Recommendationsof theEU-Japan Business Round Table
to the Leaders of the European Union and Japan
Brussels, 11 July 2017
Working Party 4
Energy, Environment, Sustainable Growth(Final Version)

Working Party Leaders:Dr. Mark Pleško
President
Cosylab Inc.

Mr. Norihiko Ishiguro
Senior Executive Vice President
NEC Corporation

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Introduction
Japan and the EU would like to support the final statement of the Paris Agreement, afair and effective framework adopted by consensus of all countries participating in the2015 United Nations Climate Change Conference (COP21)., and its follow up at
COP 22 in Marrakech from November 7 to November 18, 2016.
We therefore regret the recent announcement of the United States to withdraw fromthe Paris Agreement, which marks a severe setback for the global efforts to protect
our climate. Despite the US decision, moving backwards on climate protection is not
an alternative. The EU and Japan should stay fully committed to implementing theParis Agreement. We hope that the US decision will not have spill-over effects on thecommitment from other countries especially major economies. The EU and Japancannot shoulder what other major economies have committed to deliver. We
therefore call on decision-makers to engage as soon as possible in a dialogue with
the EU and Japanese business community to assess the implications of the US
decision.
Also, EU – Japan BRT support G7 Taormina Leaders’ Communique on May 26-27,
2017, which Japan and EU reaffirmed their commitment to swiftly implement theParis Agreement, as previously stated at the 2016 Ise-Shima Summit.
The issue of climate change is one that must be addressed through the cooperationof all countries and people. Amidst the recent inability of international conferences tocome to conclusions on other important issues requiring international-level
discussions, the fact that the Paris Agreement was agreed upon by countries aroundthe world in such a short period of time makes it particularly noteworthy. To ensurethat all major emitting countries ratify this agreement, as well as to enhance its
fairness and effectiveness, it will be imperative to establish a system with which thepromises made by each ratifying country and the fulfilment of these promises can bereviewed internationally.
Meanwhile, Japan and the EU will not only need to steadily implement the domestic
measures that served as the basis for the formulation of their intended nationallydetermined contributions (INDC) but also undertake the tasks of developing lowcarbon technologies and transferring technology to developing countries withsignificant potential for making reductions. In regard to energy issues, fossil fuelscontinue to be a mainstream energy source even today. Going forward, it will benecessary to act in accordance with the Paris Agreement in order to achievegreenhouse gas reductions, as outlined by the B20 in 2017.
For Japan and the EU, it will be crucial to carry on with efforts to secure safe, stable,
economical, and sustainable energy. The governments, enterprises, industries, andcitizens of Japan and the EU must not only prepare for natural disasters that could
potentially occur in each region as a result of global warming and implement crisis
management measures but also address energy system reform, the reduction ofenergy demand and greenhouse gases, and the resolution of environmental
conservation and other problems.
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Recommendations from both
European and Japanese industries
WP-4/#01/EJ to EJ Change and harmony in the areas of energy and theenvironment
Diversification and destabilization of resource- and energy-supplying regions:
While the diversification of energy and resource supply sources through the fullscale export of shale gas by the U.S., the lifting of sanctions on Iran, and othercircumstances is contributing to stable energy supplies and the stabilization of abrupt
and erratic price fluctuations, the Middle East still plays a major role in the supply ofenergy to the world, and breeding grounds for civil war and terrorist activities exist
within the region due to the continued fragility of some governments there.
We have also begun to see signs of sectarian violence and terrorism even in
Middle Eastern regions that have been comparatively stable up until now. Moreover,in light of piracy issues off the coast of Somalia, it remains important for us to ensure
the safety of sea lanes, including the Suez Canal and the Strait of Hormuz. The
governments of Japan and EU countries will continue their efforts to strengthen
cooperation among members of the international community to improve energy
security.
The significant impact of the destabilization of energy prices on Japan and EU
countries that import energy:
There are both positive and negative aspects to the fall in oil prices for consuming
countries.
