread of large storage batteries.

Itochu website:
https://www.itochu.co.jp/en/news/press/2023/230908.html

Suzuki refines auto fuel from biogas derived from cow dung in India
On September 6, Suzuki announced that it will begin a demonstration project in India to refine methane, which can be used as automobile fuel, from biogas produced by fermenting cow dung. For demonstration purposes, four biogas production plants will be installed from 2025 onwards. To begin the demonstration, the company has agreed to mutually collaborate with India's National Dairy Development Board (NDDB) and Banas Dairy, a major Indian dairy manufacturer, through Suzuki R&D Center India, which is wholly owned by Suzuki.

Each new plant will be equipped with a biogas filling station. The methane produced will be sold as fuel for CNG vehicles, in which Maruti Suzuki, Suzuki's Indian subsidiary, has a market share of over 70%. The plant construction cost is expected to be around 2.3 billion rupees (JP¥ 4 billion). The company has positioned its biogas business in India as one of the initiatives in its growth strategy towards 2030. The Indian market is expected to continue growing, and even if CO2 emissions from products are reduced, an increase in total emissions is unavoidable. In light of this situation, the company has launched a full-scale production and supply business of biogas fuel using cattle manure, which is a large amount of dairy farm waste in rural India, as its own initiative.

SUZUKI website:
https://www.globalsuzuki.com/globalnews/2023/0906.html

Hitachi Systems visualizes forest CO2 absorption using satellite data
Hitachi Systems announced on September 7 that it has successfully conducted a demonstration experiment that uses satellite data to visualize the amount of CO2 absorbed by forests and calculate the amount of carbon credits created. The demonstration was done under the jurisdiction of the Ishinomaki District Forestry Association. Based on data obtained from satellite data, the amount of CO2 absorbed over the past 20 years was visualized, and by combining the visualized information with forest planning, the amount of carbon credits created was calculated. As a result, it was confirmed that it has the potential to absorb 22,500 tons of CO2 per year and create carbon credits worth up to JP¥ 260 million.

The satellite data used in the demonstration is provided by the French company EverImpact. The company monitors GHG emissions using satellite data and ground sensor data. The company is currently developing a real-time carbon monitoring solution and starting trial operations in Europe and Asia. Additionally, the demonstration experiment adopted the ``Voluntary Credit VCS (Verified Carbon Standard)'' certified by Verra, an American NPO that boasts an approximately 70% share of the voluntary credit market.

Japan, where 70% of its land is covered by forests, have the potential to create carbon credits through the use of nature, but many forests are left undeveloped and underutilized. In the future, the company aims to expand this service nationwide, and aims to solve forest-related issues, revitalize the forestry industry, and promote decarbonization in Japan.

Hitachi Systems website (in Japanese):
https://www.hitachi-systems.com/news/2023/20230907.html

Sanyo Special Steel completes "carbon-free hydrogen plant" at European subsidiary
Sanyo Special Steel announced on September 7 that its European subsidiary Ovako has completed construction of a carbon-free hydrogen plant at its Hofors factory in Sweden. The plant has the capacity to produce approximately 4,000 cubic meters of carbon-free hydrogen per hour through water electrolysis using fossil-free electricity.

By converting the fuel for the heating furnace at the Haforsh factory, which previously used LPG etc., to carbon-free hydrogen, it will be possible to reduce CO2 generated in the heating process by approximately 50% (approximately 20,000 tons/year). In addition to supplying hydrogen generated at the plant to fuel cell trucks, which will be the first step in building hydrogen infrastructure that can be used in the transportation sector in the future, it will also contribute to improving the stability of the power grid and using waste heat for district heating.

The plant was built with financial support from the country's government and the participation of a consortium of four leading local companies (Volvo Group, Hitachi Energy, H2 Green Steel and Nel Hydrogen), making it one of the largest facilities in Europe.

Sanyo Special Steel website:
https://www.sanyo-steel.co.jp/system/upload/news_en/20230907_en.pdf

Suzuki begins joint research with Shizuoka University on microplastic identification technology
On September 11, Suzuki announced that it will begin joint research with Shizuoka University on microplastic identification technology that utilizes the adsorption and coloring properties of proteins to plastics. Suzuki has developed a microplastic collection device (MPC) that can be installed on outboard motors, and began selling it as standard equipment on some models from July 2022. In addition to microplastics, MPC's collected materials also include sand, wood chips, and tiny marine organisms. Sorting must be done manually and visually, which requires experience and skill.

The protein used in this research has the property of adsorbing to plastic and coloring it. Also, the colors vary depending on the combination of protein and plastic. Utilizing this characteristic, it will be possible to identify collected microplastics and accurately determine their type in a short period of time. By putting this discrimination technology into practical use, it will be possible in the future to visualize the amount and type of plastic collected using image recognition.

SUZUKI website:
https://www.globalsuzuki.com/globalnews/2023/0911.html

Honda, BMW Group and Ford Motor established new company ChargeScape in North America
American Honda Motor, Honda's U.S. subsidiary, announced on September 12,
it has agreed with BMW Group and Ford Motor Company to establish ChargeScape, a new company which will provide energy services that utilize EVs and contribute to stabilizing power networks. ChargeScape provides a common information platform that connects multiple automakers with numerous electric utilities in the United States and Canada. Through this, EVs from each automaker will be efficiently connected to the power network, and they aim to stabilize the power network with a wide range of adjustment capabilities that take advantage of the scale of the number of EVs. This stabilization will also maximize the use of renewable energy-derived power in the power network, contributing to the reduction of carbon dioxide emissions, as well as reducing charging fees for EV users and costs for power companies.

As the sales of EVs and the development of charging infrastructure are gaining momentum mainly in the United States, stabilizing the power supply is a major issue, while connecting EVs and power networks is also expected to be an opportunity to create new business. Through an activity called the Open Vehicle-Grid Integration Platform (OVGIP), the three companies have built a platform that aggregates information held by electric power companies and automobile manufacturers. With this investment from ChargeScape, they will further develop and accelerate this initiative. The three companies also welcome a wide range of other automakers to join the effort once ChargeScape begins full-scale operations.

Honda website:
https://global.honda/en/newsroom/news/2023/c230912eng.html?from=latest_area