Recommendationsof theEU-Japan Business Round Table
to the Leaders of the European Union and JapanTokyo, 8 & 9 April 2014
Working Party E
Energy, Environment, and Sustainable Development

Working Party Leaders:

Mr. Armand LAFERRERE
President
Areva Japan Co., Ltd.

Mr. Hajime SASAKI
Honorary Advisor
NEC Corporation

Working Party E: Energy, Environment, and Sustainable Development
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Introduction
Harnessing a low-cost, abundant, safe and sustainable energy supply is key to both
Japan and the EU to meet the energy demands of their companies, industries andpeople while addressing several other challenges, such as transforming energy
systems, reducing energy needs and greenhouse gas emissions, and protecting theenvironment, while at the same time ensuring each region’s preparedness for natural
disasters and crisis management.
One asterisk (*) identifies “priority” Recommendations, two asterisks (**) identify “toppriority” Recommendations. (e.g. WP A / # 01** / EJ to EJ)

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Recommendations from both
European and Japanese industries
WP-E/#01*/EJ to EJ

Changes and harmonization in energy and environment

・ Significant geopolitical risks in energy-supply areas
The Arab Spring revolution that was triggered by the Jasmine revolution in Tunisia in
December of 2010 and spread throughout the Middle East and North Africa, including
Jordan, Egypt, and Bahrain, has created political and social instability in the Middle
East, a region that supplies a large portion of the world’s energy.
The road to stability in oil-producing countries such as Iraq, Libya, Algeria, and Iranremains unclear.
For Japan, a country that imports more than 80% of its oil from the Middle East,
securing the energy required to support the country’s economic activities is an issueof vital importance. This applies also to EU, whose average oil import dependency is83%.
Recent events in Ukraine and Russia also raise concerns over security of gas
supplies as the EU-27 imports more than 60% of its energy needs in gas, a quarter ofwhich from Russia.
Energy importers also continue to face security issues such as combating piracy off
the coast of Somalia and maintaining access to sea lanes such as the Suez Canaland the Strait of Hormuz. Japan and the EU should therefore enhance international
collaboration to preserve energy security.
・ Increased energy demand from emerging countries affects the energy policy ofother countries’ and price stability
As the world’s population continues to increase, the main consumption of energy isshifting from developed to emerging countries. In the long term, exports of shale gas
from the United States may help stabilizing both energy prices and supply; however,the development of resources by state-owned enterprises from the emerging
countries will lead to severe competition to secure stable supplies at affordable
prices .
Japan and the EU should cooperate to stabilize natural resources prices andestablish an energy mix policy that reflects the actual energy policy in each country
so that private-sector corporations can continue to carry out stable business activities.
・ Increase in greenhouse gas emissions and its impact on the environment
Global warming will cause an increase in the acidity of the oceans, raise sea levels,and severely affect many aspects of human life such as agriculture, forestry andfishing, ecosystems, water resources, and human health. Government, industry, andacademia in Japan and EU should deepen their dialogue on measures to mitigate
global warming. In Japan, in order to reduce green house emissions, restarting thenuclear power plants needs to be thoroughly considered.
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WP-E/#02**/EJ to EJ Basic energy policy
It is crucial for the EU and Japan to secure stable energy supplies and to reduce theirenergy needs while supporting the development of their economic infrastructure in anaffordable manner.
・ Striking balance among stable energy supply, economic efficiency,
environmental issues, and safety regulation
Energy is the basis of all economic activity. Securing a stable energy supply at areasonable price, developing the necessary infrastructure as well as reducing energy
needs are not only crucial for sustainable business activities but also for the creationof new business opportunities. At the same time, it is important to consider theenvironmental impact of energy use. Japan and EU should establish energy policies
which preserve a role for nuclear power, one of the effective means of reducing
greenhouse gas emissions, while paying utmost attention to safety..
・ International coordination
The acceleration of the global demand for energy, particularly in Asia, combined withan increase in the diversity of available energy sources such as natural gas,
renewable energy, and nuclear energy, is transforming the global pattern of energy
supply and demand. At the same time, the negative impact on the environment of
human energy use makes the adoption of rational energy policies more urgent andcomplex.
Japan and EU should create a comprehensive and collaborative framework to handle
the inter-relationship between energy and environment issues.
Japan and EU should also deepen their cooperation through their participation in the
IEA and IAEA, as well as through information exchanges at other relevantinternational meetings in which they participate.