Growing dependence on oil from the Middle East, the world’s low-cost resource
superpower, means that the risk of a sharp rebound in price in the event of shrinking
oil investment would offset the economic benefits. And if the price drops to such alevel that it does not bring investment to the supply sector, there will also be growing
concern over the stable supply of natural gas. Furthermore, incentives for the use ofbio fuels do not seem to be working, and there has been a major impact on
investment in energy efficient technologies and energy conservation measures. Also,in the unlikely event that a resource-rich country was to fall into a national financial
crisis, it could lead to growing geopolitical risks and the preservation of terrorist
organizations.
Although declining resource prices have contributed to the short-term improvementof trade deficits in Japan and EU countries, it is important for these countries to fully
understand the impact that the stabilization of resource prices can have on energy
security, energy conservation, and energy efficiency, and to act accordingly.
The impact of rising energy demand in newly developing countries on nationalenergy policy changes and resource prices:
At COP21, expectations were high for efforts toward the introduction of energy
systems that are not only more low carbon but also more efficient. However, as wasseen at COP 22, all participant countries must ensure that advances arematerializing not only in words, but also in real progress. Indeed, as was also
introduced in IEA WEO-2015, world energy consumption in the future will be driven
primarily by India, China, Africa, the Middle East, and Southeast Asia. It is predictedthat energy consumption will increase by one-third of present consumption by 2040,
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and that the entire increase will be due to consumption in non-OECD countries. The
reduction of energy consumption in OECD countries is the result of demographic
changes, economic structure changes, and growing efficiency. By 2040, energy
consumption according to the International Energy Agency is expected to decreaseby 15% in Europe, 12% in Japan, and 3% in the U.S. With the world population
expected to continue growing in the future, the majority of energy consumption isshifting from developed countries to newly developing countries. While the export ofshale gas by the U.S. is expected in the long run, aggressive resource development
by state-owned companies in newly developing countries is currently being
witnessed and competition for resources is becoming fierce.
Japan and the EU are committed to working together to stabilize resource prices
and implement energy mix policies suitable for regional needs that will enable
companies to continue their business activities in a stable manner.
WP-4/#02*/EJ to EJ Basic energy policies
Harmonization of supply stability, economic efficiency, the environment, and safety
standards:
Energy forms the foundation of economic activities. Efforts to reduce energy
demand while at the same time ensuring the stable supply of energy and properelectricity rates are not only critical to business operations but also have a profound
impact on the creation of new business opportunities. It is also important to give due
consideration to environmental load. Based on this perspective, the governments ofJapan and EU countries should carefully consider the future role of nuclear power
generation.
Cooperation with other countries from a global point of view:
In regard to the energy demand and supply structure of the world, changes indemand are occurring primarily in Asia, and the diversification of energy sources
such as natural gas, renewable energy, and nuclear power is becoming more
pronounced. Meanwhile, the impact on the global environment is being exacerbated,and energy issues are becoming even more complex.
Amid these circumstances, Japan and the EU must promote a framework for amore comprehensive collaborative alliance from the viewpoints of energy and theenvironment.
As such, it will be imperative to not only deepen our relationship with the IEA and
IAEA but also strengthen cooperation by exchanging information with our European
counterparts in various international committees.
Short-, medium-, and long-term energy strategies:
All of the countries participating in COP21 have affirmed their commitment tocontrolling carbon dioxide emissions as a countermeasure against global warming.
The key to this will be to balance economic growth with the reduction of CO2
emissions. And while the decision to engage in global efforts to cut CO2 emissions
was made at COP21, it will be essential to ensure that these efforts are paired witheconomic growth to make it possible to move forward with them in a sustainable
manner. Carbon pricing, as suggested by Policy Paper 2017 of B20 Taskforce –Energy, Climate and Resource Efficiency, might help to do so, although its pros andcons need to be carefully studied before implementation.
