Weekly Japanese Industry and Policy News (Apr. 28-May 11, 2023)

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. 

Weekly Japanese Industry and Policy News (Apr. 28-May 11, 2023)

Mitsubishi Corporation, a joint venture with a Swiss company to buy and sell CO2 emission allowances
Mitsubishi Corporation announced on April 26 that it has started a joint business with South Pole of Switzerland, the world's largest trading company for carbon dioxide (CO2) emissions allowances. It is an intermediary between companies with CO2 capture, reuse and storage (CCUS) technology and companies that want to purchase emission allowances. They aim to handle more than 1 million tons of emission allowances by 2025.

The two companies set up a joint venture to broker the sale of allowances. The joint venture has concluded a long-term purchase of a total of 200,000 tons of emission credits from projects promoted by three companies, including One Point Five, which has a proven track record in CO2 recovery. MOL (Mitsui O.S.K. Lines, Ltd.) and Boston Consulting Group (BCG) of the U.S. have been selected to participate in the joint venture as intermediaries for the emission allowances. Mitsubishi Corp. aims to develop new clients, particularly in Asia.

Emission allowances are certified by a third party. The price will be set at around $200 (about JP￥ 27,000) per ton. Although it is more expensive than forest-derived emissions allowances, which can be purchased for several thousand JP\ per ton, Mitsubishi Corporation and others believe that there is a need for companies that actively work on decarbonization using new technologies.

Mitsubishi corporation website:
https://www.mitsubishicorp.com/jp/en/pr/archive/2023/html/0000051164.html

G7 Digital and Technology Ministers' Meeting Held
On April 29 and 30, the Ministry of Economy, Trade and Industry, together with the Digital Agency and the Ministry of Internal Affairs and Communications, held the G7 Digital and Technology Ministers' Meeting in Takasaki City, Gunma Prefecture. The meeting is one of the ministerial meetings related to the G7 Hiroshima Summit, which will be held from May 19 to 21, and adopted a ministerial declaration and annexes as the outcome document.

At this meeting, discussions were held on the following six themes. The main points of the Ministerial Declaration are as follows. Regarding AI, which is attracting attention, Europe is considering strict regulations from the viewpoint of basic human rights, while Japan and the United States are aiming for flexible operation. Therefore, they argued that it is necessary to establish uniform standards through international organizations for the action plan announced separately from the ministerial declaration.

(1) Promotion of cross-border data flow and reliable free data flow (DFFT)
Agreed on the establishment of an international framework (IAP) for the realization of the DFFT and the G7 Vision and Priorities for the realization of the DFFT.
(2) Maintaining and promoting a free and open Internet
Formulation of a vision for future networks in the Beyond 5G/6G era, and agreement on the G7 action plan for building a safe and resilient digital infrastructure.
(3) Maintaining and promoting a free and open Internet
Agreed on the G7 action plan to maintain and promote a free, open, global, unbroken, reliable and interoperable Internet.
(4) Promotion of economic and social innovation and emerging technologies
Ensuring the interoperability of digital infrastructure, countering software vulnerabilities in digital supply chains, and utilizing governance methods that are friendly to innovative technological innovation.
(5) Promotion of responsible AI and AI governance
Agreed on an action plan to promote global interoperability of AI governance.
(6) Competition policy in the digital market
Agreed to share issues common to each country in drafting and enforcing existing laws and new legal systems in the field of digital competition, and to hold a digital competition summit this fall.

METI website:
https://www.meti.go.jp/press/2023/04/20230430001/20230430001-summary.pdf

MHI concludes comprehensive license agreement for CO2 recovery technology with Italian company
Mitsubishi Heavy Industries, Ltd. (MHI) announced on April 27 that it has signed a comprehensive licensing agreement (GLA) with Saipem, an Italian company, for CO2 recovery technology in a CO2. In regions such as Europe and the Middle East, where demand is expected to further increase in the future, they will expand sales of CO2 recovery plants for many projects and lead the creation of the global CCUS market.

