Weekly Japanese Industry and Policy News (Feb. 2-Feb. 8, 2024)

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. 

Nippon Steel confirms 33% reduction in blast furnace CO2 emissions using hydrogen reduction technology
On February 6, Nippon Steel Corporation announced that in a development test of its Super COURSE50 technology, which uses heated hydrogen to reduce CO2, it achieved a 33% reduction in CO2 emissions from the blast furnace itself, an update to the world's highest standards. The company plans to further conduct demonstration tests and work to quickly establish Super COURSE50 technology (reducing CO2 emissions by more than 50%) in large blast furnaces.

This development is being carried out by a consortium formed by four companies: Nippon Steel Corporation, JFE Steel Corporation, Kobe Steel, Ltd., and the Metal Materials Research and Development Center. Nippon Steel aims to achieve carbon neutrality by using three ultra-innovative technologies: this time, "blast furnace hydrogen reduction," "high-grade steel production in large electric furnaces," and "reduced iron production using hydrogen." 

NIPPON STEEL CORPORATION website (in Japanese):
https://www.nipponsteel.com/news/20240206_100.html

Chubu Electric Power invests directly in Dutch offshore wind power company
Chubu Electric Power announced on February 2 that it will invest 30% in an offshore wind power generation project in the Netherlands. Local energy company Eneco, in which Chubu Electric Power has a 20% stake, has a 40% stake in the project, of which Chubu Electric will purchase 30%. The company will switch from indirect investment to direct investment and dispatch one director and several employees to the operating company.

The wind power generation project in which the company invests has an output of 760,000 kiloliters, which corresponds to approximately 3% of the domestic demand in the Netherlands. Construction is expected to begin in 2024 and commercial operations will begin in 2026. This is the first time for Chubu Electric Power to directly invest in an overseas offshore wind project. As the domestic market peaks out, it will focus on overseas renewable energy business. Once this stock transfer is completed, British Shell will have a 60% stake in the business, Chubu Electric Power will have a 30% stake, and Eneco will have a 10% stake.

Chubu Electric Power website:
https://www.chuden.co.jp/english/corporate/releases/pressreleases/1213148_5163.html

Kioxia announces investment in mass production of advanced memory
Kioxia Holdings, a major semiconductor memory company, and Western Digital (WD) of the US announced on February 6 that they will invest a total of JP¥ 729 billion toward mass production of cutting-edge semiconductor memory products. New production lines will be built at the Yokkaichi Factory in Mie Prefecture and the Kitakami Factory in Iwate Prefecture. Demand for data centers is expected to expand with the spread of generative AI.

The investment period is until April 2029, and the Ministry of Economy, Trade and Industry will provide subsidies of up to JP￥242.9 billion. First, production lines for cutting-edge NAND flash memory, which stacks semiconductor elements in 218 layers, will be established at two factories, with the aim of shipping in September 2025. NAND's storage capacity increases by stacking semiconductor elements. A mass production line for next-generation products will also be in place by 2029. Kioxia and WD have partnered in semiconductor development and manufacturing for the past 20 years.

KIOXIA Corporation website:
https://www.kioxia.com/en-jp/about/news/2024/20240206-1.html

Mitsui O.S.K. Lines and JX Oil Exploration collaborate to build CCS value chain between Japan and Australia
On February 5, Mitsui O.S.K. Lines and JX Oil Exploration announced that they will begin investigating and considering maritime transportation and other options in order to build a CCS value chain between Japan and Australia. In the future, the aim is to transport the CO2 captured in Japan by sea to Australia's Bonython Port, where it will be injected and stored at a storage site. In this collaboration, Mitsui O.S.K. Lines will select a liquefied CO2 vessel type that is appropriate for the port restrictions in Japan and Australia, the expected CO2 transportation distance and volume, and calculate the cost of ocean transportation. JX Oil Exploration will calculate the cost of the entire CCS value chain between Japan and Australia.