WP-E/#03*/EJ to EJ Energy policy timeline and energy mix policies
・ Short, Medium and long-term energy policies
Large-scale natural disasters, such as the Great Eastern Japan Earthquake,
underscore the challenge of providing energy in an emergency. The earthquake also
demonstrated that, in order to maintain an uninterrupted supply of energy logistics
issues such as the repair of roads and ports, securing tank lorries, tankers and otherappropriate means of transport, and setting up supply bases, must be solved.
Geopolitical instability can also contribute to fluctuations in resource prices as aresult of speculative purchases. The EU and Japan should establish both a shortterm energy strategy for handling crisis situations, such as the immediate aftermathof a natural disaster, and a long-term energy mix strategy that will provide a stablesupply of energy in the face of inevitable changes in geopolitics.

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・ Promoting supply stability through a multi-layered energy policy
All sources of energy sources have their strengths and vulnerabilities; no energy
source can meet all demands for stability and affordability. Therefore, it is necessary
to build a multi-layered energy supply system supported by an adequate powertransmission infrastructure that can function both in normal times and during crises.
・ Creating an energy mix that allows for regional variations and cost
In Japan and the EU, there are some regions blessed with abundant energy
resources, and some that are not.
While some regions have already established an inter-dependent power exchangesystem, with other countries, some countries have no close neighbours and havetherefore had to build an independent supply system.
Deliberations by Japan and EU concerning the stable and safe supply of energy,
economic efficiency, and environmental issues should take into account theseregional variations.
・ Creating and maintaining an effective energy infrastructure
To secure a stable and affordable supply of energy, Japan and the EU should share
best practice on how to build an energy value chain capable of executing theirchosen energy mix policies and consider measures to replace outdated equipment
and facilities to improve safety.

WP-E/#04*/EJ to EJ Fossil fuels
・ Advantages and disadvantages of coal, oil, natural gas, and LP gas
Fossil fuels emit greenhouse gases, but have an advantage in terms of cost andstable supply. Research into making the use of fossil fuels more efficient andreducing CO2 emissions is ongoing. Japan and EU should support this research andthe use of more energy-efficient and cleaner fossil fuels by developing countries.

WP-E/#05**/EJ to EJ Nuclear power・ Nuclear power is an important and competitive source of energy, in particular
for regions with no other economically extractable energy resources.
The accident at the Fukushima Daiichi nuclear power plant demonstrated the needfor failsafe systems, based on a thorough analysis of the causes of the accident, torestore public confidence in nuclear power.
Safe nuclear power generation can play an important role in the energy mix of the EU
and Japan. It could be a valuable asset supporting EU and Japanesecompetitiveness, supplying base load electricity at low cost and contributing to gridstability, economic growth and jobs creation.
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・ Rising global expectations for nuclear energy and the necessity for anenhanced safety framework
Many countries throughout the world are looking to nuclear energy to release themfrom their dependency on fossil fuels, and are evaluating schemes to adopt nuclear
power. The EU and Japan should cooperate to provide education and training toassure the safety of nuclear power generation.
・ In Japan, accelerating the restart of nuclear power plants in areas verified as
safe
The cost of generating power in Japan in fiscal 2013 greatly increased due to the useof thermal power plants to compensate for the lack of nuclear power generation. Thishas caused a rise in electricity prices, affecting the competitiveness of the activities ofboth the EU and the Japanese industries in Japan, as well as increased GHG
emissions. In terms of both economical reasons and reducing greenhouse gas
emissions, it is necessary to restart those nuclear power plants that are verified as
being safe by the safety authority.
・ Replacing ageing nuclear reactors with safer models
The latest nuclear reactors are designed to very high safety standards. It is therefore
necessary to explore the possibility of using these state-of-the-art reactors in futureenergy mixes, and also consider replacing some ageing reactors, in both the EU andJapan.
・ Nuclear fuel recycling
Japan and the EU should work together to devise a safe and efficient method ofrecycling nuclear fuel.
・ Financial support
To assure the highest level of safety, Japan and the EU should promote investment
in nuclear energy, and at the same time, encourage financial institutions such as theWorld Bank, the European Bank for Reconstruction and Development (EBRD), theEuropean Investment Bank (EIB), and the Japan Bank for International Cooperation(JBIC) to provide finance for projects that promote the safety of nuclear power.

