The EU Japan Centre is releasing a weekly press review covering Japan's economic and policy matters.
Economic News
▶ Japan gov't to support companies boosting geothermal power plants
08 Nov, 2024
Japan will support private companies in developing geothermal power plants, aiming to commercialize them by 2030. A public-private committee will address challenges like using next-generation technology and reducing development timelines. The government will increase subsidies for geological surveys and fund drilling risks until steam release is confirmed. Prime Minister Shigeru Ishiba sees geothermal development as a way to boost local economies, especially in rural areas. Japan aims to increase geothermal energy output from 600,000 to 1.5 million kilowatts by 2030, with new "closed-loop" technology helping avoid conflicts with hot spring operators.
Mainichi: https://mainichi.jp/english/articles/20241108/p2g/00m/0na/061000c
▶ Trump's return risks trade tension with Japan as imbalance widens
09 Nov, 2024
Donald Trump's second term could strain U.S.-Japan economic relations, as Japan's trade surplus with the U.S. has grown significantly. Trump's proposed tariffs might reduce Japan's competitiveness, particularly in the automotive sector, and disrupt supply chains. Japan is also the largest foreign investor in the U.S., but tariff hikes and inflation risks could hurt its businesses. While Japan may benefit from short-term U.S. economic growth, Japan’s GDP could be impacted by weakened demand for its products.
Nikkei Asia: https://asia.nikkei.com/Economy/Trump-s-return-risks-trade-tension-with-Japan-as-imbalance-widens
▶ Japan to Aim for All New Cars to Be Biofuel-Compatible in 2030s
11 Nov, 2024
Japan's industry ministry has announced plans to push automakers to make all new passenger cars compatible with biofuel by the early 2030s to reduce carbon dioxide emissions from gasoline vehicles. The goal was revealed at a subcommittee meeting of the Advisory Committee for Natural Resources and Energy. Additionally, the ministry aims to require oil wholesalers to supply gasoline with up to 10% bioethanol by fiscal 2030, and 20% bioethanol by fiscal 2040, with the possibility of making this mandatory through legislation. An action plan will be adopted by next summer, with plans to support the renovation of gas stations to accommodate biofuel. Bioethanol, derived from crops like corn and sugar cane, absorbs CO2 during growth, helping to offset the emissions when the fuel is burned.
Jiji: https://jen.jiji.com/jc/eng?g=eco&k=2024111101044
▶ Japan to roll out $65bn in support for chips, AI
12 Nov, 2024
The Japanese government, under Prime Minister Shigeru Ishiba, will provide at least 10 trillion yen ($65 billion) in support through fiscal 2030 to boost the semiconductor and AI industries. The plan aims to attract over 50 trillion yen in public and private investment over the next decade. It includes subsidies, investments through government institutions, and debt guarantees for private-sector loans. The initiative, which will not be funded by deficit-covering bonds, focuses on strengthening Japan’s industrial base in semiconductors and AI, with an expected economic impact of 160 trillion yen. A key beneficiary is Rapidus, a state-backed company aiming to mass-produce next-generation chips by 2027. The government will also provide 920 billion yen in subsidies to support the company's fundraising efforts.
Nikkei Asia: https://asia.nikkei.com/Business/Tech/Semiconductors/Japan-throws-weight-behind-Rapidus-as-it-plans-to-raise-funds
▶ Japan, EBRD Ink MOU on Green Reconstruction of Ukraine
14 Nov, 2024
Japan's Environment Ministry and the European Bank for Reconstruction and Development (EBRD) signed a memorandum of understanding on Thursday to support Ukraine's reconstruction with a focus on decarbonizing urban development. The agreement, made during COP29 in Baku, aims to help rebuild Ukraine's infrastructure, including housing and transportation, with an emphasis on sustainability, such as installing solar panels. The initiative is expected to contribute to global climate goals by reducing greenhouse gas emissions and addressing environmental challenges.
Jiji: https://sp.m.jiji.com/english/show/36673
Business News
▶ Riken team helps develop optical quantum computer
09 Nov, 2024
Japanese researchers at Riken and Nippon Telegraph and Telephone Corp. have developed an optical quantum computer that could significantly reduce the size of next-generation computers and enable faster calculations. The new machine uses light as qubits, allowing more qubits to be packed into a smaller device. Unlike traditional superconducting quantum computers, this innovation makes the system more compact, with the Riken quantum computer featuring around 100 qubits in a machine just 4.2 meters long. The new quantum computer can perform calculations equivalent to a 1,000-qubit superconducting machine and is compatible with neural network calculations, which could advance AI research and improve energy efficiency. The team hopes this development will make quantum computing more accessible and widely used.
