News
Green Financing
Japan said that it will aim to issue new bonds as early as next fiscal year in an attempt to boost investment in decarbonization projects and accelerate the transition to the green economy. A government draft said Japan plans to use revenue from carbon pricing, a system that requires polluters to pay when they emit carbon dioxide, to redeem the bonds. The draft also included measures to strengthen decarbonization support for small- and medium-sized firms, and for other Asian nations.
Carbon Neutrality
In the 2022 Sustainable Development Goals Management Survey compiled by Nikkei, 53.3% of companies declared themselves to be working toward the goal of carbon neutrality, which means they are committed to reducing greenhouse gas emissions to almost zero. This is an increase of about 20% compared to the last survey.
【VIEW】
https://www.nikkei.com/article/DGXZQOUC070WD0X01C22A1000000/
Green Financing
At the GX (Green Transformation) Implementation Meeting on November 29, the Japanese Ministry of Economy, Trade, and Industry proposed and approved the issuance of a “GX Economic Transformation Bond” to fund government investments to promote decarbonization and a “carbon pricing” program to fund the redemption of the bond. Given the tax burdens that businesses and households now face from oil, coal, and renewables, carbon tax collection and carbon trading are not expected to be fully operational until 2030. As a result, there is a time lag between decarbonization investments financed by the GX Economic Transformation Bond and the redemption of the bond through carbon pricing. For the Japanese government to redeem the 20 trillion bonds in 20 years, it would require 1 trillion yen of revenue per year, which indicates that the carbon tax should be 1,000 yen per ton of CO2, which is significantly lower compared to prices in other countries. Therefore, many people maintain a skeptical attitude about whether carbon neutrality can be achieved by 2050.
【VIEW】
https://news.yahoo.co.jp/articles/96d2df155d4d084a9c79bdadd849a27d4614be28
Decarbonisation Technology
Takuma Co., Ltd., a manufacturer of environmental equipment in Hyogo Prefecture, built its headquarters into a “wooden building” to promote its wood biomass power plant and other environmental projects. Buildings made of wood emit less CO2 than buildings made of steel or concrete, and the amount of CO2 absorbed by trees in a year reaches its peak at the age of 40-50. Therefore, if trees are cut down and saplings are planted, more CO2 will be absorbed. Wood can also be used as a fuel for biomass power generation – Hyogo Prefecture is exploring a business model that uses the tips and roots of unused wood left in the mountains after cutting to generate electricity.
【VIEW】
https://www.kobe-np.co.jp/news/sougou/202212/0015865370.shtml
Decarbonisation Technology
Japan’s Mitsubishi Heavy Industries(MHI) is allying with ExxonMobil Corp to use MHI’s carbon dioxide capture technology for ExxonMobil’s end-to-end carbon and storage solution (CCS). The venture will get support from Japan’s Kansai Electric Power Co (KEPCO), they added, with the technology aiming to cut the costs of CO2 capture for heavy-emitting industrial customers.
Renewable Energy
According to industry ministry data, renewable energy sources generated 20.3% of Japan’s electricity in the fiscal year through March, up by 0.5 percentage points from the previous year, exceeding 20% for the first time ever. Japan has set a target of making renewables account for 36% to 38% by fiscal 2030, but pundits say that it will not be easy to achieve the goal.
【VIEW】
https://www.japantimes.co.jp/news/2022/11/25/business/renewables-electricity-share-fiscal-2021/
Perspectives
Climate Financing 【The Japan Times】
The United Nations is backing biodiversity credits to boost conservation financing. More than 100 financial institutions representing some $17 trillion have called on world leaders to support effective measures to reserve nature loss by the end of this decade, a deal akin to the 2015 Paris Agreement. The finance sector has struggled to find a clear entry point to plug the annual $700 billion financing gap for efforts to preserve and protect nature, and Biocredits – measurable, traceable, and tradeable units of biodiversity – may help offer the entry point.
【VIEW】
https://www.japantimes.co.jp/news/2022/12/06/business/biodiversity-credits/
Energy Saving & Emission Reduction 【The Japan Times】
At last month’s COP27 in Egypt, Japan was given a “fossil award” for being a major public financier of oil, gas, and coal projects. On one hand, the country’s technological know-how and energy efficiency — from widespread use of public transportation to a willingness to conserve power when called upon — could be a shining example for other countries to follow. But the flip side of Japan’s climate track record is far less rosy. The resource-poor nation continues to rely heavily on fossil fuels, including coal.
【VIEW】
https://www.japantimes.co.jp/news/2022/12/04/national/japan-climate-change-leader-laggard/
Energy-saving Technology 【Japan Forward】
Carbon neutrality has become an indispensable aspect of business strategy. Take automobile manufacturer Daihatsu as an example, it introduces robots to automate the painting process. The upgrades from the innovation make 50% of the air in the painting booths reusable, leading direct reduction in carbon emissions. Daihatsu estimates that this optimization will result in a 30% reduction in manufacturing time. Combined with the adoption of renewable energies, the refurbishment is predicted to reduce CO2 emissions by 58% in 2025 compared to 2013 figures.
