www.eu-japan.eu/eubusinessinjapan

Market Situation and Potentials
in Japan for Technologies for Solid
Biomass Utilization

ReportJanuary 30, 2024
Peter Beck
EU-JAPAN CENTRE FOR INDUSTRIAL COOPERATION - Head office in Japan
EU-JAPAN CENTRE FOR INDUSTRIAL COOPERATION - OFFICE in the EU
Shirokane-Takanawa Station bldg 4F
Rue Marie de Bourgogne, 52/2
1-27-6 Shirokane, Minato-ku, Tokyo 108-0072, JAPAN
B-1000 Brussels, BELGIUM
Tel: +81 3 6408 0281 - Fax: +81 3 6408 0283 - TokyoOffice@eu-japan.gr.jp
Tel : +32 2 282 0040 –Fax : +32 2 282 0045 - office@eu-japan.eu
http://www.eu-japan.eu / http://www.EUbusinessinJapan.eu / http://www.een-japan.eu

This report has been prepared by
ECOS Consult GmbHPeter Beck
Westerbreite 749084 Osnabrueck
Germany
Tel.: ++49 (0) 541 911 909 90
E-Mail: info@ecos.eu
www.ecos.eu

EU-JAPAN CENTRE FOR INDUSTRIAL COOPERATION - Head office in Japan
EU-JAPAN CENTRE FOR INDUSTRIAL COOPERATION - OFFICE in the EU
Shirokane-Takanawa Station bldg 4F
Rue Marie de Bourgogne, 52/2
1-27-6 Shirokane, Minato-ku, Tokyo 108-0072, JAPAN
B-1000 Brussels, BELGIUM
Tel: +81 3 6408 0281 - Fax: +81 3 6408 0283 - TokyoOffice@eu-japan.gr.jp
Tel : +32 2 282 0040 –Fax : +32 2 282 0045 - office@eu-japan.eu
http://www.eu-japan.eu / http://www.EUbusinessinJapan.eu / http://www.een-japan.eu

www.eu-japan.eu/eubusinessinjapan

Contents
1.

Executive Summary ................................................................................................................................................... 7

2.

Scope of the Report .................................................................................................................................................. 93.

Market Framework Conditions ............................................................................................................................... 10a.

Country Profile .................................................................................................................................................... 10b.

Role of Biomass in the Energy Mix ...................................................................................................................... 11i.

c.

Political Strategy and Subsidies .......................................................................................................................... 12i.

Political strategy and targets .......................................................................................................................... 12ii.

Legal framework ............................................................................................................................................. 15iii.

Subsidy Policy for Biomass .............................................................................................................................. 17d.
4.

Share of Biomass compared to other renewable energy sources .................................................................. 11

Obstacles for solid biomass utilisation................................................................................................................ 19
Market Situation ..................................................................................................................................................... 20a.

Market Volume ................................................................................................................................................... 20i.

Wood chips ..................................................................................................................................................... 20

ii.

Wood pellets ................................................................................................................................................... 20

iii.

Palm kernel shells (PKS) .................................................................................................................................. 21iv.

Biowastes ........................................................................................................................................................ 22b.

Market Developments and Trends ..................................................................................................................... 24c.

Main Applications in Japan ................................................................................................................................. 26

d.
5.

i.

Wood biomass power stations ....................................................................................................................... 26

ii.

Biomass furnaces / Biomass boilers ................................................................................................................ 27

iii.

Wood pellet production facilities.................................................................................................................... 28

iv.

Biofuel production facilities ............................................................................................................................ 29
Main Processes in Japan ..................................................................................................................................... 30

Market Access ......................................................................................................................................................... 32a.

Market access conditions.................................................................................................................................... 32b.

Distribution channels .......................................................................................................................................... 33c.

Regulations.......................................................................................................................................................... 34
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6.

Major players .......................................................................................................................................................... 37a.

Technology Suppliers / Competitors................................................................................................................... 37b.

Customers ........................................................................................................................................................... 38

c.
7.

8.

Trade Fairs ........................................................................................................................................................... 36

i.

Cities and municipalities ................................................................................................................................. 38ii.

Companies....................................................................................................................................................... 39
Associations & Research Institutes ..................................................................................................................... 40

Market Potentials and Recommendations ............................................................................................................. 41a.

Potentials ............................................................................................................................................................ 41b.

Challenges and main obstacles for market entry ............................................................................................... 42c.

Recommendations .............................................................................................................................................. 45
References .............................................................................................................................................................. 47

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List of Abbreviations
ANRE

Agency for Natural Resources and Energy

BC

British Columbia

BtL

Biomass to Liquid

CHP

Combined Heat and PowerDG RTD

Directorate-General for Research and Innovation of the European Commission

DS

Dry Substance

EPA

Economic Partnership Agreement

FIP

Feed-in Premium

FIT

Feed-in Tariff

FY

Fiscal Year (in Japan government's financial year is from 1 April to 31 March)

GHG

Greenhouse Gas

GW

Gigawatts

IEA

International Energy Agency

ISEP

Institute for Sustainable Energy Policies

JORA

Japan Organic Recycling Association

JPY

Japanese Yen

JST

Japan Science and Technology Agency

kW

Kilowatts

kWh

Kilowatt-hours

MAFF

Ministry of Agriculture, Forestry and Fisheries

METI

Ministry for Economy, Trade and Industry

MEXT

Ministry of Education, Culture, Sports, Science and Technology

MoEJ

Ministry of the Environment, Japan

MoF

Ministry of Finance

MSW

Municipal Solid Waste

MW

Megawatts
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MT

MegatonsNGO

Non-Governmental OrganisationNPO

Non-Profit-Organisation

OCCTO

Organization for Cross-regional Coordination of Transmission Operators

PKS

Palm kernel shells

PV

Photovoltaics

REX

Registered Exporters System

SICORP

Strategic International Collaborative Research Program

SPC

Special purpose company

TED

Tenders Electronic Daily

USDA

United States Department of Agriculture

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1. Executive Summary
As a country that is 68% forested, Japan’s national and local governments have heavily promoted biomass including
through the launch of ‘Biomass Towns’ that act as best practice examples utilising this form of renewable energy for
power and heat, as well as fertiliser.
Japan has set the ambitious target to reach net zero emissions by 2050. The current 6th Strategic Energy Plan, released
by METI in October 2021, aims to chart the energy policy path to achieving carbon neutrality and, as a next step, toreduce greenhouse gas emissions by 46% by FY 2030 compared to FY 2013.
With the Third Basic Plan for Promoting Biomass Utilization, approved by the cabinet in September 2022 the Japanese
government has set the goal for 2030 to utilize approximately 80 % of the yearly biomass output to realize a sustainable society with less environmental burden. However, the current utilization rate of solid biomass is already high: as
for example sawmill residues and waste of construction timber with a share of almost 100%.
A variety of governmental and local subsidy programmes, e.g. from the Ministry of Agriculture, Forestry and Fisheries,
MAFF, the Ministry of Economy, Trade and Industry, METI, and different prefectures support biomass technologies
with high subsidy rates.
The support for the feeding of electricity produced from biomass has remained high, which means a good planningsecurity for the economic operation of biogas plants in Japan. For example, for electricity generated from woody biomass derived from thinning and other sources it amounts to 40 JPY/kWh for small plants (max 2 MW), for electricity
from biogas plants it is still 35 JPY/kWh. Japan has also introduced a feed-in-premium (FIP) scheme for renewable
power sources from April 2022. The new mechanism allows renewable power producers to sell their electricity in a
spot market at a premium to wholesale prices.
Wood pellets, wood chips, palm kernel shells (PKS) and biowastes such as cattle manure or food waste are the main
feedstock materials used as energy sources. Of these fuels, imported wood pellets are expected to see the highest
increase. Japan has been dramatically increasing its wood pellet imports for its feed-in-tariff (FIT) program. A reason
for the steady increase of wood pellet imports is that, after the accident at the Fukushima Daiichi nuclear power plantin 2011 (caused by an earthquake and tsunami) Japan extended its FIT system to a wider range of renewable energies.
The supply of wood pellets in Japan is estimated to import more in the future because of the price gap between
domestic and international prices that is approximately three times higher than the imported price from countries
such as Vietnam and Canada. Japan imports all of its palm kernel shells (PKS) most of them from Thailand, Malaysia
and Indonesia.
For the treatment of biowastes as animal waste and municipal solid waste, biogas plants have an increasing market
share in Japan. Currently feedstock and application trends in Japan are shifting from the traditional livestock excreta
and sewage sludge, to a composite of sewage sludge and food waste including industrial waste and food scraps. Highrise buildings with “urban biogas systems” that recycle food waste are being implemented. For digestion of organic
wastes in Japan, both wet and dry digestion processes are used.

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Main applications for the use of solid biomass are:
•
•
•
•
•

Wood pellet production facilities (made from compressed sawdust and other wood waste, and they are used
as a fuel source for power plants and industrial boilers).
Agricultural waste power plants (e.g. digestion and gasification processes)
Municipal waste-to-energy plants (e.g. digestion and incineration processes)
Forest biomass power plants (e.g. power stations for generating electricity and heat)
Biomass furnaces / Biomass boilers (e.g. wood chip boilers for generating heat)

Japan has also been steadily increasing its biomass power generation capacity, with its total operational biomass
power generation capacity reaching 6,379MW in 2022 and 243 solid biomass power generation facilities that mainly
use unutilized wood (derived from thinning, etc.)
In general, for European companies deciding to do business in Japan, there are four ways to set up operations: A sales
agent (this could also be a Japanese partner), a representative office in Japan, establishing a Japanese branch or an incorporation. Especially for SMEs in the beginning, a partnership with a domestic player is a good way for a market
entry. Such a partnership can take various forms: arrangements for the collection of feedstock arrangements, technology alliances, joint ventures or value chain alliances. Ideally, these partners belong to the biogas sector such as
plant manufacturers (incl. planning service providers) and constructing companies. Many of these companies alreadyutilize technologies and components made by foreign manufacturers for their biogas plants, as for example combined
heat and power generators (CHP). These partners can also act as distributors for biogas plants as well as a local agent
or distributor to sell in foreign markets. Trading houses are also considered as further potential partners.
For a successful market entry, a membership in associations e.g. joining the Japan Organic Recycling Association (JORA),
JARUS (The Japan Association of Rural Solutions for Environmental Conservation and Resource Recycling) is recommended in order to get contacts to multipliers from industry and municipalities in order to access an extensive network,
including project developers, technology providers, consultants and engineers. Visits of expert fairs in the biomass
sector (such as the regularly organised Biomass Expo fair, the Biomass Pellets Trade & Power Conference or FORESTRISE 2024) may be helpful to get in contact with potential customers and partners.
In the case that electricity generation from biomass is intended beyond feed-in of electricity into the public grid, alternative options should also be considered. Because in some regions of Japan grid operators may limit the power for
feed-in, it also should be considered to use electricity and heat locally and only feed-in a part of the generated electricity. This also applies to the utilisation of heat (and possibly also for covering the cooling demand) for coverage ofown consumption (not only for the biomass / biogas plant itself but also for surrounding potential consumers such as
farms, industry, sewage plants, settlements etc.). Especially for biogas plants, in addition, the sale of fermentation
residues as fertiliser (in many cases by saving disposal costs for the residues) can be a solution to improve economic
efficiency of the plant.
This report shows the wide variety of biomass utilisation in Japan. The utilisation of almost all types of solid biomass
for energy, especially if it is obtained locally wherever possible has clear ecological advantages over other disposal
methods for food, such as the form of waste disposal by incineration that is frequently used in Japan. In the long term,
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a significant expansion of the Japanese market for biomass technology can be assumed. Besides the generation ofheat, power generation technology from biogas or solid biomass has an unspeakable positive added value for national
electricity generation and, in the future, when the expansion of wind power and PV in Japan is more advanced, also
to provide balancing power.