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Going forward, it will be important for governments, industries, and citizens todevelop a solid understanding of the current energy situation and consider whichchanges are temporary or cyclical, and which are permanent. In addition, it will benecessary to determine what kinds of risks and chances are conceivable for the
future, identify what can be done to make our energy systems more secure, reliable,
and sustainable, and consider short-, medium-, and long-term energy strategies.
Achieving a stable supply of energy through a multi-layered energy supply structure:
There are invariably advantages and disadvantages to the adoption of every
energy source, and there is no form of energy that provides complete satisfaction
from both a stability and economic standpoint. In view of this, a multi-layered energy
supply structure capable of functioning not only during times of peace but also in
emergencies should be established.
Maintenance and upgrading of energy infrastructure:
To ensure the stable and adequate supply of energy, Japan and the EU must share
best practices for the construction of an energy value chain capable of achieving theprescribed energy mix and consider the upgrading of old equipment and facilities toimprove their safety.
WP-4/#03/EJ to EJ Fossil fuels
Advantages and disadvantages of coal, oil, natural gas, and LP gas:
Although fossil fuels are known to emit greenhouse gases, they do excel in termsof economic efficiency and supporting grid stability against a backdrop of increasing
portion of renewable energy sources. Progress is currently being made toward thedevelopment and commercialization of highly efficient low-carbon alternatives, andgovernments should be providing support for these development andcommercialization efforts, as well promoting the use of these alternatives indeveloping countries.
Still valued today as an important base-loaded power supply, coal-fired thermal
power poses little geopolitical risk as many countries enjoy its own indigenous sourceof coal. Additionally, increased production of commercially competitive shale gas in
the United States has brought down the price of natural gas which holds even lower
emission profile compared to coal. It should also be noted that fossil fuels remain low
in price as a form of thermal energy in developing countries. Nevertheless, thesedevelopments should not elude the necessary transition from coal-fired to gas-fired
power stations. Among other technologies, gas-fired power plants can provide forsecurity of supply and bring stronger benefits on flexibility – as compared to coal-fired
generation – to the energy landscape, in particular with a growing share ofintermittent renewable energy sources.
Japan and the EU should collectively contribute to countermeasures against global
warming by supporting the introduction of thermal power technology characterized byhigh efficiency and low CO2 emissions, such as ultra-supercritical coal-fired thermal
power, gas-fired combined cycle thermal power, etc.

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WP-4/#04/EJ to EJ Nuclear power
There is keen interest in nuclear power generation from the viewpoints of promoting
measures against global warming and stably securing energy that is less susceptible
to fluctuations in fossil fuel prices.
Nuclear power generation is also expected to play a major role in keeping the
global temperature rise this century below two degrees Celsius, which is the longterm aim of the Paris Agreement reached at COP21. However, if we attempt toachieve this without nuclear power, the cost of doing so will increase dramatically. At
the same time, it would lower the feasibility of achieving this aim, and we therefore
believe it will be impossible to reach the COP21 objective without the inclusion of
nuclear power generation.
A critical and competitive base-loaded power supply in regions without energy
resources:
Safe nuclear power generation plays an important role in the energy mix for Japanand the EU. Moreover, it contributes to giving Japan and the EU a competitive edge,
securing a low-cost base-load power source, ensuring grid stability, achieving
economic growth, and creating jobs.
Rising expectations for nuclear energy and the importance of education and training
on ensuring safety:
Japan and the EU must cooperate to universalize lessons learned from the
Fukushima nuclear accident, as well as provide education and training in order toensure the safety of nuclear power generation.
Promotion of the resumption of operations at nuclear power plants in Japan where
safety checks have been completed:
The rising cost of coal-fired thermal power generation due to the shutdown ofnuclear power plants in Japan in 2013 has not only led to the destabilization ofelectricity prices and increases in greenhouse gas emissions but also caused adecrease in the competitiveness of both Japanese and European companies in theJapanese market.