WP-E/#06**/EJ to EJ Safety measures
・ Measures to assure safety
Japan and EU should cooperate bilaterally and in the relevant multilateral fora on all
aspects of nuclear energy, in particular the development and effective
implementation of harmonized international nuclear power safety standards.
・ Consultation
Japan and the EU should continue their specialist such as consultations concerning
information and technologies related to decommissioning nuclear reactors,
decontamination, and radioactive waste treatment at nuclear power plants.
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WP-E/#07**/EJ to EJ Renewable energy
・ Advantages of renewable energy
Uncertainties remain about the cost and security of supply of renewable energy. But
it has the potential to complement conventional energy since it does not emit
greenhouse gas, can reduce import dependency, and be securely utilized through abalanced network. To answer these uncertainties, it is therefore important to correctly
assess the total cost of renewable energies along their value chain, and toencourage research into the practical stage of renewable energy sources.
・ Practical project approaches with respect to renewable energy sources
Renewable energy sources are available in many forms, including wind, solar, hydro,
geothermal, tidal, biomass, etc. However, with the exception of hydro, which isalready a power supply base to a certain degree, renewable energy remains unclear
in terms of economic potential, efficiency, and stable supply due to variations inavailability to different regions. It is therefore necessary to study carefully how the
adoption of renewable energy sources will be specifically carried out.
・ Storage batteries
Storage batteries can contribute to ironing out fluctuations in the supply and demandfor energy. As a convenient way of storing electricity and thermal heat, they can beused at any time and in any location.
Thanks to the development of Smart Grids, storage batteries have the potential foruse in a wide variety of applications, including cars, houses, and commercial
buildings. Japan and EU should continue to cooperate in the development of storage
battery technology and the harmonization of standards, in order to achieve low-cost
production and to improve energy efficiency.

WP-E/#08**/EJ to EJ Energy conservation and energy efficiency
・ Enhancing energy conservation in all fields
The construction of energy efficient buildings, as well as the energy efficientrenovation of domestic houses and office buildings with high level insulationmaterials and high-performance windows, are very effective in reducing energy
consumption.
The development of energy-saving technologies for electrical equipment, such as
refrigerators, air conditioners, servers and LED lights, is also ongoing. In thetransport sector, Hydrogen Fuel Cell Vehicles have considerable potential to makeautomobiles more energy efficient. Japan and the EU should work together todevelop harmonized standards to facilitate their early market introduction.
In all fields, it is clear that the implementation of energy management systems is aneffective means for improving energy efficiency.
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Japan and the EU should consider taking further measures to promote energy
conservation, by financing research projects to develop technologies andmethodologies for improving energy efficiency and by sharing their best practices. At
the same time, the reality is that active measures must be complemented by passive
measures, which affect building insulation and temperature stabilization, and thegovernments of both countries must be encouraged to support such moves. In
particular, setting mandatory regulations for building standards and house insulation
plays a major role in reducing energy consumption.

WP-E/#09*/ EJ to EJ Energy researches and international cooperation
・ Energy researches for reducing greenhouse gas emissions and developing
energy technologies for achieving long-term goals:
The emission of greenhouse gases that trigger climate change and impact theenvironment is an issue that affects the entire human race, and requires international
knowledge and cooperation to solve. Global-scale research is therefore required todevelop renewable energy sources and assure the safety of nuclear power, as well
as explore new energy fields such as methane hydrates.
・ Human resources development
Energy is crucial for every nations and industries. Japan and the EU should consider
how to create systems to train and develop human resources to become energyrelated specialists.