2. Scope of the Report
This report focuses on the market for solid biomass technologies in Japan and is addressed to mainly small and medium-sized companies in Europe who offer innovative technology in the solid biomass sector. It presents a comprehensive overview of the Japanese market for solid biomass including current trends, drivers, as well as business potentials and challenges for European companies seeking to develop or strengthen their positions in the Japanese market.
Definition of solid biomass:
Solid or compressed pieces of organic matter in the form of pellets that release their stored energy through combustion and burning. Solid biomass or feedstock materials include:• Wood & wood residues such as trees, shrubs, sawdust, pellets, chips and waste wood.
• Agricultural residues like straw, grasses, seeds, roots, dried plants, nut shells and husks.
• Energy crops from charcoal, peat leaf litter and moss.
• Processed waste such as Bagasse plant waste.
• Animal waste such as dried slurry and manure.
• Municipal solid waste from household rubbish and garbage.

This report does not include liquid biofuels.
Structure of this report:
The political strategies and targets related to biomass utilisation and technologies are described in part 3.
The current size, structure and trends in the Japanese market for is summarized in chapter 4.
Issues related to market access such as distribution channels and regulations are characterized in part 5. This chapter
also included some relevant trade fairs and some possible obstacles to market entry.
In part 6, some of the main market players (companies, universities/research institutes, associations) are listed up.
The report concludes with a short analysis of the business opportunities, main challenges, and key success factors inchapter 7.
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Thus, the report strives to provide practical information and valuable recommendations for EU-based small and medium-sized enterprises engaging into the market for biomass technologies which helps them to estimate the potentialof Japan’s biomass market for their specific innovative technology or service, and to capitalize on existing business
opportunities.
The report is based on an extensive desk research of relevant publications and media, including publications by Japanese ministries, government bodies and research institutions in Japanese language. Furthermore, information sources
such as specialist journals, economic journals, company reports and websites, statistical websites, etc. were integrated
to complement the study.

3. Market Framework Conditions
a. Country Profile
Japan has a total land area of 365,000 km² and a population of 126.7 million people, which represents a high population density of 348 persons per km².

Fig.1: Land use in Japan (2021), (Source: IEA Bioenergy, “Implementation of bioenergy in Japan – 2021 update”)
Around two thirds of the land area is forest land and 11% is agricultural land, almost exclusively arable land.
As a country that is 68% forested, Japan’s national and local governments have heavily promoted biomass, including
through the launch of ‘Biomass Towns’ that act as best practice examples utilising this form of renewable energy for
power and heat, as well as fertiliser.

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b. Role of Biomass in the Energy Mix
i. Share of Biomass compared to other renewable energy sources
For 2022, renewables are estimated to account for 22.7% of all electricity generated in Japan (including on-site consumption), a slight increase from 22.3% in the previous year.

Fig.2: Share of Renewable Energy in Total Electricity Generated in Japan (2022), Source: Institute for Sustainable Energy
Policies ISEP (2023)
As for renewables other than solar power, the share of electricity generated from biomass power was 4.6%, up from
4.1% in the previous year.
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1%
4%
17%

35%

Hydropower
Solar
BioenergyWind
Geothermal

42%

Fig.3: Share of electricity from renewable energy sources in Japan in 2022, (source: Statista (2024))

c. Political Strategy and Subsidies
i. Political strategy and targets
Japan has set the ambitious target to reach net zero emissions by 2050 and to reduce Japan’s greenhouse gas emissions by 46 % below 2013 levels by fiscal year 2030 (instead of the previously announced 26%). (Source: Ministry of
the Environment (2021), “Annual Report on the Environment in Japan 2021”)

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Fig.4: Japan’s targets for GHG reduction (2021), (Source: Ministry of the Environment, Japan, “National Greenhouse
Gas Inventory Report, 2021”)
Japan’s energy policy was significantly changed by the 2011 Great East Japan Earthquake and the Fukushima Nuclear
Accident.

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Fig.5: Comparison of FY 2030 Targets for Renewables for Energy Generation-Electricity (source: USDA United States
Department of Agriculture, Report “Japan Biomass Annual 2023” (2023))
As part of the Nippon Biomass Strategy, the Ministry of Forestry intends to promote the use of wood biomass as animportant energy source in the future.
In October 2021, METI released the 6th Strategic Energy Plan approved by the cabinet.
The 6th Strategic Energy Plan aims to chart the energy policy path to achieving carbon neutrality by 2050 (announcedin October 2020) and to reduce greenhouse gas emissions by 46% by FY 2030 compared to FY 2013, while at the sametime continuing the efforts to meet the challenge to achieve the ambitious target of reducing emissions by 50%.
Accordingly, the Japanese government published the outlook for energy demand-supply in FY 2023. It referred to thebiomass energy outlook. (Source: Ministry of Economy, Trade and Industry (METI), Japan (2021) “2030 年度におけるエネルギー需給の見通し,”, written in Japanese, page 41)
The outlook indicated two scenarios for biomass energy expansion: (A) continuation of the current policy effort and(B) the case policy reinforced. (A) estimates if the policy has been implemented in the current pitch, and (B) predicts
if further policy improvements will have been implemented i.e. some policy implementations are expected, and theseeffects are included in the estimation. More specifically, they mention for instance working forward to expand domestic solid biomass utilization by revision of Forest and Forestry Basic Act, allowing biomass utilization to expand continuously.

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Current production (1)FIT certified but not Project operation for newly Total (=1+2+3)
operational (2)certified items (3)

(A)
(B)
(A)
(B)
1,840
2,110
310
390
4,260
4,340
Tab.1: The prospect of biomass energy introduction in (FY)2030 in MWh (selected only solid wood* in biomass estimate)* Unused thinned wood, general woods (Emitted from wood processing facilities such as sawmills), construction material waste
MAFF announced that the Third Basic Plan for Promoting Biomass Utilization was approved by the cabinet in September 2022.
(Source: Ministry of Agriculture, Forestry and Fisheries (MAFF), Japan (2022) “The Third Basic Plan for Promoting Biomass Utilization”)

The main basic strategical change was that the ‘Prefectural Biomass Utilization Promotion Plan’ was set to be formulated by all prefectures in 2030. This accelerates voluntary efforts to utilize biomass utilization all over Japan.
As national goals for 2030, they set to utilize approximately 80 % of the yearly biomass output to realize a sustainable
society with less environmental burden. ➡However, the current utilization rate of solid biomass is already high:Sawmill residue (98%), waste of construction timber (96%). These goal rates for 2030 do not change with the current
rate. Yet in terms of forest residue, they refer to expand more than 33%, compared to 29% of the current utilization
rate.
In April 2022, the Japanese government, at the behest of its Biomass Sustainability Working Group, introduced a mandatory standard for life cycle assessment of greenhouse gas emissions for all new biomass installations (but stackemissions are still excluded). New biomass projects applying for government funding must now demonstrate a 50%
reduction in life-cycle emissions compared to average fossil fuel emissions by 2030 and 70% from 2030 onwards.1

ii. Legal framework
The legal framework of sustainability criteria for biomass fuels, compared for example to the EU, is still not sufficiently
developed in Japan. Many parts of the framework of sustainability criteria for biomass fuels are still in discussion. The
current discussion focuses e. g. on new standards of environment, society, labour, and governance as well as on third
party certifications giving a proof on supply chains of main products (such as bio-substrates, general wood, palm oiletc.) along the entire value chain. The Ministry for Economic, Trade and Industry (METI) has currently established aworking group for discussing further assessment standards for sustainability because of the rapid increase of biomass
fuel imports in the last few years.
Since April 2023, Japan has implemented a new life cycle greenhouse gas emission standard for biomass power plants
supported by its feed-in tariff subsidy for renewable energy. Designed to ensure that forest biomass usage actually
reduces carbon emissions compared with fossil fuels, Japan’s new standard is similar to those already implemented
by fellow forest biomass users like the United Kingdom and European Union.

