Weekly Japanese Industry and Policy News (Jan. 26-Feb. 1, 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. 

Kawasaki Heavy Industries commercializes platform to support hydrogen distribution
Kawasaki Heavy Industries announced on January 30 that it will begin demonstration experiments on a platform that clearly shows the hydrogen distribution process and supports hydrogen trading. It will be used by companies to prove carbon dioxide (CO2) emissions during hydrogen production and distribution, ensuring traceability (tracking of production and distribution history). As many companies are disclosing environment-related information, Kawasaki expects that more and more hydrogen businesses will be required to prove CO2 emissions from hydrogen production and distribution in their transactions. In the future, the company predicts hydrogen supply companies and hydrogen users to be its main customers, and will earn sales through certificate issuance fees.

First, demonstration experiments will begin in April on a project that Obayashi Corporation is undertaking in Oita Prefecture to utilize geothermal-derived hydrogen. The company aims to complete design and development by the end of 2025 and commercialize it around 2028. Hydrogen is being developed as a next-generation energy source, but the construction of a large-scale supply chain is still in progress. The company believes that there will be demand for supply chain management in the future, as manufacturers and manufacturing locations are likely to become more diverse and distribution channels will become more widespread internationally.

Kawasaki website:
https://global.kawasaki.com/en/corp/newsroom/news/detail/?f=20240130_2941

Four companies including NYK Line will complete a ship equipped with ammonia co-combustion engine in 2026
On January 25, NYK Line, Japan Engine Corporation, IHI Power Systems, and Nippon Shipyard announced four companies signed a series of contracts to build the world's first ammonia-fueled ammonia transport ship equipped with a domestically produced engine. Completion is scheduled for November 2026. Ammonia-fueled DF engines require co-combustion of heavy oil and ammonia as pilot fuel. The ship aims to achieve a GHG reduction rate of over 80% overall, with a maximum ammonia co-firing rate of 95% for the main engine and an 80% co-firing rate for the auxiliary engines.

As a ship optimized for transporting ammonia, they have achieved a design that allows ammonia to be loaded at full capacity. Issues to be resolved in the development of ammonia-fueled ships include “flammability,'' “treatment of nitrous oxide (N2O), which is a greenhouse gas,'' and “toxicity.'' The consortium has so far developed a prototype that overcomes these issues and designed the ship. 

In the future, demand for ammonia production and maritime transportation will increase worldwide, and the ammonia value chain is expected to be established one after another. On the other hand, international rules regarding ships using ammonia as fuel have not yet been established and are currently being considered by the IMO. The consortium also aims to collaborate with the IMO and the Ministry of Land, Infrastructure, Transport and Tourism, utilize the knowledge gained through this project, and contribute to the creation of international rules led by Japan.

NYK website:
https://www.nyk.com/english/news/2024/20240125_02.html

Marubeni strengthens biorefinery business in collaboration with Finnish company
On January 26, Marubeni announced that it will begin collaboration with Nordic Bioproducts Group (NBG), a Finnish company involved in cellulose innovation and bioproduct development, for the advanced utilization of woody biomass. NBG has a patented technology called “AaltoCellTM'' in lignocellulose raw material hydrolysis method, which is one of the component decomposition methods, in which substances are decomposed by a chemical reaction with water. By utilizing this technology, it is possible to produce high-quality cellulose derivatives, which are essential for manufacturing pharmaceuticals and foods.

The technology can also be used with a variety of raw materials, including cellulose, making it possible to mass produce and reduce production costs. The residue generated during the manufacturing process can be used as biofuel. The CO2 reduction effect has been evaluated by a third party as approximately 80% compared to existing manufacturing methods. Furthermore, it is now possible to produce resins and fibers from woody biomass that were previously produced using fossil fuels and chemicals.

In the future, the company aims to establish a biorefinery business targeting wood biomass (craft pulp, plantation residue, etc.) produced from wood from plantations (approximately 290,000 hectares) in South Sumatra, Indonesia. NBG is a company that spun off from Finland's national Aalto University in 2019. Leading cellulose development in Northern Europe. It aims to introduce breakthrough technologies and biomaterials that redefine the solution landscape.

Marubeni website:
https://www.marubeni.com/en/news/2024/info/00002.html

JAXA's lunar surface probe "SLIM" resumes observations
The Japan Aerospace Exploration Agency (JAXA) announced on January 29 that it has resumed observations using the unmanned probe“SLIM,'' which was Japan's first successful landing on the moon. During landing, the solar panels did not work due to an abnormal attitude, but the sun's direction changed and they began generating electricity. They succeeded in establishing communication with Slim on the night of January 28, and began scientific observations of the lunar surface using a special camera mounted on the craft. The detailed composition of rocks will be investigated to help elucidate the origin of the moon.

At 12:20 am (JST) on January 20, Slim became the fifth country in the world to land on the moon, following the former Soviet Union, the United States, China, and India. It also succeeded in making a "pinpoint landing" within a radius of 100 meters from the target point. However, just before landing at an altitude of 50 meters, one of the two main engines malfunctioned. The plan should had fallen down on its own and land with the solar cells facing upwards, but it landed upside down with the solar cells facing west, so no power was generated. Immediately after landing, the aircraft operated with a battery mounted on the aircraft, and sent image data and other data from the landing to Earth.

JAXA official X (ex-twitter) :
https://twitter.com/SLIM_JAXA/status/1751766255810556340/photo/1

Honda and GM begin production of fuel cells, reducing manufacturing costs to one-third
Honda announced on January 25 that it has begun production of fuel cell systems with General Motors (GM) of the United States. The company will manufacture products jointly developed by a 50-50 joint venture in the US. The manufacturing cost will be reduced to one third compared to conventional fuel cells, and the product will be sold for use in fuel cell vehicles (FCVs) and other applications. Production has begun at Fuel Cell System Manufacturing (FCSM), a joint venture with GM established in Michigan, in the Midwest of the United States. The fuel cell system is expected to have a wide range of needs, not only for FCVs in automobiles, but also for construction machinery and emergency power generation.