WP-E/#10**/ EJ to EJ Importance of measures against global warming
Mitigating global warming is a global challenge. Emerging countries are alreadyovertaking developed countries as the world’s major greenhouse gas emitters. It isconsequently imperative that emission reductions are also undertaken by emerging
countries. Japan and the EU should work together to create a comprehensive andeffective mechanism for reducing global greenhouse emissions.

WP-E/#11*/ EJ to EJ Measures to be taken by Japan and EU to reducegreenhouse gas emissions
・ Situation in Japan following the Great Eastern Japan earthquake and issues tobe resolved
The scenario initially envisioned by Japan of reducing greenhouse gas emissions byincreasing nuclear power generation has been derailed by the Great Eastern Japan
earthquake and subsequent accident at the Fukushima Daiichi nuclear power plant,
following which all of Japan’s nuclear power plants remain idled and the country
continues to rely heavily on fossil fuels.
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Japan is now working on determining the specific details of its COP19 agreement,
which is to establish voluntary post 2020 reductions that are to be measured,reported and mutually verified by other countries.
A government plan to move the country in the direction of restarting some of the idled
nuclear reactors, known as the Basic Energy Plan, has been drafted; however, theunresolved nature of the unstable energy supply continues to suppress corporate
investment. For these reasons, and also to help mitigate global warming, thegovernment of Japan should urgently present a comprehensive vision of thecountry’s future energy mix.
・Measures to be taken by the EU:
In January 2014, the EU Commission published a white paper policy framework forclimate and energy for the period from 2020–2030, proposing a cut in carbon
emissions by 40 % below the 1990 level in 2030. Such a single ambitious CO2
emissions reduction target by 2030 is, together with the structural reform of theEuropean Trading System, a key signal to return to robust prices for CO2.
Furthermore, it would give a strong signal of the EU’s commitment to fighting against
climate change before the upcoming international negotiations (COP21 in 2015). It istherefore important EU maintain such ambitious objectives and the means to achievea cost-effective decabornisation in the long-term. A global dialog on these issues
should also be maintained.

WP-E/#12*/ EJ to EJ International contributions
・ Contributions by Japan and EU to global warming countermeasures
It is important for developed and developing countries to cooperate on measures tomitigate climate change by creating mechanisms to achieve lower carbon growth.
Advanced technologies, products, and expertise from Japan and EU can contributeto mitigating global warming worldwide.
Bilateral offset mechanisms are an effective solution for emerging countries, whoseenergy demand is increasing rapidly, to reduce greenhouse gas emissions. Japanand the EU should work together at both government and industry level to design
systems to support emerging countries in their efforts to combat t global warming.
・ Visualization of emissions reduction results“Visualizing” CO2 emissions reduction results is an effective way to verify the impactof low-carbon technologies and energy-saving products. Specific methods tovisualize reduction results should be developed through public-private collaboration.
・ Protecting intellectual property rights and developing human resources
An appropriate regulatory framework to ensure the protection of intellectual property
rights (IPR) is needed to promote the transfer of commercially developed
technologies. Japan and EU should help emerging countries to create such a
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framework in by providing advice on the adoption of supervisory systems, training ,support for licensing, and encouraging technical collaboration.

WP-E/#13*/ EJ to EJ Environmental technology collaboration
・ Promoting innovative R&D projects to reduce greenhouse gas emissions inJapan and EU
Japan and EU should promote joint R&D between industry, academia, andgovernments to develop innovative technologies that can be used to reducegreenhouse gas emissions.
・ R&D projects
Developing advanced and innovative technologies from the initial research phase,
applying them to products, and promoting their use requires considerable time andmoney. Japan and the EU should therefore provide mutual access to the results of
R&D projects implemented with government support.

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