1source: Mongabay Series: Covering the Commons, Planetary Boundaries, 2022
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Under Japan’s life cycle greenhouse gas emission standard, new biomass plants must be able to reduce their partial
life cycle emissions compared with a standardized fossil fuel smokestack emission value by 50% from 2023 onward,
and by 70% from 2030. But although existing biomass plants in Japan are required to calculate and disclose their partial
life cycle emissions from now on, they aren’t obligated to meet the reduction targets2.
For the installation and operation of biomass plants, different regulations, depending on the treatment process (furnaces, digestion, gasification etc.) are relevant. These are listed in the EU-Japan Centre report “The Market for Biogas
Plants in Japan and Opportunities for EU Companies”, (created by ECOS). This report is available at https://www.eujapan.eu/eubusinessinjapan/library/publication/report-market-biogas-plants-japan-and-opportunities-eu-companies
In 2020 NEDO published a brochure on requirements and technical guidelines for planning and installation of biomassenergy systems giving, for example, information on system selection (methodology) based on potential raw material(input), checklist for the implementation of a sustainable energy business, major characteristics of methane fermentation business and positive effects on local communities: https://www.nedo.go.jp/content/100927443.pdf

2source: “Mongaby Series – News & Inspiration from Nature’s Frontline”,(2023)
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iii. Subsidy Policy for Biomass
Ministry of Agriculture, Forestry and Fisheries, MAFF
MAFF aims to establish a regional ecosystem, utilizing small-scale solid biomass energy in order to use forest resources
sustainably. For subsidization, they regulate that the plant should be less than 1000 kW and the energy should not besold under the FIT/FIP scheme. From FY 2017 to FY 2022, MAFF has supported 51 regions under this provision. Mainly
municipalities can apply this subsidy for formulating implementation plans, and Japan Forest Technology Association
etc. are in charge of consulting. In FY 2023, 180 million JPY was accumulated as budget and 10 regional sites were
accepted.
Also, MAFF offers supporting capital investment to municipalities and private business sectors to facilitate the use ofsolid biomass. More specifically, the following cases are applicable: to prepare equipment (e.g., mobile chippers), andto construct facilities either where supply solid biomass (e.g., solid fuel production facilities) or where utilize the biomass energy (e.g., boilers). A project should be above 5 million JPY and the subsidy rate should be less than 50%.
Ministry of Economy, Trade and Industry, METI
Since FY 2021, METI has launched a subsidy program to formulate a system regarding biomass energy supply andutilization with the collaboration of MAFF. The program is supposed to continue for 8 years and aims to expand its
utilization yearly by 110.000 tons and by (FY) 2032 to reduce biomass fuel material cost by 30% compared to the cost
in FY 2021. The subsidy includes the demonstration project of the production and transportation system for solid
biomass fuel as well as outsourcing projects relevant to formulating a plan for solid biomass fuel (e.g., chips and pellets).
In FY 2023, they have 740 million JPY for the budget and the subsidy rate should be less than two-third per project.
Local Subsidy Programs
Hokkaido prefecture subsidizes the case of introducing renewable energy facilities including solid biogas plants tofacilitate local energy production for local consumption. The subsidy rate should be less than 50% (maximum financial
support is 50 million JPY). Especially related to the biomass project in FY 2023, they admitted supporting Onsen (hotspring) for boiler renewal, which utilizes solid biomass3.
Shizuoka Prefecture, where solid biomass plants of more than 10,000 kW are expected to be installed, provides its
own subsidy to the municipalities, small- and medium-scale organizations, and NPOs for capital investment. The subsidy rate is less than one-third and the maximum amount of the subsidy ranges from 2 million to 130 million JPY.
Feed-in-Tariff (FIT) for electricity generated by solid biomass
Before the Fukushima disaster in 2011, the FIT system only applied to solar energy. In 2012, Japan adopted an expanded FIT system that covers solar energy as well as most other renewable energy sources, including biomass, wind,geothermal and small hydro. Under the FIT system, power utilities charge their customers a fixed price or tariff forelectricity generated from approved renewable energy sources for a predetermined period after the power plants arecommissioned. According to the report, the FIT scheme maintained a fixed price regardless of the wholesale electricity
price. From fiscal year 2022, Japan introduced a feed-in premium (FIP) programme for renewable energy sources,
under which the Ministry of Economy, Trade and Industry (METI) sets a fixed premium that is added to the average3source: Hokkaido Government, 2023
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wholesale electricity price of the previous 12 months. From fiscal year 2012 to 2014, FIT program paid equally 32 JPY
per kilowatt-hour (kWh) for all plants using domestic “unutilized wood” derived from thinning operations. To expand
FIT utilization to smaller plants, particularly in rural communities, ANRE increased the FIT rate to 40 yen per kWh formicro power plants (i.e., generating less than 2 megawatts (MW)), provided they use domestic unutilized wood.
Feed-In-Tariff (FIT) for electricity generated by Wood Biomass:
Procurement price per kWh etc./base price*1

Methane fermentation gas(derived from biomass)*3

Woody biomass derived from thinning and othersources
2,000 kW and above*3

Less than 2,000 kW*3

32 JPY

40 JPYFY 2021 (reference)
FY202239 JPYFY202335 JPY

Adjustment period/
Delivery period*2
20 years
Tab. 2: Feed-In-Tariff (FIT) for electricity generated by Methane fermentation gas and woody biomass derived from thinning andother sources Wood Biomass (Source: METI (2023), 買取価格・期間等（2022 年度以降）

FY 2021 (reference)

FY2022

Procurement price per kWh etc./base price*1
Solid biomass fuels from genBiomass liquid fuels resulting
Construction Waste and othereral woody biomass and agrifrom the harvesting of agriculmaterial
biomass*3
cultural harvestingtural products (category applicawaste *3
ble to the tendering system).
10,000kW or
Less than(derived from biomass)*3
more
10,000kW*3(Distinguished
未by the systemof entry)
Determined bybidding system
Determined by bidding system(4th 18.5 JPY)
(4th 18.5 JPY)
Decidedthrough a tender system(5th preliminary
Decided through a tender system
undisclosed)(5th preliminary undisclosed)
Decidedthrough a tender system
24 JPY
Decided through a tender system
13 JPY
17 JPYFY2023Adjustment period/
Delivery period*2
20 years*1 Procurement price plus tax for FIT schemes , reference price for FIP schemes (excluding bidding system applicable categories)
and maximum price for bidding system applicable categories.
*2 Procurement period for FIT schemes and delivery period for FIP schemes.
*3 Regional utilization requirements will be set for FIT certification (excluding modified certification) from FY2022 (except in supply
areas such as the Okinawa region and remote islands).
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Tab. 3: Feed-In-Tariff (FIT) for electricity generated by Solid biomass fuels, biomass liquid fuels resulting from the harvesting ofagricultural products, construction material waste and other biomass (Source: METI (2023), 買取価格・期間等（2022 年度以降）)

d. Obstacles for solid biomass utilisation
There are three main obstacles to solid biomass utilization:•••

Firstly, there is a limit to the amount of wood that can be thinned domestically by the Forest and Forestry
Basic Act. Therefore, for general wood and biomass liquid fuels, more than 70% of raw materials are imported
wood such as palm oil and PKS (Palm Kernel Shell), and there is a marked dependence on foreign countries.
Secondly, solid biomass power generation has the issue of high generation costs compared to other renewableenergy sources such as solar and hydroelectric power generation. Since fuel costs account for 70% in the caseof solid biomass, the challenge is clarifying the path to cost reduction.
Lastly, resources are dispersed over a large area, which tends to result in small-scale decentralized plants thatare expensive to collect, transport, and manage.

In addition, if biomass should be utilized for electricity generation, the current limited access to the electricity transmission grid for renewable electricity generation plants is considered as one of the factors hampering the growth ofrenewable energy in Japan. In order to assess whether there is still free capacity in the power lines, the situation of apower failure must also be taken into account. For this reason, the maximum transmission capacity with two transmission lines is only 50 % (with three or more transmission lines, this can be up to 70 %). Among other reasons, insome cases this situation prevents the connection of renewable energy installations. Several renewable energy suppliers are still waiting to be connected.
Another possible obstacle is that several grid operators only allow electricity feed-in with a limited capacity for new
biomass plants. In some regions, for example, only biogas plants with power up to 50 kW can be connected to the
public grid.
Planners of Biomass plants for electricity generation are increasingly pointing out that the conversion of bioenergy canbe used very well for grid stabilization due to its flexibility in the generation of electricity and its permanent availability.
This makes it increasingly difficult for grid operators to refuse or delay the grid connection. In order to significantly
increase the supply of energy from renewable sources - as advocated in the government's Basic Energy Plan - both thegovernment and the energy industry are going to maximize the efficient use of the transmission grid. As a first measure
to strengthen and stabilize the Japanese transmission grid the independent "Organization for Cross-regional Coordination of Transmission Operators" (OCCTO) was founded in 2015. This is responsible for monitoring and controllingthe supply and demand of electricity. Its duties include planning work in order to sustainably promote interregional
interconnection and frequency conversion (as for the electricity grid Japan uses 2 different frequencies: 50 Hz in Eastern Japan and 60 Hz in Western Japan). Other solutions include the introduction of smart grids and the recalculationof the grid situation. More detailed information on this issue is given in the EU-Japan Centre report “The Market for
Biogas Plants in Japan and Opportunities for EU Companies” (created by ECOS).

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4. Market Situation
a. Market Volume
i. Wood chips
Wood chips are sourced largely from Japan’s domestic forestry sector. Domestic timber sourced for biomass comesfrom thinning and forest residues, including treetops and other timber waste; the majority is sourced from tree plantations. Quantities of chips produced from these sources increased from roughly 750,000 metric tons in 2012 (the year
the FIT was introduced), to 8.6 million metric tons in 2020, according to government statistics on wood chip for energy
usage.

ii. Wood pellets
Of the three fuels, imported wood pellets are expected to see the greatest increase. Japan has been dramaticallyincreasing its wood pellet imports for its feed-in-tariff (FIT) program, with wood pellet imports expected to reach an
estimated 4.25 million bone-dry tons this year, according to a report filed with the USDA Foreign Agricultural Service’s
The majority is currently sourced from Vietnam, the US and Canada (British Columbia)

Note: The data for 2023 f are based on the first five months of this year.
Fig.6: Growth of Wood Pellet Imports to Japan (Source: Biomass Magazine, “Report: Japan's import of wood pellets toincrease in 2023” (2023))

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A reason for the steady increase of wood pellet imports is that, after the accident at the Fukushima Dai'ichi nuclear
power plant in 2011 (caused by an earthquake and tsunami) Japan extended its FIT system to a wider range of renewable energies.
Since 2017, the import price of wood pellets has been constantly rising from around 20.000 (YEN/MT) in 2017 to
30.000 (YEN/MT) in 2023, increasing by 1.5 times. This was because of the effect that the price of the yen has been
weak in the market as well as the Russian-Ukraine war. The impact of the Covid and the rise in transportation fuelcosts due to soaring oil prices are subsiding4.
In particular, the supply of wood pellets in Japan is estimated to import more in the future. This is because of the pricegap between domestic and international prices: usually the domestic price in Japan is three times higher than theimported price from Vietnam and Canada etc. This was caused due to the significant decline of people who engage inforest and forestry in Japan: the number of forestry workers in 2020 was 43,710, which has decreased by 35% compared to the number of workers in 2000. Also, the percentage of elderly people engaging in the industry is getting
higher with 25% in 2020 compared to 21% in 20105

iii. Palm kernel shells (PKS)Japan imports all of its palm kernel shells (PKS), a leftover after the oil is processed. Oil palm plantations have been
blamed for massive deforestation across Southeast Asia, and especially in Malaysia and Indonesia, for decades. In 2021,
Japan sourced 4.3 million metric tons of shells from Malaysia and Indonesia.
Japan imported 19,000t of PKS from Thailand in June, from none a year earlier.
As same as wood pellets, the import price of PKS has been increased from 12.000 (YEN/MT) in 2017 to 22.000 (YEN/MT)
in 2023. PKS prices have remained high as supply and demand remain tight due to increased demand in Japan.