Taking into account economic reasons and greenhouse gas emissions, we must
proceed with resuming the operation of power plants where safety has been
confirmed by the Nuclear Regulatory Commission, as well as promote the stablesupply of electricity in conformance with the energy mix the government aims toachieve.
Replacement of current nuclear reactors with safer ones:
The latest nuclear reactors provide a technologically high level of safety, are being
explored as a possibility for inclusion in the energy mix of the future, and should beconsidered for use in replacing aging nuclear reactors in Japan and the EU. The
construction of nuclear reactors in Japan and the EU utilizing the latest models
should be used as a reference for the export of nuclear power technology by Japanand European countries to third countries.
Recycling and disposal of nuclear fuel:In regard to spent nuclear fuel, Japan and the EU must take sweeping measuresand make comprehensive decisions to solve the issue of how spent nuclear fuelshould be managed, recycled, and discarded.
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Japan and the EU should therefore promote an R&D program for collaboration on
the development of methods for nuclear waste disposal.
Developing decommissioning technologies and methodologies:
Japan and the EU hold a large part of the worldwide inventory of the aged nuclear
reactors which will be subject to decommissioning. Establishing decommissioning
technologies and methodologies for safety and minimum environmental impact is an
obligation of Japan and EU and precondition to promote nuclear power technology tothird countries. Japan and EU should therefore promote an R&D program forcollaboration on the development of methods for nuclear power plant
decommissioning.
Finance & Support:
To achieve the highest possible safety standards, we would like to request thatJapan and the EU not only promote investment in nuclear energy but also requestthat the World Bank, European Bank for Reconstruction and Development (EBRD),
European Investment Bank (EIB), Asian Development Bank (ADB) and JBIC provide
financing to support programs dedicated to ensuring the safety of nuclear power.
Security measures:Japan and the EU should cooperate in facilitating the effective implementation ofinternational nuclear safety standards and security measures at bilateral meetingsand multilateral meetings on nuclear power.
In addition, discussions between specialists from both Japan and the EU on
information and technology related to nuclear power plant decommissioning projects,
decontamination, and waste disposal should continue to be promoted.
(Meanwhile, interest in nuclear power development is on the rise in Asia and the
Middle East. Viewing nuclear power as a great opportunity for the future ofinternational business, there are also countries emerging with plans to attempt tomaximize the impact on share expansion first. Since there are fragile states andareas where terrorism runs rampant in conflict zones within the region for whichconstruction is planned, it will be crucial for the international community to proceedwith caution and carefully consider how to reduce risks through nuclear nonproliferation and other measures.)WP-4/#05*/EJ to EJ Renewable Energy
Renewable energy is expected to play a major role in countermeasures against
global warming, and there have been recent signs of improvement in the cost aspect,which had been considered an issue against the use of renewable energy. At thesame time, thorough discussions regarding the economic, environmental, efficiency,
safety and stability aspects must also be continued.
Advantages of renewable energy:
Although the role of renewable energy in the reduction of CO2 emissions andachievement of energy security cannot be denied, integration into the grid andstability of supply remain major issues to address. Despite its potential tocomplement traditional energy, it will require a smart and integrated power
distribution network.
Currently there are various options for renewable energy, including wind, solar,hydro, geothermal, tidal, and biomass. However, other than hydroelectric power,
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which can provide a certain level of base power, these power sources are affected byregional appropriations. Thus, there are remaining economic, efficiency,
environmental, safety and stability issues that need to be addressed, pointing to theneed for further discussions while their uptake is being realized.
To overcome these instability factors, it is imperative to:• Comprehensively develop the adoption of highly distributed renewable energy
sources.
• Evaluate the total costs for renewable energy in comparison with othertraditional energy sources, including all indirect costs of CO2 emission.
• Keep the existing level of subsidies or incentive schemes for renewable energy
technologies while phasing out subsidies for fossil fuels.