Asahi: https://www.asahi.com/ajw/articles/15501914
▶ Toyota to invest $1.45 billion in Mexico
10 Nov, 2024
Toyota Motor Corp. will invest $1.45 billion in Mexico to expand truck production, including the development of next-generation models like a hybrid version of the Tacoma pickup truck. This total investment, announced by Mexico's Ministry of Economy, reflects the amount Toyota has invested since 2020. The funds will be allocated to two production plants, one in Baja California and the other in Guanajuato. Toyota has been operating in Mexico since 2002. The announcement comes as former U.S. President Donald Trump has proposed imposing a 200% tariff on vehicles imported from Mexico, which could impact the automotive industry.
Japan Times: https://www.japantimes.co.jp/business/2024/11/10/companies/toyota-to-invest-in-mexico/
Jiji: https://jen.jiji.com/jc/eng?g=ind&k=2024111000056
▶ Japan's Taiyo Oil plans $1bn sustainable aviation fuel hub in Okinawa
13 Nov, 2024
Taiyo Oil is investing 200 billion yen ($1.3 billion) to produce plant-based jet fuel in Okinawa, aiming to meet growing demand for sustainable aviation fuel (SAF). The facility, set to produce 220,000 kiloliters of SAF annually from 2028 using LanzaJet’s technology, will source raw materials like sugarcane and corn from Brazil and the U.S. Taiyo Oil plans to sell SAF to airlines in Taiwan and South Korea due to Okinawa's distance from Japan's major airports. Japan's government aims for refiners to supply SAF from 2030, with major companies like Eneos and Idemitsu also entering the market. However, Japan's airlines predict SAF demand will soar to 23 million kiloliters by 2050, far exceeding projected 2030 production.
Nikkei Asia: https://asia.nikkei.com/Business/Energy/Japan-s-Taiyo-Oil-plans-1bn-sustainable-aviation-fuel-hub-in-Okinawa
▶ Nvidia, SoftBank CEOs join hands to propel AI expansion in Japan
13 Nov, 2024
Nvidia CEO Jensen Huang and SoftBank CEO Masayoshi Son announced a partnership to advance AI in Japan, focusing on an AI-assisted mobile network management system for high-traffic areas and applications like self-driving cars and robots. The collaboration aims to leverage Japan's tech strengths and position it as a leader in AI, especially in automotive and robotics. Both companies are heavily investing in AI, with Nvidia benefiting from its GPUs and SoftBank through its Arm subsidiary. Huang also suggested outsourcing production to Japan's Rapidus Corp. in the future.
Mainichi: https://mainichi.jp/english/articles/20241113/p2g/00m/0bu/024000c
▶ Development of the world's first heat storage material with the highest thermal storage density, primarily composed of water
14 Nov, 2024
Mitsubishi Electric and Science Tokyo University, led by Professor Akira Hayakawa, have developed a thermal storage material using a temperature-sensitive polymer gel primarily made of water. This new material can store low-temperature heat (30°C–60°C) with a world-leading heat storage density of 562 kJ/L. The material is effective in recovering and reusing low-temperature waste heat from factories, vehicles, and buildings, contributing to energy efficiency and carbon neutrality by reducing fossil fuel consumption. The breakthrough was achieved by mimicking the crowded environment found in biological cells, allowing for high-density heat storage at low temperatures. The development was made possible through Mitsubishi Electric’s molecular simulation and material analysis technologies, combined with Science Tokyo’s expertise in polymer synthesis. The results will be presented at the 33rd Polymer Materials Forum in Kyoto from November 14–15.
Mitsubishi Electric: https://www.mitsubishielectric.co.jp/news/2024/1114.pdf (Japanese)
▶ JAXA Successfully Launches Observation Rocket from Kagoshima Prefecture; Mission Is Part of Efforts to Develop ‘Detonation Engine’ That Burns Fuel in Space
14 Nov, 2024
Japan's Aerospace Exploration Agency (JAXA) successfully launched the S-520 No. 34 observation rocket at 11:30 a.m. on Thursday from the Uchinoura Space Center in Kagoshima Prefecture. The launch aimed to test a new "detonation engine" designed to create propulsion in space. The engine works by burning liquid ethanol and an oxidizer (liquefied nitrous oxide) to generate a shockwave, a step forward in advanced propulsion technology for space missions.
Yomiuri: https://japannews.yomiuri.co.jp/science-nature/technology/20241114-222511/
▶ Komatsu to quadruple U.S. battery production capacity
15 Nov, 2024
Komatsu plans to quadruple battery production at its U.S. unit, American Battery Solutions, investing $65 million to reach 2.6 GWh annually by 2026. As part of its push to reduce emissions in the mining sector, Komatsu is exploring hydrogen fuel cells and other solutions to cut carbon footprints while addressing the challenges of electrifying heavy mining equipment. The company faces issues like the need for large batteries in electric dump trucks, which increase vehicle weight and reduce durability. To overcome these hurdles, Komatsu has formed partnerships with ABB, Vale, and Cummins. Mining equipment sales have tripled in the past decade, now making up 40% of total revenue, as the global market for low-carbon mining solutions grows.
The EU-Japan Centre currently produces 5 newsletters :
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.
The EU-Japan Centre’s activities are subject to the allocation of a Grant Agreement by the European Commission for 2024-2026