【VIEW】
https://japan-forward.com/carbon-neutrality-and-branding-why-companies-are-eager-to-get-involved/
Green Economy 【Upstream】
Australia’s deepC Store and Kansai Electric Power Company (Kepco) of Japan are considering the development of a supply chain for deepC Store to capture and transport between 1 million and 10 million TPA of liquefied CO2 from Kepco’s power station in Japan to CStore1, deepC Store’s flagship offshore floating CCS hub project. The companies have executed a joint study agreement to evaluate the commercial feasibility of the proposed project and to negotiate commercial terms regarding this.
Climate Tariff 【The Japan Times】
The U.S. and EU are weighing new tariffs on Chinese steel and aluminum as part of a bid to fight carbon emissions and global overcapacity. Normally, this move is used in trade conflicts, and this marked a new method of promoting climate agenda. The new framework, which builds on a related U.S.-EU agreement last year, is mainly aimed at China, the world’s biggest carbon emitter and producer of steel and aluminum. The tariff plan would likely deepen divisions between Beijing and Washington, particularly at a time when the two countries have committed to working together to fight climate change.
【VIEW】
https://www.japantimes.co.jp/news/2022/12/06/world/us-eu-climate-tariffs-china/
Interpretations
【Emission Reduction Tech】New technology to capture CO2 from air set for Japan trials
Two Japanese companies are tackling the climate challenge of pulling carbon dioxide out of the atmosphere from a new perspective. Nagoya-based NGK Insulators is working on direct air capture of CO2 using Honeyceram, a ceramic catalyst used mainly in vehicles to clean auto emissions. Another Nagoya-based company, Toho Gas, is working on direct air capture technology that could be installed at liquefied natural gas terminals.
【Green Energy】EU and Japan step up cooperation on hydrogen
The EU and Japan have intensified their cooperation on hydrogen with the signature of a Memorandum of Cooperation (MoC) to spur innovation and develop an international hydrogen market. Both parties have already committed to achieving climate neutrality by 2050 and to accelerating the clean energy transition, as outlined in the EU-Japan Green Alliance. The cooperation will help to establish a rules-based and transparent global hydrogen market without distortions to trade and investment.
【VIEW】
https://ec.europa.eu/commission/presscorner/detail/en/ip_22_7322
【Emission Reduction Technology】What is the potential of “e-Fuel,” can it be the key to carbon neutrality?
Recently, “decarbonization of the internal combustion engine” has also started to be considered as an important part of carbon reduction in the automotive sector. The perspective of tackling this issue in terms of fuel is gaining attention. “E-fuel” is a promising candidate regarding this, and the advantage of e-fuels is that they can combine H2 from renewable energy generation with CO2 enrichment, and the CO2 will release during the burning process. The whole process is zero emission. However, the penetration of e-fuels still needs to overcome the problems of “low energy conversion efficiency” and mass production.
【VIEW】
https://www.goo-net.com/pit/magazine/parts-information/29815/
【Decarbonisation Tech】Can the six companies in the “algae business” be the ace for decarbonisation
In September 2022, Nippon Steel Corporation announced that it had submitted a proposal to the New Energy Industry Technology Development Organization (NEDO) for “Development of Carbon Cycle and Next-generation Thermal Power Generation Technology/Technology Development for Efficient Use of CO2 Base”, entitled “Development of Algae Biomass Production and Utilization Technology that Enables Efficient Use of CO2”. The project has been accepted and is currently underway. The aim is to put algal biomass into practical use as a carbon recovery technology.
【VIEW】
https://news.yahoo.co.jp/articles/b866cb09c95ecc1fa5680456b16de54c0b0a690c
【Understanding Carbon Trading】A Net Zero Future for Japan and Australia on the Horizon
There have been several recent acquisitions of Australian carbon credit trading and production businesses by Japanese corporations, including Mitsui & CO, Mitsubishi, and Osaka Gas Energy Oceania: Mitsui has invested in Climate Friendly, a consulting company that generates and sells carbon credits; Mitsubishi has acquired a 40% stake in Integrated Carbon, a nature-based carbon credit trader in Australia; and Osaka Gas Oceania Energy has acquired a 16.7% stake in Integrated Carbon, a company based in Australia, a company that conducts carbon credit related business based on the reproduction of primary forests. To further drive market activity, a report published by the Australian National University (ANU) in 2021 called for the establishment of a bilateral agreement to facilitate the trade of carbon credit units between Australia and Japan. This will be a great step toward establishing further trade activities between the two countries and increasing the capacity to finance renewable energy projects both in Australia and Japan through the voluntary carbon market.
【VIEW】
https://www.lexology.com/library/detail.aspx?g=6326fc36-ac00-4d0a-a8df-45471636e2c
【Decarbonisation Technology】Toyota Motor Europe on track to achieve carbon neutrality by 2040
At Toyota Motor Europe’s (TME) annual Kenshiki event last week, a team of the company’s Global and European executives shared the company’s latest developments, outlining its vision and technology strategy and revealing its latest products and services. CEO and Evp of Toyota Motor Europe outlined the company’s direction and objective of making all its European manufacturing facilities carbon neutral by 2030 and promoting the carbon neutralization of its upstream supply and logistics.