45source METI (2023)“バイオマス発電事業の現状と要望”
source: MAFF - Ministry of Agriculture, Forestry and Fisheries, Japan, “Annual Report on Forest and Forestry in Japan” (2022)
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Fig.7: current market trend of wood pellets (left) and PKS (right) (source: METI (2023) バイオマス発電事業の現状と要望)

iv. Biowastes
Processed waste/ Bagasse plant waste.
In the sugar industry, factories produce large amounts of bagasse (residues of sugarcane), which is used principally as
boiler fuel. Bagasse produced at factories is converted to carbonized bagasse charcoal through a simple carbonization
process (pyrolysis) in a carbonizing furnace. Japan is currently supporting projects Thailand, Indonesia, and Vietnam
for producing Raw Materials for Ethanol from Sugarcane Bagasse.
Animal waste and municipal solid waste
In Japan animal waste such as dried slurry and manure and municipal solid waste from household rubbish and garbage
are increasingly used in biogas plants.
For digestion of organic wastes in Japan both wet and dry digestion processes are used. While wet systems operate at
low solid contents (<10 – 20 % of dry substance (DS)), dry systems operate at high solids (20 –> 40 % DS). The wet
fermentation process is more complex and needs a higher amount of investment. On the other hand, the material
flow is larger which leads to a higher throughput rate and a better efficiency. Wet digestion plants show improved
energy balance and economic performance compared to dry systems. However, dry digestion plants offer several
benefits, including greater flexibility in the type of feedstock accepted, shorter retention times and reduced water
usage.
As the following figure shows, the installed capacity of bioenergy plants shows an almost steady annual increase of
approx. 11-13 % since the year 2014.

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Fig.8: Installed Capacity of Bioenergy (Biogas plants) in Japan (source: Renewable Energy Institute based on METI,ANRE (2020): “Status of the special law on usage of new energy by electric companies in FY2013” and METI, ANRE
(2020): “Website for the information disclosure on Feed-in-Tariff”)
The market research institute Fuji Keizai determined an annual growth rate of the market for biogas plants in Japan ofapprox. 10% for the years 2018-2020.6
With the aim to introduce more biomass and to ensure a stable procurement and sustainability a growth from 3.5 GW(2017) up to 7.3 GW (2030) installed power for biomass use is expected by METI. The expected increase of Biogas
capacity is even higher (from 0.05 GW in 2017 up to 0.16 GW in 2030) (see Figure 9).

6source: Deutsche Industrie- und Handelskammer in Japan (2017): “Zielmarktanalyse Japan 2017”
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Fig.9: Installed capacity for biomass utilization (source: ANRE, Yamazaki, T. (2018): “Japan’s Renewable Energy Policy”)

b. Market Developments and Trends
Wood pellets:
Two of the world’s largest pellet producers have set their sights on Japan: Drax and Enviva.
Drax, a major U.K. power company and wood pellet producer, has acquired two Canadian pellet producers, Pacific
BioEnergy and Pinnacle Renewable Energy, in British Columbia. Pellet companies have received the BC authorities’
blessing, according to Roger Smith from the environmental advocacy NGO Mighty Earth. In his view, the BC provincial
government is looking to generate revenue from a new “bioeconomy,” especially because trees lacking commercial
value as timber can still be cut and made into pellets.
Enviva, the world’s largest producer of forest biomass for energy, claims it uses woody waste material to make woodpellets. The pellet producer Enviva is now ramping up business with Japan.
Although shipments from Enviva only began in January 2021, the company has set its goal to provide Japan with 3
million metric tons of wood pellets every year, an amount equivalent to Japan’s total pellet imports in 2021. Major
Japanese trading houses, such as the Sumitomo Corporation and Mitsubishi Corporation, are among the signing 10to 15-year contracts with Enviva. (source: Mongabay Series: Covering the Commons, Planetary Boundaries, 2022)
Japan has also been steadily increasing its biomass power generation capacity, with its total operational biomass
power generation capacity reaching 6,379MW in 2022, up from 5,394MW a year earlier. (source Argus Media group,
2023)

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Biogas:In the biogas sector currently feedstock and application trends in Japan are shifting from the traditional livestock
excreta and sewage sludge, to a composite of sewage sludge and food waste including industrial waste and food scraps.
High-rise buildings with “urban biogas systems” that recycle food waste are being implemented. This is seen as a potential growth market within the sector. ECOS already created a report on behalf of EU-Japan Centre on the market
for Biogas Plants in Japan in 2021. The report is available at https://www.eu-japan.eu/eubusinessinjapan/library/publication/report-market-biogas-plants-japan-and-opportunities-eu-companies
Food Waste:
Currently most of the waste from food production is processed into fertiliser and feed.
However Japan still wastes around 5.23 million tons (state 2021, up 10,000 tons from the previous year), of which 2.79
million tons (up 40,000 tons from the previous year) came from business-related food loss generated by food-related
businesses and 2.44 million tons (down 30,000 tons from the previous year) from household food loss. (Source: MAFF
(2023) “最新の食品ロス量は 523 万トン、事業系では 279 万トンに, ～食品ロス量（令和 3 年度推計値）を公
表～”)
In order to reduce unused food waste and to recycle it, the Act on the Promotion of the Recycling of Recyclable Food
Resources, known as Food Recycling Act, was enacted in 2000 (revised in 2007: According to this act food waste is tobe recycled primarily as raw materials for animal feed and fertilizer; The Act was again revised in 2015 with the goal
to further reduce the amount of food waste produced and enhance recycling [animal feed, fertilizer, methane]).
Food waste is also part of the Japanese Biomass Industrialization Strategy that includes (among others) measures topromote bio-gasification technologies, the creation of a food-waste collection system, the implementation of recycling
through methane gasification, solid fuel conversion and combined utilization with sewage sludge and animal waste,
as well as application of FIT scheme.
By means of the methanation of food waste, which is less suitable as feed or fertilizer, the utilization rate was aimed
to increase from 27 % in 2009 to 40 % in 2020. (Source: EU-Japan Centre (2015): “Waste Management and Recyclingin Japan”).
Of 170 registered food waste recycling plants in Japan, 108 are only composting the waste, followed by 55 for animal
feed production (Source: World Biogas Association (2019): “Market Report Japan”). According to the Japanese Ministry of the Environment (MoEJ), 42 biogas plants are operating using food waste from households and industry.
Food waste is not generally collected and treated separately in Japan. But in the food industry, restaurants, municipalities, etc., an extensive system of food waste collection and recycling has been established. The Japanese Food
Waste recycling law limits the food recycling method to feed, fertilizers, fuel (biogas and carbonization) and oils & fats.
Food waste from the restaurant industry is often not applicable to recycling for the use of fertilizer or animal feed due
the difficulty of separation by categories and hygiene management. This kind of waste is better suited for methanation
which does not require a strict separation for further use. Food waste is suitable for methanation as it generates an
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extremely larger amount of biogas than other biomasses such as manure. By cutting the costs of disposing of foodwaste It may also lead to new sources of income for restaurants and food industry.

c. Main Applications in Japan
Some of the most common types of solid biomass projects in Japan include:
•
•
•
•
•

Wood pellet production facilities (made from compressed sawdust and other wood waste, and they are used
as a fuel source for power plants and industrial boilers).
Agricultural waste power plants (e.g. digestion and gasification processes)
Municipal waste-to-energy plants (e.g. digestion and incineration processes)
Forest biomass power plants (e.g. power stations for generating electricity and heat)
Biomass furnaces / Biomass boilers (e.g. wood chip boilers for generating heat)

Each of these project types serves a different purpose, but they all play a crucial role in reducing Japan's dependence
on non-renewable energy sources and in reducing its carbon footprint.
Main sources for wooden biomass in Japan are thinned wood and logging residue, sawmill byproducts, constructionwaste, park pruned branches, and orchard pruned branches.
Sixty-seven percent of Japan's land area is forested; in some regions, the proportion of forested area exceeds 80%.
Many sawmills use wood from these forests. Furthermore, more than 90% of construction waste and waste woodfrom sawmills are used to generate energy and paper manufacture in Japan, whereas approximately 30% of pruned
branches and logs are used for this purpose (NEDO, 2011). Unutilized pruned branches and logs are left in the mountains or burned in the open. By effectively utilizing this unused woody waste, it may be possible to ensure the production of renewable and sustainable energy (Alao et al., 2022).7

i. Wood biomass power stations
Japan has also been steadily increasing its biomass power generation capacity, with its total operational biomass
power generation capacity reaching 6,379MW in 2022, up from 5,394MW a year earlier.8•••

As of March 31, 2022, 433 solid biomass power generation facilities had been approved under the Renewable
Energy Feed-in Tariff (FIT) scheme, and 183 of these facilities were in operation.
Of the 243 solid biomass power generation facilities that mainly use unutilized wood (derived from thinning, etc.)
and have been approved under the scheme, 105 are currently in operation: there are 138 FIT/FIP-approved facilities that are not yet operational (as of the end of March 2022), and when all of these facilities are operational,
there will be a total of 243 in 40 prefectures.
Overall, both the number of certifications and the number of installations (number of operations) increased. In
particular, the pace of increase in the small-scale unutilized wood category (wood from thinned forests, etc.,<2,000 kW) was particularly significant.

7

source: Science Direct (2023), “Assessment of unutilized woody biomass energy and the cost and greenhouse gas emissions ofwoody biomass power plants in Hokkaido, Japan”
8source: Argus Media Group (2023), “Japan's June biomass imports rise on year”
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Solid biomass power generation facilities, mainly using unutilized wood, are expected to continue to operate
throughout Japan. In particular, more than 10,000 kW are expected to be installed in Hokkaido, Yamagata, Fukushima, Gifu, Shizuoka, and Miyazaki.

