Weekly Japanese Industry and Policy News: 22 Mar - 28 Mar,2025
The EU Japan Centre is releasing a weekly press review covering Japan's economic and policy matters.
Economic News
▶ Europe's retreat on environmental reporting eases burden on Japan firms
22 Mar, 2025
The European Union plans to relax sustainability reporting rules, which will exempt many Japanese companies from environmental disclosures. The Corporate Sustainability Reporting Directive (CSRD) will be simplified, and its obligations will apply only to the largest companies, with around 80% of those previously affected no longer required to comply. Japanese companies will be exempt until at least fiscal 2027. The Corporate Sustainability Due Diligence Directive will apply only to direct suppliers, and the Carbon Border Adjustment Mechanism will also be relaxed. These changes aim to boost the competitiveness of European businesses. Japanese companies like Mitsubishi Corp. and Sumitomo Chemical are reassessing their compliance plans, while some, like SMC, will continue to prioritize sustainability reporting.
Nikkei Asia: https://asia.nikkei.com/Spotlight/Environment/Europe-s-retreat-on-environmental-reporting-eases-burden-on-Japan-firms
▶ Japan develops uranium-based battery to reuse radioactive waste
22 Mar. 2025
Japan's national nuclear research institute has developed the world’s first uranium-based rechargeable battery, which could help utilize large stockpiles of depleted uranium, a byproduct of nuclear fuel manufacturing. The prototype battery, using uranium as the active material, demonstrated stable charging and discharging performance. It has a voltage of 1.3V, similar to standard alkaline batteries. This innovation may also aid in storing surplus renewable energy. The institute plans to develop a larger "redox flow battery" by 2025. However, the battery will likely be limited to use in radiation-controlled areas, like nuclear power plants.
Mainichi: https://mainichi.jp/english/articles/20250322/p2g/00m/0bu/024000c
▶ 3 Japan airports to use unified gates for immigration, customs checks
25 Mar, 2025
Starting in April, three major Japanese airports will introduce new electronic stands to streamline immigration and customs checks, making the process quicker and more convenient. Travelers will use joint kiosks where they present a passport and a QR code with pre-registered details. Foreign visitors will have their face and fingerprints scanned, while Japanese citizens will have their photo taken. The system, which simplifies separate immigration and customs procedures, will be rolled out at airports like Haneda, Kansai, and Narita. However, foreign nationals with medium- to long-term residency in Japan won't be eligible to use the kiosks.
Mainichi: https://mainichi.jp/english/articles/20250325/p2g/00m/0bu/062000c
▶ Japan and Brazil agree on climate cooperation during Lula's state visit
27 Mar, 2025
Japan and Brazil agreed to strengthen cooperation in areas like the economy, climate change, and security during a summit between Prime Minister Shigeru Ishiba and President Luiz Inácio Lula da Silva. They signed a five-year action plan and established a defense and foreign affairs dialogue. The countries also discussed economic initiatives, including using Brazil's biofuels and Japan's automotive technology for global decarbonization and launching a "working holiday" program for young people. Both sides emphasized multilateralism and free trade, with Brazil pushing for a free trade agreement with Japan and Mercosur. Japan’s investments in Brazil totaled $8.64 billion last year. The two countries also focused on environmental recovery, such as reclaiming land affected by deforestation.
MOFA: https://www.mofa.go.jp/la_c/sa/br/pageite_000001_00869.html
▶ Trump tariffs prompt Japan to consider 'all options'
27 Mar, 2025
Japan's Prime Minister Shigeru Ishiba raised concerns after the U.S. announced 25% tariffs on imported cars and parts, undermining a 2019 trade deal. "We need to consider appropriate responses," Shigeru Ishiba told lawmakers during a parliamentary session. "All options will be on the table."
Japanese automakers, including Toyota and Honda, are assessing the impact. The Japanese government plans to negotiate exemptions, exploring options like voluntary export curbs, a pledge to increase imports for such items as natural gas, grain and meat, and replacing Russian natural gas with that from the U.S. Analysts warn the tariffs could hurt Japan's auto exports and GDP. Despite Ishiba insisting all options are on the table, few analysts expect Japan to resort to countervailing measures, at least not at this point, as it would offer little benefit. The tariffs could also affect U.S. automakers, leading to higher car prices and fewer jobs.
Nikkei Asia: https://asia.nikkei.com/Economy/Trade-war/Trump-tariffs-prompt-Japan-to-consider-all-options
Business News
▶ Japan's Itochu to increase iron ore rights 50% amid high demand
23 Mar, 2025
Japanese trading house Itochu plans to increase its annual iron ore concessions to about 40 million tonnes by fiscal 2030, a 50% rise from the current level. This will be achieved through investments in Brazil, where its stake in CSN Mineracao will help boost production, and in Australia, where it will expand transportation infrastructure. Itochu's iron ore interests in Brazil, Australia, and Canada are expected to reach 27 million tonnes by fiscal 2024, with a further 2 million tonnes from new projects. This expansion aligns with growing global steel demand, particularly in the Global South, and will make Itochu the second-largest holder of iron ore rights in Japan, behind Mitsui & Co.