• Promote research on immature renewable energy technologies towards theircommercialization.
Standards in Photovoltaics
The G8 countries, in particular from the EU and the USA experience a large growthof micro photovoltaic installations with a simple connection via conventional homeelectric plugs. Japan is a trendsetter in residential photovoltaic installations.
Both the EU and Japan industries and consumers would benefit immensely fromharmonised technical requirements, standards and solutions for Plug and Play
Photovoltaic Micro-inverter Systems.
Feed-in tariff system in Japan
There have been many cases wherein permits have been secured under the
renewable energy feed-in tariff system (FIT) in Japan but the project did not actually
become operational for some application programs, leading to concerns regarding
the high burden on citizens and the prevention of entry of latecomer energy
producers that offer lower costs and higher performance. In particular, in regard to
the FIT for solar power systems, which are being introduced at a rapidly increasing
rate, there is a need to formulate schemes to encourage producers to find ways tolower costs from the perspective of lowering the burden on citizens. And also, hydro,
geothermal, and wind power, which are cheaper to generate but have longer leadtimes for commercialization, and biomass power, which contributes to “local
production for local consumption” initiatives should be more encouraged to be
adopted.
Furthermore, governments should evaluate examples of good practice of feed-in
tariff systems in Japan and EU states to stimulate green energy.
WP-4/#06*/EJ to EJ Smart Grid and convergence of Electric distribution
networks with ICT
The growth of Renewable Energy Systems on the grids in the future will to a
substantial degree occur in dispersed energy production. This will in turn favour local
balancing of energy flows on the grid as opposed to centralized transmission system
operators (TSOs) controlled balancing.
The trends to achieve this are through automatic trading of energy flexibility by
prosumers, dynamic pricing of energy based on local conditions, and maximisation ofadaptability potential by harnessing virtual energy reservoirs in processes.
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Local sustainability and uninterrupted energy supply to remote areas in case ofnatural disasters drives grid planning towards possibilities for island operation ofelectric micro grids.
The growing role of prosumers, smart grids, micro grids, energy storage and emobility requires a different distribution of roles and responsibilities in the value chainof electricity production, transmission, distribution and retail.
All these trends will have to ultimately result in a multitude of load balanced smart
micro grids, which are in turn connected to the main grid, supported by state-of-theart ICT such as internet of things, big data, etc.
Energy storage batteries:
Along with the spread and expansion of renewable energy, grid stability, peak shiftof power consumption, stable power supply need to be dealt with.
Since it is expected that the demand for storage batteries will be greatly expanded in
the future, harmonization of safety standards for storage batteries, standardization
and unification of test protocols, and/or introduction of mutual certification systemshould be promoted between Japan and EU.
Storage batteries contribute to the stabilization of the energy supply-and-demand
structure through the storage of convenient power and the ability to use it anytime,
anywhere. As a technology for long-term and large-scale storage of power, thehydrogen energy storage system should be more widely utilized for the efficientutilization of power.
Due to the development of the smart grid, storage battery applications are
expected to expand further to include vehicles, residences, buildings, andcommercial establishments. Japan and the EU must continue to work together
toward lowering costs and increasing efficiency through technological development
and standardization.
On the other hand, the uptake of renewable energy has led to instability of thepower grid due to the increase in distributed power sources. Systems for maintaining
stability, however, are prohibitively expensive. Recently, the use of cloud and ICT
has made it possible to intensively gather data and carry out control at lower costs.
Also, in regard to storage batteries, technologies to prevent imbalances that prevent
further charging due to having one battery depleted and another fully charged arebeing developed. It is imperative to proactively make use of the micro-grid and ICTthat enable handling efficient power sources, such as solar power generation.
Measures to be taken are:1) Strengthening the positive role of highly distributed residential and small
commercial photovoltaic (PV) installations for self-consumption to reduce
costly investments in power distribution network and new big power
generators. This will also reduce the need in harmful environmental
interventions.