(source: MAFF (2023), “木質バイオマス発電施設の認定・導入状況や地域別、都道府県別の燃料用チップ利用量の傾向”)

Fig. 10: projected operation of solid biomass power generation facilities (especially unutilized wood category) (source:
MAFF (2023), 木質バイオマス発電施設の認定・導入状況や地域別、都道府県別の燃料用チップ利用量の傾向)The scale of circle indicates how much they can generate electricity (kW). Operating plants are marked with orange,
not operating plants with blue circles.

ii. Biomass furnaces / Biomass boilers
With 2,069 units in 2019 (including systems outside the FIT regime) The number of biomass boilers fed with wood raw
materials amounted reached its highest peak9) during the last 8 Years.

9source: Deutsche Industrie- und Handelskammer in Japan (2022), “Zielmarktanalyse 2022 mit Profilen der Marktakteure” basedon data from Renewable Energy Institute, 2022
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Fig.11: biomass boiler installations in Japan (source: Japan Woody Biomass Association (2018))
It should be noted that wood pellet boilers are hardly used in private households in Japan. Wood chip boilers aremainly used for industrial applications such as the wood processing and furniture industry, but also for additional
heating purposes as for example at hot springs (Onsen).

iii. Wood pellet production facilities
Japan currently has 135 domestic pellet plants, down from 137 in 2020. Domestic production is estimated at 150,000
metric tons for 2021, up slightly from 149,000 metric tons in 2020.
But the majority of wood biomass is imported from foreign countries (such as Korea, Vietnam, US and Canada). Japan
imported an estimated 3 million metric tons of wood pellets in 2021, up from 2.028 million in 2020, according to areport filed with the USDA Foreign Agricultural Service’s Global Agricultural Information Network in late December.

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Supply and Demand of Wood Pellets

Wood Pellets (1,000 MT)

3500
3000
2500
2000

1500
1000
500
0
2012

2013

2014

2015

2016

2017

2018

2019

2020

2021f

Calendar Year
Production

Imports

Consumption

Fig.12: Supply and Demand of Wood Pellets, (Source: Biomass magazine (2022),” Report: Japan imports 3 million metrictons of pellets in 2021")

iv. Biofuel production facilities
At present, BtL (Biomass-to-Liquid) fuels are the subject of various R&D projects on 2nd generation biofuels. The biofuel program is part of Japan's policy to mitigate climate change as well as help to ensure a stable energy supply. As
this report is focused on solid biomass only the production of Bio-Ethanol from solid feedstock is mentioned.
Bioethanol (ethyl alcohol) is made by fermenting the carbohydrate components of plant materials, such as corn, sugarcane or rice. While in 2013 approx. 10 Million litres of Bio-Ethanol, produced in totally 5 refineries in Japan from
Molasses and residues from rice production were used, today no refinery is operating anymore 10.

10source: United States Department of Agriculture – USDA (2022), “Biofuels Annual”.
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Advanced Biofuels
Second-generation biofuels, also known as advanced biofuels, are fuels that can be manufactured from various typesof non-food biomass. Biomass in this context means plant materials and animal waste used especially as a source of
fuel.
Second-generation biofuels are made from different feedstocks and therefore may require different technology to
extract useful energy from them. Second generation feedstocks include lignocellulosic biomass or woody crops, agricultural residues or waste, as well as dedicated non-food energy crops grown on marginal land unsuitable for foodproduction.
On April 14, 2021, the Japan Science and Technology Agency (JST) and the Directorate-General for Research and Innovation (DG RTD) of the European Commission each announced the results of a call for applications on “Advanced
Biofuels and Alternative Renewable Fuels” as a part of JST’s Strategic International Collaborative Research Program(SICORP)11).
SICORP supports international joint research in research areas prioritized by the Ministry of Education, Culture, Sports,
Science and Technology (MEXT).

d. Main Processes in JapanOne of the key factors that sets Japan apart from other countries in terms of biomass projects is the level of technology
being used.
From advanced pyrolysis processes to state-of-the-art gasification systems, Japan’s biomass projects are some of themost technologically advanced in the world.
The development of bioenergy capacities in Japan has shown a clear upward trend since the introduction of the fixed
feed-in tariff (FIT). In January 2022, a total of 780 bioenergy projects are certified for the fixed feed-in tariff under theJapanese FIT system. Of these, 512 projects have already been realized and are in operation. A further 227 projects
have been approved for the 20-year FIT term and have yet to be implemented. The 512 projects already implemented
can be broken down according to the categorization of the FIT system by feedstock used12. It should be noted that
there are also many bioenergy plants that are not certified for a FIT for various reasons. The certified plants are broken
down as follows:••••

Methane fermentation (from biomass): 223 plants
Wood (from forestry): 96 plants
Wood and agricultural waste: 68 plants
Waste from the construction industry: 5 plants

11

Source: European Commission, 2021, ”EU and Japan jointly invest €10,7 million for breakthrough research on advanced biofuels
and alternative renewable fuels”; JST 2021, “JST Press Release#1500”
12
Source: Agency for Natural Resources and Energy -ANRE (2022), “再生可能エネルギー電気の利用の促進に関する特別措置法 情報公表用ウェブサイト”
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Other biomass (includes food waste, used cooking oil, paper and sewage sludge ): 120 plants.

Of the total of 223 biogas plants in Japan, 75 are operated on the northern island of Hokkaido alone. This is due to theconcentration of dairy and fattening livestock farming on Hokkaido and allows a clear geographical differentiationfrom other regions. Biogas plants are comparatively small on average (often 250 kW to 400 kW), which is why electricity generation from biogas accounts for only a small proportion overall. However, the number of FIT-certified plants
is high, with a total of 223.
90% of Japan's bioenergy production comes from solid biomass. This is also where the greatest potential for growthlies. Biofuels have been used since 2010, but only to a small extent (17 PJ in 2019). Biogas is used to the tune of 9 PJ
(source: IEA Bioenergy (2021), “Implementation of bioenergy in Japan – 2021 update” and Deutsche Industrie- undHandelskammer (DIHK) in Japan (2022), “Zielmarktanalyse 2022 mit Profilen der Marktakteure”).
One of the most common technologies used in biomass projects in Japan is wood pellet production:

Fig.13: Wood pellet production volume in Japan from 2012 to 2020 with a forecast for 2021 (2023), (source Statista:“Wood pellet production volume in Japan from 2012 to 2020 with a forecast for 2021”)
As fig. 13 shows the wood pellet production in Japan shows an almost steady increase of more than 50 % from 2021
to 2021 reaching 150.000 tons in 2021.

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5. Market Accessa. Market access conditions
Market entry has been facilitated after the Japan-EU Economic Partnership Agreement (EPA) came into force in February 2019. The EPA removes the vast majority of the € 1 billion of duties paid annually by EU companies exporting toJapan. Once the agreement is fully implemented, Japan will have scrapped customs duties on 97% of goods imported
from the EU13.
When it comes to importing machinery into Japan, the importing company does not require any specific licenses oroperating permits. For the European company that wants to export to Japan, it is recommended to register with therespective European Commission customs office as a registered exporter (REX): https://customs.ec.europa.eu/rex-paui/html/manual/rex___create_pre_application.html#
In this way, the declaration of origin for plant components can be drawn up, if it meets the original. In the agreement
between the EU and Japan on an economic partnership (EU-Japan EPA), a declaration of the origin of a registeredexporter is provided as proof of preference when exporting from the EU (source: European Commission (2019): “EUJapan trade agreement enters into force”). It is recommended to check the current export regulations and proceduresat the German customs office research. (Zoll: “Unternehmen”, refer to: https://www.zoll.de/DE/Unternehmen/unternehmen_node.html). More information and a list of custom brokers available depending on the arrival port/airport inJapan can be obtained from the Japan Customs Brokers Association (JCBA): http://www.tsukangyo.or.jp/profile/english.html.
The EU-Japan EPA Helpdesk can also provide further information: https://www.eu-japan.eu/epa-helpdesk
To benefit from Japan-EU Economic Partnership Agreement (EPA) preferential tariff rates, the product to be exported
need to be originating in Japan or the EU. More detailed information on the Japan-EU Economic Partnership Agreement is given at the European Commission’s website at https://policy.trade.ec.europa.eu/eu-trade-relationshipscountry-and-region/countries-and-regions/japan/eu-japan-agreement_en or at the website of the Ministry of Foreign
Affairs of Japan at https://www.mofa.go.jp/policy/economy/page6e_000013.html
Public tenders:
As in most other countries, Japan requires a public tender for regional as well as international projects, which are
subject to the rules of the World Trade Organisation. This means that even the simplest project must include a construction company or consortium in addition to the owner.
A selection of databases: for public tenders in Japan:- TED (Tenders Electronic Daily)- Tender Notice Portals at the EU-Japan Centre: https://www.eu-japan.eu/government-procurement/tendermonitoring-informations/tender-notice-portals

13

source: European Commission (2019): “EU-Japan trade agreement enters into force”
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Foreign exporters will need to establish and maintain a strong business relationship with local partners to succeed inJapan. Companies hoping to enter the Japanese market should visit the country frequently to cultivate contacts andto better anticipate business conditions (see “recommendations” in chapter 7c).
The actual entry restrictions to Japan can be seen on the website of Ministry of Foreign Affairs in Japan:
https://www.mofa.go.jp/p_pd/pds/page22e_000910.html.
It has been often said that business cost in Japan is higher than other countries and it could be a market barrier forforeign companies. However, in the last three decades, the Japanese government reduced the national standard corporation tax rate from 40% to 23.2% 14. The effective tax rate for corporations is approximately 30%, and this is almost
the same level as for example Germany.
Further information about the Japanese taxation system is available on the website of the "EU-Japan Tax & Public
Procurement Helpdesk" (https://www.eu-japan.eu/japan-tax-public-procurement-helpdesk).

b. Distribution channels
For foreign companies deciding to set up an own business in Japan, there are basically four ways to set up own operations as shown in the table below.
Sales
Agent

Representative
officeLimitation of activities-

Sales activities No
are not allowed

Registration

Not
re- Not required
quiredParty to contract-

Parentpany**Tax obligation--

Itself

Not requiredNot
re- Not required
quiredDisclosure of Financial Infor- mation

14

JapanesebranchRequired*com- Itself***

Incorporation
Kabushikigaisha Godogaisha
No

No

Required

Required

ItselfItselfItselfItself(nopassthrough)Notquiredsource: Ministry of Finance in Japan (2020): 法人課税に関する基本的な資料
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Limitation of liabilities of share- holders (interest holders)