Nikkei Asia: https://asia.nikkei.com/Business/Markets/Commodities/Japan-s-Itochu-to-increase-iron-ore-rights-50-amid-high-demand
▶ Rakuten eyes expanding deliveries by robot to main e-commerce site
23 Mar, 2025
Rakuten Group is considering using autonomous mobile robots for deliveries due to a labor shortage in Japan's transportation sector. The company has already launched a robot delivery service in Tokyo for groceries and other items, with plans to expand this technology to its Rakuten Ichiba e-commerce platform. The robots will be especially useful for last-mile deliveries. Rakuten’s current service, which began in Tokyo's Harumi district, uses robots to transport groceries for a fee. Japan's updated road traffic laws now make it easier for autonomous delivery robots to operate on public roads. Other businesses like Uber Eats are also exploring similar services.
Mainichi: https://mainichi.jp/english/articles/20250323/p2g/00m/0bu/011000c
▶ Nippon Steel races Asian rivals to hone green technology
24 Mar, 2025
Nippon Steel is advancing in its efforts to decarbonize steel production, focusing on hydrogen-based technology to reduce carbon emissions. While it aims to commercialize this technology by 2040, it faces competition from global rivals, particularly in China and South Korea. The company has made progress, such as setting a world record for reducing carbon emissions by 43% at an experimental furnace. However, scaling up the process remains a challenge, and the technology is not yet cost-effective. Additionally, Nippon Steel is working on using low-quality iron ore and hydrogen to make steel with electric furnaces, which produce less CO2. The company also faces challenges in securing enough green hydrogen, which is scarce in Japan, and may need to rely on "gray" or "blue" hydrogen in the short term. As demand for eco-friendly steel rises globally, particularly in the automotive sector, Nippon Steel is focused on meeting domestic demand first before expanding abroad.
Nikkei Asia: https://asia.nikkei.com/Business/Materials/Nippon-Steel-races-Asian-rivals-to-hone-green-technology
▶ JFE Steel, Mitsubishi Gas Chemical, and Mitsubishi Chemical Collaborate to Develop a Carbon Recycling Supply Chain at Mizushima Complex
24 Mar, 2025
JFE Steel, Mitsubishi Gas Chemical, and Mitsubishi Chemical have signed a Memorandum of Understanding (MoU) for a demonstration project at the Mizushima Complex in Okayama Prefecture, Japan. The project will convert by-product gases from steel manufacturing into methanol, which will then be used to produce propylene, a key raw material for plastics. Set to begin in FY2026, the project aims to reduce greenhouse gas emissions by utilizing CO2 from industrial processes. The initiative seeks to promote carbon recycling and collaboration between the steel and chemical industries, contributing to a sustainable, carbon-neutral society.
JFE Steel: https://www.jfe-steel.co.jp/en/release/2025/03/250324.html
▶ Rapidus Announces Strategic Partnership with Quest Global to Enable Advanced 2nm Solutions for the AI Chip Era
25 Mar, 2025
Rapidus Corporation has signed a Memorandum of Cooperation with Quest Global Services, making Rapidus Quest Global's new semiconductor foundry partner. This partnership aims to provide AI semiconductor solutions, leveraging Rapidus’ 2nm manufacturing process to develop low-power AI chips. The collaboration will offer a Virtual IDM model for fabless companies, reducing time-to-market by integrating design, front-end, and back-end processes. The partnership will help meet the growing demand for specialized AI semiconductors, with Rapidus' rapid manufacturing model playing a key role in supporting customers' custom needs.
Rapidus: https://www.rapidus.inc/en/news_topics/news-info/rapidus-announces-strategic-partnership/
▶ Power semiconductor makers cut jobs and spending as EV growth stalls
25 Mar, 2025
Power semiconductor producers, crucial for electric vehicles (EVs), are reducing their workforces and delaying investments due to disappointing EV market growth, leading to excess capacity. Companies like Japan's Renesas Electronics and Germany's Infineon Technologies are planning significant layoffs, with Renesas running its facilities at only 30% capacity. Global EV sales grew by 9% last year, a sharp slowdown compared to previous years. Additionally, Chinese competition is rising, as BYD and CanSemi Technology ramp up production. Japanese manufacturers, like Mitsubishi Electric and Fuji Electric, are struggling to compete with larger American and European firms but are partnering to share investment costs in new production facilities.