2) Promote smart functionality of PV inverters through regulatory requirements
3) Improvement of power quality and stability through smart grids and micro gridswith battery storages.
4) Unify EU/JAPAN technical standards for highly distributed residential andsmall commercial PV installations and make them comparable to the highWorking Party 4: Energy, Environment, Sustainable Growth
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standards set by the newest USA rule 21/2017 regarding power quality andfire safety (such as rapid-shutdown regulation).
5) Prepare concrete action plan for financial stimulation and promotion of highdistributed on-site smart grid green power generation in connection with emobility penetration.

WP-4/#07/EJ to EJ Effective use of biomass resources
In order to make the shift from fossil to biomass resources as raw materials for awide range of uses and therefore achieve significant reduction in greenhouse gas
emissions, technologies and processes to convert biomass into fuel, such as
cellulosic ethanol, bio-gasoline and biogas, or useful chemicals must be developed
and become widely adopted. It is a positive example of a circular economy.
Fast-tracking the practical utilization of technologies that convert waste products,
wood-based biomass, and other non-edible plant resources into fuel or usefulchemicals requires strengthening of government support for collaborative R&D andtechnical trials between private-sector companies and academic institutions in Japanand the EU. Further, promoting the uptake of products manufactured using the above
technologies requires the implementation of a sustainable, effective, and transparent
framework for providing subsidies and tax incentives for biomass-derived fuels andchemicals.
International standardization of evaluation methods, classification schemes, andlabelling procedures are also necessary to enable a stable and profitable uptake ofbiomass-derived products at the global level. In labelling for example, although there
are internationally defined environmental labels (Type I, II, and III), compliancestandards vary among different countries.
Standardization of the certification criteria for labels will make it possible to have
universal labels that can be used worldwide. This will lead to the establishment ofmarket reliability of biomass-derived products and pave the way for their stable andprofitable uptake. Also, linking environmental labels with requirements/conditions fortax incentives and public procurement can serve as an impetus for the further spreadof the use of biomass-derived products. To enable Japan and the EU to agree on andlead the way in establishing international standards for evaluation and labellingsystems, both governments must pursue the harmonization and mutual recognition of
their respective regulations.
WP-4/#08*/EJ to EJ Energy conservation & energy efficiency
Energy conservation is an initiative aimed at fulfilling the need for economic
efficiency, environmental compatibility, and energy security, and industries in Japanand the EU should make every possible effort to develop and promote the use ofenergy conservation technologies.
At the same time, it is also important to ensure that excessive investment burden is
not placed on companies nor that production suppression is imposed on them for thesake of achieving excessive energy conservation effects.
The promotion of energy conservation will require the strengthening of researchand development and improvement of public awareness of energy conservation.
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Strengthening of energy conservation in each field:
One area in which energy conservation effects are foreseen in the residential andbusiness fields is the use of insulation materials and high-performance windows asenergy conservation measures in houses and buildings.
Energy conservation technology for electric appliances and equipment, such as
refrigerators, air conditioners, servers, and LED lighting, is also evolving. In thetransportation field, advancements are being made in the energy efficiency andreduced environment footprint of automobiles through the development of EV, PHEV,
clean diesel, and hydrogen fuel cell vehicles (FCV). Japan and the EU shouldcollaborate on standards to take the lead in promoting market introduction of thesetechnologies, and alignment and simplification of related standards and regulations.
One commonality among all fields is that the introduction of energy management isalso an effective means to increase energy efficiency.
To increase the efficiency of energy, Japan and the EU must revise and align laws
and regulations, develop advanced technologies that boost energy efficiency throughbest practices, and implement stimulus measures such as investment inmethodologies. At the same time, these actions should be complemented byaggressive measures that will have an impact on technologies for soundproofing ofbuildings and stabilization of room temperature.
Prompt implementation of regulations for building standards and insulation ofhouses will make it possible for the resulting highly energy efficient buildings andhomes to contribute to the lowering of energy consumption and expenditures, thereduction of CO2 emissions, and the maintenance of good health at both a household
and national level.