-

No

Yes

Yes

Tab.4: Ways to set up operations in Japan (source: Japan Industry News, “Market Entry and Incorporating in Japan”, 2015)

Trading houses are considered as potential distribution partners. Although the traditional trading houses in Japan are
still considered primarily as commodity traders, these companies have undergone major restructuring. In recent years
they have developed completely new foundations for their business, some of which include the bioenergy sector. A
selection of important trading houses and possible partner companies is given under 6 a “Technology Suppliers / Competitors”.
It could be also useful to approach local companies in the Japanese market and ask them to include your products (e.g.
components for biomass power plants) into their portfolio.
For the local partner, the novelty or uniqueness of a technology is one of the most important criteria. If the technology
is already offered by several competing companies in the market, a Japanese trading company will in most cases refrainfrom cooperating because market entry would then only be feasible at a comparatively high cost. Specialized trading
houses also take on the installation/assembly or commission a local company to do so on their own responsibility,
while a specialist from Europe usually has to travel to Japan to fine-tune and, if necessary, supervise the assembly.
However, other types of cooperation can also be entered into with Japanese companies, including, for example, cooperation on a technological level or joint ventures. In addition, market entry can also be achieved through contacts
with project developers and EPC companies in particular. Membership of one of the industry associations listed in the
appendix is also worthwhile. However, an active role in the association requires personnel with sufficient Japanese
language skills or a registered local presence. In some cases, it may therefore be worth establishing a local representative office. One of the biggest challenges here is finding staff with experience in the industry and sufficient Japanese
language skills.In the heating sector manufacturers of heating systems (e.g. furnace systems, boilers) and installers
could also be suitable distribution partners.
Membership in associations (such as Japan Woody Bioenergy Association, Japan Organics Recycling Association orJAPAN FOREST TECHNOLOGY ASSOCIATION (JAFTA) can provide contacts to multipliers from industry and municipalities and access to an extensive network, including project developers, technology providers, consultants and engineers(also see chapter 6 “Major Players”).

c. Regulations
Import/Export of machinery to Japan
When it comes to importing machinery to Japan, the importing company wishing to distribute foreign machinery inJapan does not require any special licenses or operating permits. For the European company wishing to export toJapan, it is recommended to register with the relevant customs office of the European Commission as a Registered
Exporter (REX).

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In this way, the declaration of origin for the recycling plant components can be drawn up if it corresponds to theoriginal. Under the EU-Japan Economic Partnership Agreement (EU-Japan EPA), a declaration of origin from a registered exporter is used as proof of preference when exporting from the EU. It is advisable to check the current export
regulations and procedures at the German customs office research. More information and a list of custom brokers
available depending on the arrival port/airport in Japan can be obtained from the Japan Customs Brokers Association(JCBA). The EU-Japan EPA Helpdesk can also provide further information.
Technical standard JIS
The Japan Industrial Standard (JIS) is issued by the Japanese Industrial Standards Committee (JISC) which underlies thejurisdiction of METI. JISC works closely with the International Organization for Standardization (ISO) and the International Electronical Commission (IEC). Although JIS is not mandatory and in many cases is very close to ISO, Japanesecustomers prefer to stick to JIS-certified products because the certification process may include certain special Japanese regulations or specifications that apply only to the Japanese market. Especially for foreign companies, the application process can be difficult due to specific regulations and language barriers. However, there are organizations inJapan that can assist foreign companies with the application process, e.g. the Japan Quality Assurance Organization(JQA).
General regulations for Biomass processing plants
Depending on the area where the facility will be developed, permissions from the local governor and/or other governmental authorities will be necessary under the Agricultural Act, Forest Act, Natural Parks Act, Landscape Act, City Planning Act, etc. (as applicable). In addition, an environmental impact assessment is required for certain large-scale hydro,
wind, biomass, and solar projects. Smaller projects may also be subject to an environmental impact assessment underlocal laws. Recently, more local rules have been enacted due to criticism regarding the disorderly development ofsolar projects, etc. With respect to offshore wind projects under the Marine Renewable Energy Act, permission for
exclusive occupancy and use of designated ocean areas is required. Permission is to be granted to selected developers
through an auction process.
In addition Japan has multiple laws that should be considered in the development of renewable energy projects. Thoselaws include the following:
•
•
•
•

15

The Forest Act, which regulates development work in conservation forest areas and forest areas included in
the local forest plan. The Forest Act requires developers to obtain the prior approval of the prefecture governor in order to conduct any development work in such areas.
The Law on Prevention of Disasters Caused by Collapse of Steep Slopes, which regulates development work indesignated steep slope areas.
The Natural Parks Act, which regulates development work in national park areas. The prior approval of or afiling with the Ministry of Environment or the prefecture governor is required in order to carry out development work in such areas, depending on whether the area is located in a national park.
The Environmental Impact Assessment Act, which requires certain industrial projects in the renewable energy
sector to undergo an environmental impact assessment before development begins.15

Source: ICLG - Renewable Energy Laws and Regulations (2023), “Renewable Energy Laws and Regulations Japan 2024”
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d. Trade Fairs➢ BIOMASS EXPO will take place in Tokyo for three days from 28th February 2024, organized by RX Japan
Ltd (co-organized with Japan Woody Bioenergy Association and Japan Organics Recycling Association).
International players in a wide range of biomass field (e.g., fuel, manufacturing equipment, measuring/analyzing equipment, heat utilization technologies, electric generating facilities) will participate in the event.
➢ The 14th annual Biomass Pellets Trade & Power Conference will take place in Tokyo from 13th to 16th May
2024. This event is recognised as Asia’s largest gathering of biomass buyers and suppliers and brings together key stakeholders in the biomass supply chain, from producers of wood pellets, wood chips, palm
kernel shell, and torrefied biomass to traders, utilities, independent power producers (IPPs), and industrial
users across the Asia Pacific region.
➢ FORESTRISE 2024, will take place in Tokyo from 18th to 20th September 2024J. The fair represents theforest business as a comprehensive industry that encompasses forestry industry and woody biomass industry. Among other groups the fair is targeted to: Forest departments of the government / local governments (prefectural, municipal), Forestry management entities, Forest owners, Raw wood markets, Paper
manufacturing companies and trading companies (afforestation division), Academic and research institutions and others.
➢ „Fukushima Renewable Energy Industrial Fair (REIF Fukushima), October 2024, Big Palette Fukushima: The
fair offers companies and/or institutions, who are undertaking businesses in the renewable energy industry and carbon neutrality, to exhibit technology, provide and gather information, hold business meetingsand join networking events. This boosts businesses among industry, academia and government as well as
raising awareness of citizens of the prefecture whilst expressing Fukushima’s strong will to achieve carbon
neutrality by 2050 and become a renewable energy frontier both locally and globally.
➢ „New Environmental Exposition (N-Expo) “,.(Wed), May 22, 2024 – (Fri), May 24, 2024, Tokyo Big Sight,
Tokyo: N-Expo (New Environment Exposition) is the largest environmental exhibition in Asia and will enter
into its 23rd year in 2014. N-EXPO focuses on New Energy, Resource Recovery/Recycling, Air Pollution,
Water Contamination, Soil Contamination and Waste Disposal technologies. The fair is held in May everyyear.
➢ „World Smart Energy Week“: Smart Energy Week is an exhibition where the latest technologies, information, and people gather to accelerate business in the energy industry. The fair gathers a full range of
renewable energy technologies such as hydrogen and fuel cells, solar power, rechargeable batteries, smart
grids, wind power, biomass, zero-emission thermal power generation, etc.
Dates and locations:• February 28 (Wed) - March 1 (Fri), 2024, Tokyo Big Sight• Oct. 2 (Wed) - 4 (Fri), 2024, Makuhari Messe,• Nov. 20 (Wed) - 22 (Fri), 2024, INTEX Osaka, Japan

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6. Major players
a. Technology Suppliers / Competitors
At many biomass plants in Japan, the main biomass-specific components utilize technologies and products made byforeign manufacturers, e. g. turbines and CHPs. The increase of installed powerplants after FIT has caused strong dependency on import of biomass fuels.

Fig.14: Companies involved in biomass/biogas plant manufacturing and operation (Source: JETRO (2017): “Market Report Renewable Energy”)
Examples of major technology suppliers:
The Sumitomo Forestry Co., Ltd described that they expanded five solid biomass plants until June 2021, and started
the operation of a new solid biomass plant in Miyagi Prefecture in November 2023. When including this plant, thetotal electricity generation will be around 251.6MW, which accounts for 5.6% of the solid biomass electricity in Japan(4.5 million kW in March 2023) according to METI. The Idemitsu Kosan Co., Ltd. owns two solid biomass plants, which
totally produce 99.000 kW. Also, Kamitsu biomass power generation, manufactured by GE Steam Power, is estimatedto generate 50MW.
The Japan Woody Bioenergy Association, established in 2015, promotes the appropriate use of woody biomass asenergy. More specifically, they introduced the 19 as membership companies in relation to engineering, construction,
design and facilities. Each company is listed below16:

16

source: Japan Woody Biomass Association (2023), Member list
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AIR WATER INC. https://www.awi.co.jp/en/index.html
OYAMADA ENGINNIERING CO. Ltd. https://oyamada-eng.co.jp/
KARUIZAWA Fire wood, https://karuizawa-firewood.jp/
菊地建設株式会社 https://kikuchi-cons.co.jp/
JFE Technos Co., Ltd https://www.jfe-technos.co.jp/en/
SymEnergy Inc. https://www.symenergy.co.jp/
KOBELCO ECO-SOLUTIONS Co.,Ltd. https://www.kobelco-eco.co.jp/english/
SINTOKOGIO, LTD https://www.sinto.co.jp/en/
TAISEI CORPORATION https://www.taisei.co.jp/english/
TAGAMI EX CO., LTD. https://www.tagamiex.co.jp/en/
株式会社東部産業 https://www.toubu-s.co.jp/about/
TOYO ENERGY SOLUTION Co., Ltd. https://toyo-energy-solution.co.jp/en/
NAS Construction Co.,LTD. https://nas-con.jp/
JAPAN ENERGY BANK Co.,Ltd. https://j-energybank.co.jp/
Fuji Technical Co,LTD. https://fuji-technical.jp/
DO-SEKKEI https://do-sekkei.co.jp/
Mitsubishi Heavy Industries Power IDS Co., Ltd. https://power.mhi.com/jp/group/ids/
合同会社もりほっと https://mori-hotto.com/
RYUOU INDUSTRIAL Co.,Ltd. http://ryuou.co.jp/
Trading houses (Machinery)
Sun Earth Co., Ltd. https://www.sun-earth.jp/?lang=en
SANYO TRADING CO., LTD. https://sanyo-trading.co.jp/eng/home/
MATSUBO Corporation https://www.matsubo.co.jp/en/
MARUMA TECHNICA CO., LTD. https://www.maruma.co.jp/
RYOKUSAN Co., Ltd. https://www.ryokusan.co.jp/
Trading houses (fuels)
ITOCHU ENEX Co., Ltd. https://www.itcenex.com/en/index.html
Inabata & Co., Ltd. https://www.inabata.co.jp/english/
STX CORPORATION https://www.stx.co.kr/eng
MAEHATA CORPORATION https://www.mkw.co.jp/maehata/english/index.htm

b. Customers
i. Cities and municipalities
Numerous cities and municipalities are now participating in the "Nippon Biomass Strategy" and are presenting theirbiomass utilisation plans. There are now almost 300 such "biomass towns" in Japan that are promoting the use of
biomass as an energy source in line with the Nippon Biomass Strategy. Funding for biomass utilisation plants now
exists in several prefectures, with the northern island of Hokkaido playing a leading role. The Japanese Ministry of
Ministry of Agriculture, Forestry and Fisheries (MAFF) give an overview in their presentation available athttps://www.maff.go.jp/e/policies/env/attach/pdf/biomass-3.pdf.
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Fig.15: Visualization of a biomass industrial city (source: MAFF Ministry of Agriculture, Forestry and Fisheries (2022)“The Situation Surrounding the Use of Biomass”)
One example is Shimokawa in northern Hokkaido, where around 90 % of the municipal area is forested. Before theintroduction of biomass, the town relied on fossil fuels for heating in winter. Now the municipality operates a renewable forestry system based on the principle of sustainability, which means not felling trees faster than the forest grows
and reforesting after felling. The wood is processed into wood chips that are used to heat boilers. Around 40 % of local
facilities are heated in this way, including hot springs, day care centres and public housing.
In Tokyo, the city administration switched from fossil fuels to biomass energy back in July 2019 to supply 80 % of its
electricity needs for its two administrative buildings17.

ii. Companies
More and more companies are also using local and sustainable raw materials. Ricoh is one of the companies in Japanthat uses biomass in its operations. At its Eco Business Development Centre in Shizuoka Prefecture, the entire air
conditioning and hot water system is powered by wood biomass, which reduces annual kerosine consumption. With
the support of the city government, the centre sources its woody biomass from a local forestry company that processes
wood from thinning into wood chips.

17source: Energy World October 2020, “Japan becoming an international biomass energy hub”
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In recent years, biomass plants have increasingly been built near paper mills or timber yards, whose residual products
serve as a fuel source. The heat generated can be used for paper production. (source: Energy World October 2020,“Japan becoming an international biomass energy hub”).
In 2020, NTT Anode Energy, which oversees NTT Group's energy business, announced a capital and business alliancewith Forest Energy, a company involved in woody biomass power generation. The company will use thinned wood asfuel to develop energy-efficient small power plants, while NTT will provide electricity storage and DC power supply
technologies to promote the spread of locally produced, locally consumed renewable energy throughout Japan.
In order to reduce the food waste and utilize them, also food industries have been paying more attention to biogas
plants. Some examples are:▪

Fujidelica Quality, company for prepared food in Matsuyama prefecture, installed a biomass plant using
its own vegetable scraps in its factory.

▪

Asahi announced to produce all cans of “Asahi Superdry” by using electricity from biomass plants fromMay 2020 (though food residue is not used as fuels).

▪

'J Bio Food Recycle' established by JFE Engineering Corporation with the cooperation of wholly owned
subsidiary, JFE Kankyo Corporation, started a joint project with East Japan Railway Company and JR East
Environment Access for using industrial and food wastes from public facilities such as station buildings
and meat manufacturing plants, with 80 ton per day of food waste treated in biogas plants by fermentation. This project began as a food recycling business by converting to biogas beginning in August 2018.18

c. Associations & Research Institutes
Some relevant associations and institutions in Japan are:Forest Research and Management Organization
To produce electricity and heat from wood biomass in small-scale facilities which is suitable for the local area, they
develop technologies to supply low-cost wood biomass, stabilize fuel quality, and evaluate economic efficiency.
https://www.ffpri.affrc.go.jp/ffpri/en/index.html
https://www.ffpri.affrc.go.jp/en/pubs/documents/youran-ffpri-en2023.pdf
Forest Energy Research Co., Ltd 株式会社森のエネルギー研究所:
They are continuing various research and development efforts, including the development of a small combined heatand power plant that uses a wood gasification and combustion system, as well as chip drying equipment and combustors. They are a private company, therefore, consultation is also one of their duties.
*No English name was found, hence, it was elaborated by the author.
https://www.mori-energy.jp/

18

DNA India (2018), “Japan generates electricity by recycling 80 ton per day of food waste”
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Japan Forest Technology Association (JAFTA): This association was established in 1921 as a vocational organizationof Japanese professional foresters. They aim to develop and diffuse the technology and science of forestry and tocontribute to the cultural advancement of society through forestry-related activities. They conduct research related
to planning biomass transformation and study to grasp the resources of under-utilized and unutilized lands. There
are works collaborating with government-related organizations.
https://www.jafta.or.jp/index-e.html
JARUS (The Japan Association of Rural Solutions for Environmental Conservation and Resource Recycling): Alignedwith the biomass town project by MAFF, they provide support services. There are four services: helping formulationof biomass utilization, support for ordering facilities, verifying the facility performance, and consultation service.
https://www.jarus.or.jp/
JORA (Japan Organics Recycling Association)
The association provides information on biomass promptly, helps develop human resources, has conferences, andpromotes Biomass products. Notably, they implement and certify the “Biomass Mark” on the product, made frombiomass resources, and as of November 2023, around 2000 products are certified by the association.
https://www.jora.jp/
BPA (Biomass Power Association)
This is a leading association created by the solid biomass power generation industry and was launched in 2016. Their
activities widely range such as information sharing, creating an environment to sustain business management, andmaking policy recommendations to the government.
http://www.bpa.or.jp/

7. Market Potentials and Recommendations
a. Potentials
90% of Japan's bioenergy production comes from solid biomass. This is also where the greatest potential for growthlies. For European companies, there are also opportunities as suppliers of components and entire systems. These canbe brought into the country via a local partner. Specialized trading companies or companies for planning, assemblyand procurement - EPC (Engineering, Procurement, and Construction) companies - are particularly suitable for this. In
particular, a certain novelty of the technology and sufficient differentiation from competitors already active in themarket are crucial.
CHP plants:
There are also increased opportunities in the area of combined heat and power generation. Compact combined heatand power plants (CHP plants) are particularly interesting for the direct supply of electricity and heat for agriculturalbusinesses, industry and waste recycling. Power purchase agreements (PPAs) will also become increasingly important
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in the future. This is likely to open up further opportunities in the future, e.g. for the use of CHP units for food processing companies. A special technology with hardly any Japanese competition is wood gasification in conjunction with
CHP units. However, it should be noted that the infrastructure for district heating in Japan is underdeveloped, so theheating concept must have a local heat consumer when planning. As this will not change significantly, the chances ofintegrating bioenergy into district heating generation are very limited.
Biogas plants:
Compared to Germany, Japan has a smaller number of domestic companies that provide components for or entire
biogas plants. Japan is therefore dependent on technology from abroad. German companies are already strongly represented in this area. As the market for biogas plants is also growing due to the high FIT there is still great potential
for growth here. Smaller plants with an output of 50 kW to less than 1 MW are particularly in demand19.
Components for retrofitting and upgrading for increased energy efficiency:
Components for retrofitting and upgrading to increase the energy efficiency of existing systems are also in demand.
This also includes the reduction of CO2 emissions. One example is the increase in substrate quality for biogas plants,
but components for increased energy efficiency or reduced CO2 emissions are also in demand for other areas of thebioenergy sector.
In addition to the technologies mentioned above, the still immature Japanese market for bioenergy is open to otherproducts with a certain novelty or uniqueness.