Compared to the fuel cell for Honda's FCV "Honda Clarity Fuel Cell" released in 2019, the manufacturing cost is one-third. GM and Honda kept costs down by jointly procuring materials and reducing the use of expensive precious metals. It is also twice as durable. The factory also adopted methods to increase productivity, such as incorporating automation in the assembly of fuel cells. Honda has announced that by 2040 all new cars it sells around the world will be ``zero-emission vehicles'' such as electric vehicles (EVs) and FCVs, which have no exhaust gas.

Honda website:
https://hondanews.com/en-US/releases/gm-honda-begin-commercial-production-at-industrys-first-hydrogen-fuel-cell-system-manufacturing-joint-venture?from=newslink

METI provides JP¥ 45.2 billion subsidies for NTT's next-generation optical semiconductors
On January 30, the Ministry of Economy, Trade and Industry (METI) officially announced that it would provide up to JP¥ 45.2 billion in subsidies for the development of next-generation semiconductors by companies such as NTT. This technology uses light rather than electricity to transmit information between devices, and if realized, it will lead to faster communication and reduced power consumption. It was determined that this project would help improve Japan's industrial power. Support is provided by a new technology called “photoelectric fusion,'' which replaces information transmission with light. It will support research and development for five years until 2029. Target companies include NTT, semiconductor substrate manufacturer Shinko Electric Industries, and semiconductor memory manufacturer Kioxia. It will also collaborate with Intel in the US and SK Hynix in South Korea. Optoelectronic convergence is the core technology of NTT's next-generation communications platform, “OWN.'' It is expected to be used in high-speed communications such as 6G.

METI YouTube Channel (in Japanese):
https://www.youtube.com/watch?v=mt-sw2K5zb8&list=PLcRmz7bR5W3nuyhPiHG2wBS85BuFeuDsL&index=1

OMRON connects to Catena-X to visualize supply chain GHG emissions
Omron announced on January 29 that it will begin a demonstration experiment with NTT Communications and others to visualize the carbon footprint (CFP) of its product supply chain. In order to understand greenhouse gas (GHG) emissions in the supply chain for each product, it will conduct a demonstration of managing production site data on the cloud, including automatically collected equipment operating status and electricity from each production process. This demonstration assumes inter-company data sharing in accordance with international standards, and will be the first Japanese manufacturing company to connect to the European automotive industry data distribution platform "Catena-X."

Manufacturing companies are required to reduce GHG emissions throughout the product supply chain in order to meet the demands for decarbonization while maintaining quality and productivity. To achieve this, it is necessary to understand not only the GHGs emitted by the company (Scope 1 and Scope 2), but also the GHGs generated outside the company (Scope 3). However, effective collection and analysis methods have not yet been established, and it often takes about a year to calculate the GHG emissions of each product, which poses a major challenge for companies working on decarbonization. 

OMRON website:
https://www.omron.com/global/en/media/2024/01/c0129.html

All-Japan organization starts to formulate UN standards for battery replaceable EVs
On January 24, the Ministry of Land, Infrastructure, Transport and Tourism　（MLIT）announced it will launch the Carbon Neutral Center to strategically advance the formulation of international rules (UN standards) that incorporate swappable battery electric vehicle (EV) technology, which is being developed and demonstrated in Japan. In order to achieve carbon neutrality for commercial vehicles such as trucks, the aim is to start international discussions on UN standards for EVs with replaceable batteries in 2024. Commercial EVs have a short cruising range and battery charging time, which is an issue. For this reason, automakers and transportation companies are collaborating to develop and demonstrate EVs with replaceable batteries that can be recharged by removing the battery from the vehicle.

Japan actively participates in the United Nations' World Forum for Harmonization of Vehicle Standards (WP.29), and the Ministry has been leading the development of United Nations standards regarding EV safety and other areas. The Carbon Neutral Center that will be launched this time will respond to discussions on WP.29 regarding carbon neutral vehicle technologies such as battery-swappable EVs, collaborate with standardization activities such as the ISO and collaborate with major countries' governments.

MLIT website (in Japanese):
https://www.mlit.go.jp/report/press/content/001718960.pdf

Toyota, good and bad
Toyota Motor Corporation announced on January 30 that global new car sales in 2023 for the entire group were 11.23 million units, an increase of 7% compared to 2022, and for Toyota alone, it was 10.3 million units, an increase of 8%. These are all-time highs, and this is the first time a single unit has sold over 10 million units. Both the group total and Toyota alone exceeded Germany's Volkswagen (VW, approximately 9.24 million units), ranking first in the world for the fourth consecutive year.

By power source, global sales of HVs increased by 31% to 3.42 million units. This is the first time that sales have exceeded 3 million units and is the highest ever. The number of electric vehicles (EVs) also increased by about four times compared to the previous year to 104,018 units. EV production has been set at a level of approximately 250,000 units in 2024 and 600,000 units in 2025, and expansion is being accelerated. However, the elements of anxiety are piling up. Compared to the US and Europe, the transition to EVs is delayed, and Quality fraud issues were discovered at group companies Hino Motors in March 2022, Daihatsu in December 2023, and Toyota Industries in January 2024. The impact on future sales and production is inevitable, and the management attitude of the entire group is being questioned.

TOYOTA website:
https://global.toyota/en/company/profile/production-sales-figures/202312.html