▶ Signing of Memorandum of Understanding for Consideration of Investment in Green Ammonia Production Project in India
25 Mar, 2025
Six companies—IHI Corporation, Hokkaido Electric Power, Mitsubishi Gas Chemical, Mitsui O.S.K. Lines, Mizuho Bank, and Tokyo Century—have signed a Memorandum of Understanding (MoU) to explore investment opportunities in a green ammonia production project in Odisha, India. The project, set to produce 400,000 tons of green ammonia annually by 2030, will help decarbonize various sectors, including power generation and shipping. The green ammonia will be transported to Japan for use by domestic industries. The companies aim to establish a special purpose company (SPC) for production and investment, leveraging their expertise in ammonia production, transportation, and utilization to build a stable, international green ammonia value chain.
IHI: https://www.ihi.co.jp/en/all_news/2024/resources_energy_environment/1201318_13691.html
▶ Kobe Steel to take stake in all-solid-state battery startup
25 Mar, 2025
Kobe Steel has taken a stake in Lasagna.one Inc. (LO), a California-based startup developing all-solid-state batteries. LO’s batteries offer benefits like fast charging, high voltage, and stable performance across a wide temperature range. The company aims to accelerate development and mass production with new funding. Kobe Steel plans to utilize its technologies, such as equipment used in battery manufacturing, to support LO's innovation and help bring these next-generation batteries into practical applications. This partnership aligns with Kobe Steel's strategy to strengthen its technological expertise and contribute to the development of advanced energy solutions.
Kobelco: https://www.kobelco.co.jp/english/releases/1216229_15581.html
▶ Hitachi Energy and AWS strategic collaboration accelerates innovation in the cloud and advances the energy transition
25 Mar, 2025
Hitachi Energy has signed a multi-year strategic collaboration agreement with Amazon Web Services (AWS) to accelerate the deployment of cloud-based solutions for utility and energy-intensive companies. The initial focus is on Hitachi Vegetation Manager, an AI-driven system designed to reduce power outages caused by vegetation interference with infrastructure. By using AI, satellite imagery, and weather forecasts, the system predicts potential threats, helping to improve reliability and reduce maintenance costs. This collaboration aims to enhance grid performance, integrate renewable energy, and support the global energy transition through advanced digital solutions.
Hitachi: https://www.hitachi.com/New/cnews/month/2025/03/250327c.pdf
▶ Japan back-end chip companies form alliance to upgrade supply chain
26 Mar, 2025
Over 20 Japanese companies involved in back-end semiconductor manufacturing are forming an alliance to strengthen domestic supply chains. The group, which includes major players like Amkor Technology Japan and Aoi Electronics, represents 80% of Japan’s back-end chipmaking industry. The alliance will focus on joint production, material procurement, and research on labor-saving techniques. Starting in fiscal 2025, it will create infrastructure for shared production and collaborate with regional organizations to train workers. The goal is to secure steady supplies of legacy products used in various industries and develop next-generation back-end production technology.
▶ Toyota delays Japan battery plant project on EV slowdown
26 Mar, 2025
Toyota Motor has postponed the construction of a planned battery plant in Fukuoka, Japan, as it reassesses its strategy amid slowing global demand for electric vehicles (EVs). The plant, initially scheduled to begin operations in 2028, was set to produce batteries for next-generation Toyota EVs. Toyota plans to reconsider the plant's scale and the products it will manufacture. The company also faces fluctuating EV sales forecasts and shifting market conditions, especially in the U.S. and China. Despite delays, local officials remain optimistic about the plant's potential long-term benefits for job creation and economic growth.
▶ Japan's Tokio Marine Asset exits net-zero alliance after BlackRock
27 Mar, 2025
Tokio Marine Asset Management exited the environmentally focused Net Zero Asset Managers (NZAM) initiative in late February, citing doubts about its effectiveness in addressing societal challenges. This marks the first exit by a major Japanese firm amid growing global climate change efforts. While other Japanese asset managers, such as Nomura, Daiwa, and Mitsubishi UFJ, remain part of NZAM, and Sompo Asset Management continues its membership, the departure highlights the increasing uncertainty in the sector. Overseas, BlackRock also left NZAM in January, citing confusion and legal concerns. The future of NZAM remains uncertain as it reviews its objectives. Additionally, major Japanese insurance and banking groups have withdrawn from related U.N.-backed initiatives.
▶ TSMC, Intel and other top chipmakers slow Japan, Malaysia expansions
28 Mar, 2025
Leading chipmakers like TSMC, Intel, and ASE Technology are slowing their expansions in Japan and Malaysia due to weak demand for older chips and uncertainties around tariffs. TSMC has postponed equipment installation at its Japanese plant, and Intel has delayed its advanced packaging plant in Malaysia. Chip packagers like SPIL are also halting expansion plans, focusing instead on meeting growing AI chip demand in Taiwan. The slowdown in expansion is partly due to soft demand in sectors like automotive and consumer electronics, as well as geopolitical uncertainties, including U.S. tariff policies. While the semiconductor industry faces challenges, data center supply chains in Southeast Asia are still expanding due to high demand.
Nikkei Asia: https://asia.nikkei.com/Spotlight/Supply-Chain/TSMC-Intel-and-other-top-chipmakers-slow-Japan-Malaysia-expansions
