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The EU Japan Centre is releasing a weekly press review covering Japan's economic and policy matters.
Economic News
▶ Japan to obligate up to 400 major firms to join CO2 emissions trading
22 Nov, 2024
The Japanese government plans to introduce a carbon emissions trading system starting in April 2026, targeting 300 to 400 major companies that emit 100,000 tons or more of CO2 annually. The system will cover about 60% of Japan's domestic greenhouse gas emissions, including industries like electricity, steel, cars, and airlines. Companies will receive free emissions quotas, but if they exceed their limit, they must buy additional quotas, while those with surplus can sell them. This system aims to reduce emissions, though it could increase costs for consumers.
Mainichi: https://mainichi.jp/english/articles/20241122/p2g/00m/0sc/048000c
▶ The First Meeting of the Japan-Germany Economic Security Consultations
22 Nov, 2024
On November 21, 2024, Japan and Germany held their first Economic Security Consultations in Berlin, a framework established to strengthen cooperation on maintaining a fair international economic order. The meeting, co-chaired by officials from Japan's Ministry of Foreign Affairs and Ministry of Economy, Trade, and Industry, and Germany's Federal Ministry for Economic Affairs and Climate Action, focused on issues like supply chain resilience, economic coercion, and the protection of critical technologies. Both countries agreed to deepen their cooperation and exchange expertise on economic security matters.
MOFA: https://www.mofa.go.jp/erp/c_see/de/pageite_000001_00001.html
▶ Welfare ministry eyes relaxing system cutting elderly workers' pensions
The Ministry of Health, Labour and Welfare (MHLW) in Japan is adjusting the eligibility criteria for the "Working Pension System" to allow elderly individuals with higher income to receive full pension benefits. The threshold for the combined total of wages and pension will be raised from 500,000 JPY to 620,000 JPY per month, expanding the number of seniors eligible for full pension payments. This move aims to eliminate the "work penalty," encouraging more seniors to continue working and addressing labour shortages. Three proposals were presented at a meeting of the Social Security Council, including raising the threshold to 620,000 JPY, 710,000 JPY, or eliminating the system altogether. The government plans to introduce related pension reforms in the regular Diet session next year.
Kyodo (Japanese): https://nordot.app/1233885544901854042?c=39550187727945729
MHLW (Japanese): https://www.mhlw.go.jp/content/12401000/001337884.pdf
▶ Japan eyes cutting emissions by 60% by FY 2035 from FY 2013 levels
26 Nov, 2024
The Japanese government is considering a target to cut greenhouse gas emissions by 60% by fiscal 2035 compared to 2013 levels, an increase of 14 percentage points from the current goal. This proposal, made by the Environment Ministry and the Economy, Trade and Industry Ministry, is part of Japan’s efforts to achieve net zero emissions by 2050. The target will be included in a draft plan for global warming countermeasures, to be finalized by the end of the year. Japan currently aims for a 46% reduction by fiscal 2030. The U.N. climate panel has called for a 60% reduction in global emissions by 2035 compared to 2019 levels to limit global warming.
▶ Japan considers promoting the use of perovskite solar cells for energy
26 Nov, 2024
Japan's industry ministry plans to promote perovskite solar cells to generate 20 gigawatts of electricity by 2040, aiming to boost renewable energy. The initiative will be included in the updated energy program by March 2024. These flexible, lightweight solar cells will be subsidized starting in fiscal 2025 to offset their higher costs. Sekisui Chemical plans to commercialize them in 2025, with installations in Tokyo high-rises.
Japan Times: https://www.japantimes.co.jp/news/2024/11/26/japan/science-health/perovskite-solar-cells-promotion/
▶ Japan, South Korea struggle to reduce reliance on China tech materials
27 Nov, 2024
Japan is striving to reduce its dependence on China for key tech materials like hydrofluoric acid, crucial for chipmaking and battery production. Sojitz, a Tokyo-based trading house, is collaborating with Mexichem Fluor to build a plant in Kyushu to process fluorspar into anhydrous hydrogen fluoride, aiming to meet 40% of Japan's annual demand. This project is part of a broader push by Japan and other countries to diversify supply chains, fueled by political uncertainty and initiatives like the U.S. Inflation Reduction Act. However, challenges persist due to China's cost advantage in materials production and ongoing economic volatility, with some industries remaining heavily reliant on Chinese supplies.