Mitsui O.S.K. Lines is collaborating with various companies to build a CCS value chain. In October 2023, it signed a memorandum of understanding with Cosmo Oil regarding the investigation and consideration of maritime transportation, etc. Mitsui O.S.K.is aiming to build a CCS value chain consisting of separation/capture, transportation, injection and storage of CO2 emitted from refineries operated by Cosmo Oil. On the other hand, JX Oil Exploration, in addition to its oil and natural gas development business, positions CCS as an important initiative in its business strategy and is promoting the initiative. In the US state of Texas, commercialization is progressing through the operation of a large-scale CO2 capture plant.

MOL website:
https://www.mol.co.jp/en/pr/2024/24019.html

124 Japanese companies, including Kao, rated the highest in terms of environmental friendliness
On February 6, the British environmental NGO CDP released an evaluation of the environmental disclosures and initiatives of companies around the world. There were 124 Japanese companies that received the highest rating of A in at least one of the three areas of climate change, water resource protection, and forest conservation. This is an increase of 36% from the 2022 survey. There are 10 Japanese companies in the world that have received the "Triple A" rating in all fields, with Kao being the second Japanese company to do so, and Sekisui House being the latest to receive the rating.

The 2023 survey evaluated more than 21,000 companies around the world. The number of companies that received the highest score of A was approximately 2%, or approximately 400 companies, an increase of 20% from the previous year. Approximately 2,000 companies responded in Japan, and 109 companies received an A rating for climate change, including Astellas Pharma and Bridgestone. In the area of forest conservation, Shiseido and Toyota Tsusho have newly acquired certification.
CDP surveys global companies once a year. Its influence is growing, with institutional investors and banks using it for investment decisions and ESG ratings. In some cases, financial institutions ask companies to respond to CDP, and in other cases, they ask companies to confirm their score status as a condition of lending.

CDP website:
https://www.cdp.net/en/articles/companies/scores-press-release-2023

METI provides Google Cloud free of charge to generative AI development companies
The Ministry of Economy, Trade and Industry (METI) announced that it will lease cloud services used for data learning and other purposes from Google Cloud in the US and provide them free of charge to a total of seven startup companies and universities. It is for promoting domestic production of generative AI infrastructure, where overseas companies are taking the lead. Foreign-funded cloud services for generative AI have high usage fees, and tight supply and demand conditions have made it difficult for emerging companies to rent. In Japan, the National Institute of Advanced Industrial Science and Technology, which is under the NETI, also provides cloud computing, but it lacks computing power. This project is called "GENIAC (Generative AI Accelerator Challenge)," and will support the provision of computational resources for the development of basic models that are the core technology of generative AI, promote collaboration among related parties, and communicate externally. Each of the seven companies will develop a basic model by August.

The METI is also aiming to raise the level of development capabilities. In addition to allowing companies and universities to share development methods, the program will also hold study sessions inviting overseas businesses. In order to smoothly raise funds, it will introduce venture capital (VC) and match with companies seeking to use generative AI. An increasing number of companies are utilizing generative AI in operations such as call centers. The main developers are overseas companies such as Chat GPT, a U.S.-based open AI company. The METI will support the development of domestically produced models that are safe and meet the demands of Japanese companies.

METI　website:
https://www.meti.go.jp/english/policy/mono_info_service/geniac/index.html

Germany's H2 Global Foundation signs memorandum of understanding on clean hydrogen with JOGMEC and the Tokyo Metropolitan Government
On February 2, 2024, JOGMEC announced that a memorandum of understanding (MOU) was signed with Germany's H2 Global Foundation (H2 Global), which was established with the purpose of launching an international hydrogen market, to promote cooperation regarding clean hydrogen. JOGMEC and H2 Global will exchange information on policies, systems, technologies, business, supply chains, etc. related to clean hydrogen and its derivatives, and hold workshops and seminars.

H2 Global is a foundation established in 2021 under the "National Hydrogen Strategy" adopted by the German federal government, and aims to foster a hydrogen market not only within Germany but also within the EU and with countries around the world. The foundation has also announced that it will collaborate with the Tokyo Metropolitan Government to launch a hydrogen exchange. The foundation says in the press, “The situation is such that the price of green hydrogen itself does not exist in the first place. Therefore, it is necessary to create a transparent market. We need to create a new system, and exchanges will play a major role in that''.

JOGMEC website:
https://www.jogmec.go.jp/english/news/release/news_08_00013.html