Saipem is a major engineering company engaged in the design, procurement, construction, project management, etc., of plants centered on oil and gas. It has bases in more than 70 countries, advanced engineering technology, and an extensive delivery record.

Since 1990, the Mitsubishi Heavy Industries Group has been working with Kansai Electric Power Co. to jointly develop the "KM CDR Process" and "Advanced KM CDR Process" CO2 recovery technology. Mitsubishi Heavy Industries has been a longtime partner in Saipem's urea technology and has built a world-class fertilizer plant. In this CCUS collaboration as well, they will realize a plant construction execution system that utilizes the strengths of both companies.

MHI website:
https://www.mhi.com/news/230427.html

Mitsubishi Corporation launches Japan's largest decarbonization fund
Mitsubishi Corporation announced on May 2 that it will launch the largest decarbonization fund in Japan jointly with Mitsubishi UFJ Bank and others. A total of $1 billion (approximately JP￥ 135 billion) will be invested in start-up　companies with promising technologies such as floating offshore wind power generation and recycled aviation fuel (SAF). 

Mitsubishi Corporation will create the Marunouchi Climate Tech Growth Fund through a management company jointly established with Mitsubishi UFJ Bank and South Korean private equity fund Pavilion Private Equity. In addition to Mitsubishi Corporation investing hundreds of millions of dollars, Mitsubishi Heavy Industries and other companies will also solicit investment, increasing the amount to 1 $ billion by April 2024.

Investment destinations are expected to be mainly North American and European companies that are leading in environmental technology. Utilizing the trading company's network, they support business collaboration and increasing corporate value.

Mitsubishi Corporation website:
https://www.mitsubishicorp.com/jp/en/pr/archive/2023/html/0000051198.html

Nishimura, METI Minister and Pannier-Runacher, Minister of Energy Transition of France sign joint statement on nuclear energy cooperation
On May 3, 2023, at a meeting between Yasutoshi Nishimura, Minister of Economy, Trade and Industry (METI), and Agnès Panier-Runachet, Minister for the Energy Transition of France, a joint statement was signed to further strengthen the cooperative relationship on nuclear energy between Japan and France.

Nuclear power will greatly contribute to securing a stable supply of energy on a global scale and achieving carbon neutrality. With this statement, the two countries commit to deepening mutual nuclear cooperation, with a focus on research and development.

Specifically, they agreed to accelerate exchanges, including support for research and development, as follows.
- Safe long-term operation of existing nuclear reactors and efforts to improve their safety
- Strengthening industrial cooperation for the decommissioning of the Fukushima Daiichi Nuclear Power Station
- Efforts that contribute to capacity building in countries considering the introduction of nuclear power generation
- Promote reprocessing policies that minimize waste and reduce the need for natural uranium.
- Efforts on next-generation innovative reactors, especially sodium-cooled fast reactors (SFRs)

According to METI, through this agreement, Japan and France have confirmed the importance of accelerating technical cooperation on the nuclear fuel cycle and building a robust nuclear power supply chain.

METI website:
https://www.meti.go.jp/english/press/2023/0503_001.html

Belgian semiconductor imec establishes base in Japan
Belgium-based semiconductor research and development institute “imec” will establish a base in Japan. In collaboration with Rapidus, which is engaged in the domestic production of cutting-edge semiconductors, they will also promote personnel exchanges. The opening date of the base will be finalized in the future. Yasutoshi Nishimura, Minister of Economy, Trade and Industry, visited imec in Belgium on May 1 and made the announcement to Japanese press companies.

imec is a non-profit international research institute that leads the research and development of advanced technologies such as electronics and medicine. It has strengths in EUV (extreme ultraviolet) exposure technology used for ultra-fine processing.

Rapidus plans to mass-produce semiconductors with circuit line widths equivalent to 2 nanometers by 2027 and collaborate with the same organization for the Japan's first two-nano semiconductor. The Ministry of Economy, Trade and Industry and Imec confirmed that they will cooperate to expand the use of semiconductors in cutting-edge fields such as artificial intelligence (AI), automated driving, and life science.