Nikkei Asia: https://x.gd/eusjy
▶ Ministry to widen disclosure rules on ratio of female managers
27 Nov, 2024
Japan's Labor Ministry plans to require companies with 101 or more employees to disclose the ratio of women in management positions. The proposal, discussed on Nov. 26, aims to promote gender equality in the workplace. The ministry also plans to extend the law promoting women’s advancement for another 10 years, as it is set to expire in 2026. While listed companies already disclose gender ratios, the new policy will extend this requirement to unlisted companies. Employers have expressed concerns about added paperwork, but the policy is expected to help address labor shortages. Additionally, companies with 101 or more employees will be required to disclose wage disparities between genders.
Asahi: https://www.asahi.com/ajw/articles/15526012
▶ 200 million yen prize for bold ideas in quantum computing test
27 Nov, 2024
The New Energy and Industrial Technology Development Organization (NEDO) announced a competition in which participants will use quantum computing to address major societal issues in Japan, such as natural disasters and the aging population. The contest, with a prize pool of about 200 million yen, invites individuals and groups from various fields, even those without quantum computing experience, to participate. Free courses will be offered to help participants gain the necessary knowledge. The competition starts in March 2025, with final judging in August 2026. Public suggestions for the issues to be tackled are being accepted until December 13.
Asahi: https://www.asahi.com/ajw/articles/15497153
NEDO Challenge (Japanese): https://qc-challenge.nedo.go.jp/
Business News
▶ Tokyo Gas and Honda Introduce Solar Power Systems and Lithium-Ion Battery Storage at Kumamoto Factory and Hosoe Outboard Motor Plant
22 Nov, 2024
Tokyo Gas Engineering Solutions (TGES) has partnered with Honda to install large-scale solar power and lithium-ion battery storage at Honda's Kumamoto Factory and Hosoe Outboard Motor Plant. The Kumamoto Factory now features Japan’s largest lithium-ion battery (20,000 kWh) and 7,100 kW of solar power, with more planned for 2025. The Hosoe Plant has installed 1,800 kW of solar power, with a 2,000 kWh battery to follow in 2025. These systems will optimize renewable energy use, reducing CO2 emissions by 5,500 tons. The project is part of TGES's "IGNITURE" solutions brand for sustainable operations.
Tokyo Gas (Japanese): https://www.tokyo-gas.co.jp/news/press/20241122-01.html
▶ MHI Thermal Systems Receives Order from Aisan Industry for Aquifer Thermal Energy Storage System for Its New Anjo Plant
25 Nov, 2024
Mitsubishi Heavy Industries Thermal Systems has received an order from Aisan Industry for a large-scale Aquifer Thermal Energy Storage (ATES) system for its new Anjo Plant, marking the first practical use of ATES in the Chubu region. The system, which includes energy-efficient heat pump-type centrifugal chillers, will provide both heating and cooling while significantly reducing CO2 emissions by about 50%. The system utilizes underground aquifers for seasonal heat storage and is scheduled to start operations in winter 2025. This project supports Aisan Industry's goal of achieving carbon neutrality at the plant.
Mitsubishi Heavy Industries: https://www.mhi.com/news/241125.html
▶ Ricoh to shift some China production to Thailand to avoid Trump duties
25 Nov, 2024
Ricoh plans to shift part of its multifunction printer production from China to Thailand to avoid the 60% tariff on Chinese imports threatened by U.S. President-elect Donald Trump. Sales to the U.S. make up 20% of Ricoh's global revenue. The company will move production of A4 multifunction printers to Thailand, where it has been manufacturing A3 printers for North America since 2019. Ricoh will continue making some printers in China for other regions like Japan and Europe. The company is also expediting exports from China to North America before tariffs are imposed. Japanese investment in China has been declining, while investments in Southeast Asia and North America are increasing.
Nikkei Asia: https://x.gd/l0pMP
▶ Epsilon S Rocket Explosion Occurs during Engine Combustion Test; Marks Second Incident since Combustion Test Accident in July 2023
26 Nov, 2024
An explosion occurred on Tuesday morning during a ground combustion test of the second-stage engine of Japan's Epsilon S rocket at the Tanegashima Space Center. The explosion, caused by abnormalities during the test, resulted in no injuries, but the incident has delayed the planned 2024 launch of the rocket. This is the second such accident, following a similar explosion in July 2023 during a test at the Noshiro Rocket Testing Center. JAXA is investigating the cause, having previously identified heat-related issues with the ignition device and made modifications for the latest test.