Harmonization of standards and mutual accreditation of testing protocols to verify
the energy saving effect of components and materials should be implemented.
WP-4/#09/EJ to EJ Energy research and international cooperation
The reduction of greenhouse gas emissions and energy technology development
focused on the mid and long-term
Greenhouse gas emissions are impacting climate change and the environment,
thereby making this an issue facing all of mankind that requires international insight.
As such, the development of technologies capable of reducing greenhouse gas
emissions with the use of electricity produced using fossil fuels, non-fossil-fuelrenewable energy, and nuclear power deemed safe is becoming necessary on a
global scale, and it is imperative that the development framework be reinforced
through cooperation among industry, government, and academia.
Human resource development
To promote sustainable efforts aimed at achieving the goal set by all ratifying
nations of the Paris Agreement to reduce CO2, both Japan and the EU—as leaders in
the fields of energy and environmental technology—must forge ahead with groundbreaking innovation.
In addition to contributing to the international society, sustainable innovation
activities like these are also conducive to economic growth. This is why a system forcontinuously training technical experts in energy-related fields through personnel
exchanges should be considered.
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WP-4/#10/EJ to EJ Efforts toward the prevention of global warming following
the Paris Agreement reached at COP21
The prevention of global warming is an issue facing all of mankind.
Since much of the world’s greenhouse gas emissions have already shifted fromdeveloped countries to newly developing countries, it will be impossible to prevent
global warming if only developed countries set targets for reduction.
We welcome the Paris Agreement as a framework through which all major emitting
countries, including the U.S. and China, are able to participate, and view it as anextremely important and historical first step that enabled all countries participating in
COP21 to set their own targets.
Going forward, it will be necessary to not only ensure that all major emitting
countries ratify this agreement and demonstrate their commitment to the full
implementation of the Paris agreement, as was established during COP 22 inMarrakech, but also establish a system with which the fulfilment of the promises
made by each country can be reviewed internationally from the perspective ofenhancing fairness and effectiveness. As was said in the introduction, we regret the
US announcement to want to withdraw from the Paris Agreement. It is important that
the EU, Japan and all other signatories (especially other major economies) staycommitted and discuss the implications of the US decision with their business
communities as soon as possible.
Japan and the EU will need to undertake the tasks of developing low-carbon
technologies and transferring technology to developing countries with significant
potential for making reductions.
Visualization of emission reduction effects
A life cycle assessment (LCA) is a technology that can be used to evaluate theenvironmental impact made by a product at every stage of the product life cycle fromthe cradle to the grave. For evaluating low-carbon technologies and products by LCA,
the avoided emission of CO2 approach should be promoted through public-private
collaboration.
Contributions to global warming measures in Japan and the EU
The creation of a framework through which both developed and developing
countries can work together to achieve low-carbon growth will play a critical role inaddressing climate change issues. The outstanding technologies, products, andknow-how possessed by Japan and the EU will not only lead to the strengthening ofinnovation and sustainable development in both countries but also contribute to
global warming countermeasures on a global scale.
In particular, contributions utilizing ICT should also be considered. These include
continuous observation of the global environment using artificial satellites, radars,
sensors, and other equipment to monitor climate change, the use of supercomputersand other means for climate change prediction and research on the mechanisms
behind climate change, and the construction of a global earth observation system.
It will also be imperative to conduct research and development of technologies forcalculation and verification of greenhouse gas emissions and carbon dioxide captureand storage (CCS) in order to alleviate climate change.
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Moreover, a bilateral offset mechanism will be an effective means for achieving
greenhouse gas reductions in newly emerging and developing countries where a
sharp rise in energy demand is becoming apparent. Japan and the EU must not only
work together with industry to design such a system but also clarify support
measures.