Rapidus and imec signed an MOC on December 6, 2022 for a long-term collaboration, and this time agreement is a further step forward.

METI website (Reference):
https://www.meti.go.jp/english/press/2022/1206_004.html

METI names initiatives related to data integration “Ouranos Ecosystem”
The Ministry of Economy, Trade and Industry (METI) announced on April 29 that it has decided to name the initiative for data linkage, which links and utilizes data across companies and industries, as “Ouranos Ecosystem”. The METI is promoting cooperation between multiple information processing systems operated and managed by different organizations/companies. At this stage, data sharing between companies is becoming widespread. On the other hand, in order to solve social issues such as decarbonization, labor shortages, and intensifying disasters, and to achieve economic growth through reform of industrial structure, it is necessary to share and utilize data across companies, industries, and national borders. 

In Europe, through initiatives such as Gaia-X and Catena-X, efforts are being made to securely link data while ensuring data sovereignty, interoperability between digital platforms, and open-source code. In the United States, along with the spread of data sharing and utilization by mega-platformers, the utilization of innovative technologies such as blockchain is progressing.

In implementing data linkage initiatives, it is important to coordinate domestic participation of companies/organizations and interoperability with overseas data linkage initiatives (preventing Galapagos=isolated). According to the METI, the name "Ouranos", which means the god of the sky in Greek mythology, was chosen from the perspective of expressing a system in which various stakeholders participate and create new value together.

METI website (in Japanese):
https://www.meti.go.jp/press/2023/04/20230429002/20230429002.html

NATO may set up liaison office in Tokyo
According to reports by major Japanese media, Japanese Ambassador to the United States Koji Tomita gave a speech in Washington on May 9, saying that the North Atlantic Treaty Organization (NATO) is coordinating with the establishment of a liaison office in Tokyo. If realized, it will be NATO's first liaison office in Asia.

The media also reported that Ambassador Tomita said that "It's one of our efforts to strengthen cooperation (with NATO)". Non-NATO countries currently have liaison offices only in Ukraine and Sweden.

The Japanese government is strengthening its relationship with NATO, with Prime Minister Kishida becoming the first Japanese prime minister to attend the NATO Summit held in Spain in June last year. In the background of considering the establishment of a liaison office, it is believed that there are expectations that partner country Japan will contribute more to ensuring stability in the Indo-Pacific region, as NATO becomes more wary of China's growing influence.

On this matter, there is no official information from the Japanese Prime Minister's Office, the Ministry of Foreign Affairs, the Ministry of Defense, the Japanese Embassy in the United States, etc.

MOFA website (Reference/not source):
https://www.mofa.go.jp/erp/ep/page4e_001325.html

UK Actis establishes renewable energy company “Nozomi Energy” in Japan
British private equity firm Actis announced on May 9 that it has established a renewable energy company "Nozomi Energy" in Japan. Going forward, through the new company, it aims to invest in onshore wind and solar power generation on a scale of 1.1 GW by 2027.

Actis has signed its first investment and seed asset for Nozomi, acquiring 100% of Hergo Japan Energy Corporation from Infrastrutture S.p.A. of Italy, a leading internationally active renewable energy developer and IPP. Hergo owns onshore wind power under development and photovoltaic power generation in operation (totaling over 230 MW). Actis explains that demonstrating renewable energy technologies in Japan and North Asia will be an effective means of achieving regional energy transitions, transitioning to a low-carbon economy, and achieving climate change goals in Japan.

As a leading investor, Actis has raised $25 billion since inception and has over $15 billion in assets under management. In the energy sector, it invests in the acquisition and construction of power generation and distribution businesses, supporting the world's transition to low-carbon energy. So far, it has invested in more than 70 renewable energy projects, and the total global renewable energy generation capacity is about 12GW. The goal is to add more 12.5 GW in the future.

Acitis website:
https://www.act.is/2023/05/09/actis-launches-500m-renewables-business-in-japan-and-makes-first-acquisition/