Yomiuri: https://japannews.yomiuri.co.jp/society/general-news/20241126-224488/
▶ Japan's Murata projects lower margins with eye on capacitor market share
26 Nov, 2024
Murata Manufacturing is lowering its midterm target for operating profit margin, now aiming for at least 18% by fiscal 2027, down from the previous 20% target. This revision is due to heightened price competition in the multilayer ceramic capacitor (MLCC) market, where Murata holds a 40% global share, with Apple as a key client. MLCCs, which stabilize current in electronic devices, are crucial components in smartphones, with the latest models containing around 1,000. While Japanese companies like Murata, Taiyo Yuden, and TDK dominate the market, competitors such as Samsung Electro-Mechanics, Taiwan's Yageo, and Chinese manufacturers are gaining ground. Murata, known for its miniaturization expertise, is seen as five years ahead of Asian competitors in technology. The company aims for 43% market share by 2030 and is investing in next-generation MLCCs for AI-equipped devices.
Nikkei Asia: https://x.gd/1ExVz
▶ Mitsubishi Electric Develops Compact, High-energy Sub-nanosecond-pulse Deep-ultraviolet Laser System
26 Nov, 2024
Mitsubishi Electric, in collaboration with RIKEN and IMS, has developed a high-energy, short-pulse deep ultraviolet (DUV) laser system with an output of 235 millijoules, the world's highest pulse energy. The compact system, installed at RIKEN's facility, is used for accelerator research. It achieves sub-nanosecond pulses using a microchip laser and operates at room temperature thanks to a high-heat dissipation chip. Mitsubishi Electric plans to continue advancing laser acceleration technology and miniaturization for broader technological applications.
Mitsubishi Electric: https://www.mitsubishielectric.com/news/2024/1126.html
PDF (in detail): https://www.mitsubishielectric.com/sites/news/2024/pdf/1126.pdf
▶ Japan's NYK Line eyes world's largest ship recycling operation
26 Nov, 2024
Nippon Yusen (NYK Line) plans to begin ship dismantling and recycling high-purity iron by 2028, aiming to handle 20 vessels annually. The company is partnering with Oono Associates to refurbish a dry dock in Aichi, Japan, with large machinery to minimize human labor. The facility will target recycling 300,000 tonnes of scrap iron per year. While Bangladesh and India lead global ship dismantling, their facilities rely on manual labor, which can be hazardous. NYK's new facility will process merchant ships, Japan's military and coast guard vessels, and large marine structures.
Nikkei Asia: https://x.gd/pQtFA
▶ Commencement of Operations at Aichi Tahara Biomass Power Plant
26 Nov, 2024
Marubeni Corporation has completed the Aichi Tahara Biomass Power Plant in collaboration with Enewill Corporation and Osaka Gas. The 74,950 kW wood-fired biomass plant, which began commercial operations on November 26, is expected to generate approximately 530 million kWh of electricity annually. This project aligns with Marubeni's goal of strengthening its green business and contributing to a decarbonized society as part of its Mid-Term Management Strategy (GC2024).
Marubeni: https://www.marubeni.com/en/news/2024/info/00055.html
▶ ITOCHU Announces Partnership with Belong and Google for Sales of Certified, Refurbished Google Devices
26 Nov, 2024
ITOCHU Corporation has partnered with Google and Belong Inc. to launch Japan's first certified refurbished Google device business. This initiative is aimed at the growing used smartphone market, with certified refurbished products offering quality comparable to new devices at affordable prices. The partnership aligns with efforts to promote resource efficiency and reduce waste. Belong, specializing in used mobile devices since 2019, will sell refurbished Google devices starting November 26, 2024, ensuring quality through certified repairers and rigorous testing. This move supports ITOCHU's commitment to sustainable business practices and the SDGs.
Itochu: https://www.itochu.co.jp/en/news/press/2024/241126.html
▶ Government to pump another 800 billion yen into Rapidus
28 Nov, 2024
The Japanese government plans to allocate an additional 800 billion yen ($5.2 billion) to Rapidus Corp., the nation's leading semiconductor startup, as part of a broader 1.6 trillion yen package to boost the semiconductor and AI industries. Despite previous commitments of 920 billion yen, Rapidus needs an estimated 4 trillion yen to mass-produce 2-nanometer chips by 2027. This funding is part of Japan's effort to revive its semiconductor industry, which lags behind Taiwan and South Korea. Critics question the lack of long-term planning, but the government plans to establish a new framework to support the sector through 2030, aiming for 50 trillion yen in investment over the next decade.
Asahi: https://www.asahi.com/ajw/articles/15528247?msockid=2f0359c643f864b727104cca428265e8
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Joint venture established in 1987 by the European Commission (DG GROW) and the Japanese Government (METI) for promoting all forms of industrial, trade and investment cooperation between the EU and Japan.
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