b. Challenges and main obstacles for market entry
Despite the many benefits of biomass projects, there are also a number of challenges that need to be overcome inorder to make these projects successful.
Some of the biggest challenges for biomass projects in Japan are:➢ Lack of financing: biomass projects can be expensive to start and operate, and raising finance can be a major
challenge. Especially for Japan higher investment and construction costs should be considered.
➢ Technical difficulties: The technology used in biomass projects is complex and there are many potential obstacles that need to be overcome to make these projects a success. Technology must be adapted to new market. Components such as furnace systems, boilers or gasifiers for example must fulfil safety regulations forearthquakes. This means that, compared to European standards, it must first be clarified whether special reinforcements should be considered.
➢ High quality standards, different regulations must be followed. Detailed information on specific topics suchas standards, regulations and approval procedures, as well as websites of SMEs and authorities, is often only
available in Japanese.
19source: Deutsche Industrie- und Handelskammer in Japan (2022), “Zielmarktanalyse 2022 mit Profilen der Marktakteure”
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www.eu-japan.eu/eubusinessinjapan➢ Resistance from local communities: In some cases, local communities may be opposed to biomass projects
due to concerns about environmental impacts and potential health risks or odour nuisance.
➢ Competition with local players: The Japanese market is relatively mature, with established local players. European companies may face the competition from Japanese companies that already have well-establishednetworks, references, customer relationships, and market knowledge. Building a competitive advantage anddifferentiating themselves from local competitors can be a significant challenge. As a rule, Japanese tend tofavour national products and manufacturers. On top of that, Japanese are of course loyal to their existing
business partners. Partnering with local Japanese distributors, agents, or joint ventures can provide European
companies with market entry support, access to local networks, and distribution channels. Collaborative ventures can help European companies establish a presence in the Japanese market and tap into the opportunities
it offers.
➢ Win a contract for public projects: Although tendering for public projects is common, it is difficult for a foreigncompany to win a contract. Obstacles include the lack of transparency in the tendering process, specific conditions that are difficult for foreign companies to meet, vague evaluation criteria, difficult access to relevant
information and the requirement for prior domestic project references. The best strategy for a European company is therefore to work with a Japanese company, familiarize itself with the tendering process, and gather
domestic references.
➢ High customer orientation and a good corporate image are prerequisites for successful business in Japan.
• Japanese customers are uncompromising when it comes to quality - even cosmetic faults and irrelevantto the function of the product. Japanese companies are quick to question the entire production and logistics process.
• An additional delivery check ex works or on arrival in Japan to ensure "Japanese quality" is recommendable. Also, in the plastic recycling market in Japan, the quality standards are very high, and the requirements for the quality of recycled plastics are strict.
• In a country where "the customer is God", a high level of service and perfect quality is considered normal.
In this view, a deal is not considered closed after delivery, as Japanese customers usually expect freeservice and after-sales support.
➢ Often long decision-making processes: Since decisions in Japanese companies are often the result of extensive
consultations with many people from different departments throughout the organization, the decision-making
process is particularly lengthy, and several meetings are needed to reach an agreement.
➢ Language: A main obstacle and challenge to doing business in Japan still is language. A trained, experienced
Japanese interpreter is recommended for discussions and negotiations with potential business partners or
customers.
Special remarks for plants generating electricity from solid biomass (such as power stations or CHP’s):➢ In general, the current limited access to the electricity transmission grid for renewable electricity generation
plants is considered as one of the factors hampering the growth of renewable energy in Japan. In several
regions of Japan, large utilities that also own the transmission grid regularly refuse to buy electricity from solar,
wind, and biomass plants because of a lack of free capacity in the grid.
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of electricity source (renewable energy or large fossil fuel power plants). Accordingly, the transmission capacity of the electricity grid will be ensured in the order applications are submitted. Even if the planned and built
power generation is not in operation, the capacity is included in the calculation. In order to assess whether
there is still free capacity in the power lines, the situation of a power failure must also be taken into account.
For this reason, the maximum transmission capacity with two transmission lines is only 50 % (with three ormore transmission lines, this can be up to 70 %). Among other reasons, in some cases this situation prevents
the connection of renewable energy installations. Several renewable energy suppliers are still waiting to beconnected.
Another possible obstacle is that several grid operators only allow electricity feed-in with a limited capacity
for new biogas plants. In some regions, for example, only biogas plants up to a power of 50 kW can be connected to the public grid.
➢ In order to significantly increase the supply of energy from renewable sources - as advocated in the government's Basic Energy Plan - both the government and the energy industry now started to maximize the efficientuse of the transmission grid. As a first measure to strengthen and stabilize the Japanese transmission grid in
the future, the independent "Organization for Cross-regional Coordination of Transmission Operators" (OCCTO) was founded in 2015. This is responsible for monitoring and controlling the supply and demand of electricity. Its duties include planning work in order to sustainably promote interregional interconnection and frequency conversion (as for the electricity grid Japan uses 2 different frequencies: 50 Hz in Eastern Japan and 60
Hz in Western Japan). Other solutions include the introduction of smart grids and the recalculation of the gridsituation.
Especially for biogas technologies there are additional challenges:➢ Waste producers are often far away which implies a necessary establishment of a transport network whichsometimes involves considerable effort and additional costs. However, it may be an advantage that the establishment of such a transport network can also have an influence on the delivered substrate by encouraging
improved waste separation on site and sensitising the parties where the food is produced to the issue of biogas
and renewable energies. If one forms a network or concludes partnerships beforehand, the transport network
can also be used for other tasks, thus minimising costs.
➢ In some cases, access to feedstock sources (e.g., food waste or livestock manure) must be developed as a firststep. In this case, communication with the local community, waste producers, network operators, authorities
and other persons is necessary for the operation of a biogas plant. Therefore, access to local decision makers
and some lobbying might be necessary, which can hardly be sone without a local partner.
➢ Plant operators have to be trained, not only regarding technical aspects of the biogas plant but also the selection of usable substrates. The composition and quality of substrates may change during the operation period
and, if the plant operator is not experienced or if the operator is not properly trained, biogas production may
decrease.
➢ Technology must be adapted to new market as for example different voltages, and partly also different net
frequencies have to be considered. The grid connection must be clarified with the electricity supplier before
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the application for FIT is submitted to METI. It should also be noted that in Japan there are still some regions
such as Hokkaido and Kyushu with capacity bottlenecks in the power grid. Here possible additional costs are
incurred if the network operator decides in a specific individual case that the network must be expanded.
➢ components such as digestion tanks must fulfil safety regulations for earthquakes. This means that, comparedto European standards, it must first be clarified whether special reinforcements especially for digestion tanks
or materials (such as stainless steel which is for example more flexible than concrete) should be considered.
Despite these challenges, the Japanese government remains committed to expanding the use of biomass energy, andnumerous projects are already underway to help overcome these challenges and bring biomass energy to the forefrontof the country's renewable energy efforts.
Japan is a world leader in the use of biomass energy, and its projects set the standard for innovation and sustainability.
With continued investment and commitment, biomass energy will play an important role in Japan's future energy
landscape.

c. Recommendations
When European manufacturers of biomass technologies enter the Japanese market, it is essential that they tailor theirapproach to the specific needs and requirements of the Japanese market. To be successful in the Japanese market,
European companies should pay close attention to the following factors:•

Collaboration is a key element of Japan's biomass industry. Companies actively collaborate with government
agencies, research institutions, and other stakeholders to share knowledge, expertise, and best practices.
These collaborative efforts promote continuous improvement, technological innovation, and the developmentof efficient processes. The collective expertise of various stakeholders helps Japanese companies stay at theforefront of industry advancements. The collaboration pattern is various. Some are cooperating with universities and companies, or governments and associations.

•Time and human resources are required: Entering the Japanese market requires significant financial, time andhuman resource investments. A thoughtful long-term approach is necessary to achieve success and make apositive impact in this demanding market.

•

Utilize supporting organizations such as embassies, chambers of commerce, JETRO and the EU Japan Centre
for Industrial Cooperation to access valuable market information and market entry assistance.

•

Customers are expecting high quality and an intensive after-sales-service, which should best be carried out
by a specialized Japanese service company. Existing customers need to be visited regularly, not only for business purposes but also to be visible and to maintain the relationship. It is important to continue to be seen as
demonstrating a serious willingness to operate in the Japanese market and to deepen the relationship withJapanese partners. Ensure that both products and associated services, such as sales, after-sales support andmaintenance, are of an exceptionally high standard, as the Japanese market demands top quality.

•

Select reliable partners: Carefully select reliable partners to work with, as they can have a significant impact
on the success of market entry.

•

Build strong customer relationships: Focus on building and maintaining excellent customer relationships. Regular visits, including courtesy visits, are essential to build trust and visibility.
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www.eu-japan.eu/eubusinessinjapan•

Build local networks: Work on building local networks and personal relationships as these play a vital role inbusiness development and success.

•Attending important trade fairs: Participating in prominent trade shows is essential for gaining exposure andnetworking.

•Detail and image: Japanese consumers value attention to detail, so invest in areas such as professional interpretation services to ensure clear communication and a positive image.

•Highlight EU origin: Capitalize on the excellent reputation of European environmental technologies andproudly display EU origin, especially for companies from Germany, the Netherlands, and the Nordic countries.

•

Interpreters: Never skimp on a highly qualified interpreter, as this person represents the company and needs
to understand and convey more than just words.

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8. References
Agency for Natural Resources and Energy – ANRE (2022), “再生可能エネルギー電気の利用の促進に関する特別措置法 情報公表用ウェブサイト”, https://www.fit-portal.go.jp/PublicInfoSummary, accessed on 23.01.2024
Argus Media Group, (2023), “Japan's June biomass imports rise on year”,
https://www.argusmedia.com/en/news/2474909-japans-june-biomass-imports-rise-on-year, accessed on 02.11.2023
BIOMASS EXPO, “About INT'L BIOMASS EXPO”, https://www.wsew.jp/hub/en-gb/about/bm.html, accessed on
10.11.2023
Biomass Magazine (2023), “Report: Japan's import of wood pellets to increase in 2023”, https://biomassmagazine.com/articles/report-japans-import-of-wood-pellets-to-increase-in-2023-20323; based on Data of Japan Customs,
accessed on 10.11.2023
Biomass magazine (2022),” Report: Japan imports 3 million metric tons of pellets in 2021”, https://biomassmagazine.com/articles/report-japan-imports-3-million-metric-tons-of-pellets-in-2021-18610, accessed on 10.11.2023
Deutsche Industrie- und Handelskammer in Japan (2017): “Zielmarktanalyse Japan 2017” based on data from Fuji
Keizai Group (2015), https://www.oav.de/fileadmin/user_upload/ZMA_Bioenergie_in_Japan_2017_FINAL.PDF, accessed on 10.11.2023
Deutsche Industrie- und Handelskammer in Japan (2022), “Zielmarktanalyse 2022 mit Profilen der Marktakteure”,
https://www.german-energy-solutions.de/GES/Redaktion/DE/Publikationen/Marktanalysen/2022/zma-japan.pdf?__blob=publicationFile&v=3 accessed on 23.01.2024
Energy World October 2020, “Japan becoming an international biomass energy hub”, https://issuu.com/energyinst/docs/hi_res/s/11069932, accessed on 21.11.2023
e-Stat (2023), “ 木 質 バ イ オ マ ス エ ネ ル ギ ー 利 用 動 向 調 査 ”, https://www.e-stat.go.jp/statsearch/files?page=1&toukei=00501008, accessed on 24.01.2024
EU-Japan Centre (2015): “Waste Management and Recycling in Japan”, https://www.eu-japan.eu/sites/default/files/publications/docs/waste_management_recycling_japan.pdf, accessed on 21.11.2023
EU-Japan Centre (2021): “The Market for Biogas Plants in Japan and Opportunities for EU Companies”,
https://www.eu-japan.eu/eubusinessinjapan/library/publication/report-market-biogas-plants-japan-and-opportunities-eu-companies, accessed on 21.11.2023
EU-Japan Centre (2023), Tender Notice Portals: https://www.eu-japan.eu/government-procurement/tender-monitoring-informations/tender-notice-portals
EU-Japan EPA Helpdesk (2023), https://www.eu-japan.eu/epa-helpdesk

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EU-Japan (2023), "Japan Tax & Public Procurement Helpdesk", https://www.eu-japan.eu/japan-tax-public-procurement-helpdesk.
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