In conjunction with measures like these to alleviate climate change, thegovernments of Japan and EU countries must open their doors to industry, provide
easy-to-understand explanations of adaptive planning, technology needs, andfinancial assistance, and create an environment in which industry can easily
participate. Governments in Japan and the EU must also set high standard
regulations, as well as a share a common interest in making efforts toward market
liberalization that would include third countries in addition to Japan and the EU.
Establishment of IPR protection
To promote commercial technology transfer, Japan and the EU must takemeasures to ensure the creation of appropriate regulatory frameworks in countries towhich technology transfers are to be made and the protection of intellectual property
rights. It will be necessary to create appropriate regulatory frameworks to establish
IPR protection in newly emerging and developing countries, and governments inJapan and the EU should introduce monitoring systems for the protection of IPR,
provide patenting assistance, and establish technology partnerships.
WP-4/#11*/EJ to EJ Promotion of resource efficiency and the circular economy
Although resource prices are declining in the short term, resource constraints arelikely to inhibit economic growth over the medium to long term. This is why it isimperative to improve the efficiency of resource use. In this light, Japan and the EU
welcome the progress being made through international-level discussions on
resource efficiency and the circular economy, including the establishment of the G7
Alliance on Resource Efficiency at the G7 Summit at Schloss Elmau held in 2015.
The announcement of the EU’s adoption of a Circular Economy Package and thepromotion of efforts to improve resource efficiency are also welcomed.
Discussions on resource efficiency and the circular economy go beyond recycling
and other aspects of the venous industry to cover a wide range of concepts
impacting manufacturers, service providers, and other companies to be recognized
as arterial industry, including the extension of product life, the sharing of services,and the goods and services through operational billing. The discussion holds thepotential to create business opportunities that will lead to additional economic growth
and the job creation in the future. The truth of the matter is that business is alreadydoing a lot in both Europe and Japan: For example, the European Circular Economy
Industry Platform (www.circulary.eu) showcases what business is already doing on
circular economy and what challenges it faces to become even more circular.
On the other hand, the pursuit of resource efficiency through exceedingly
regulatory approaches could inhibit economic growth. Therefore, it is desirable tochoose an approach that will lead to economic growth, such as promotion throughvoluntary efforts by stakeholders with associated incentives. It will also be imperative
to pursue resource efficiency from the viewpoint of international circulation system
based on the fact that movement of secondary raw materials across borders is now
the norm.
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In view of the above, Japan and the EU should not only move forward with efforts
aimed at improving resource efficiency but also work together to formulate consistent
rules. In addition, Japan and the EU are expected to take advantage of the advanced
innovation and competitive edge in international market, which they possess inregard to the institutional and technical aspects of resource efficiency and the circular
economy, deepen their cooperation and collaboration, and take the lead ininternational discussions on the future direction of the circular economy and resource
recycling, as well as on the creation of institutions and systems. In this regard, we arelooking forward to active discussions on resource efficiency and the circular economy
during coming G7 Summits.
WP-4/#12/EJ to EJ Promotion of global investments and nurturing of long-term
relationships
Amidst sharp fluctuations in the price of oil and other resources, continued
investment and strong economic collaboration in a wide range of fields will benecessary to secure stable and inexpensive resources in response to global risks.
When it comes to long-term sustainable energy policy, it is important to make thenecessary investments and ensure strong cross-border collaboration in order toachieve ambitious targets. Japan and Europe should therefore encourage direct
investment from a transparent, open, and long-term perspective living up to thecommitments all parties made in the Energy Charter Treaty.
To promote the spread of energy conservation technologies and the like, it will be
important to promote high-efficiency, low-cost renewable energies and conduct
research and development of hydrogen, energy storage, geothermal, and other newenergies. In addition, research that will contribute to the highly efficient utilization offossil fuels and both the safety and security of nuclear power should also be
considered.

Working Party 4: Energy, Environment, Sustainable Growth
EU-Japan BRT 2017 Recommendations Report
Page 14 of 14