Recommendationsofthe EU-Japan Business Round Table
to Leaders of Japan and the European Union
7 November 2023
Working Party 4
Environment and Sustainable Development

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

Mr. Shigehiro Tanaka
Senior Executive Vice President
NEC Corporation

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Introduction
Achieving climate neutrality by the middle of this century is a universal challenge facing
all of humankind and we, the BRT, hold strong expectations for both Authorities tocontinue prioritising the fulfilment of their roles as world leaders in the face of theselatest threats by promoting measures to further accelerate the transition to clean andsustainable energy as well as the diversification of energy sources.
The BRT will support measures by and cooperate with both Authorities to create aresource-efficient and cyclical economy, consider and maintain biodiversity and othernatural capital, and ensure food security.
The BRT supports initiatives led by the EU-Japan Green Alliance that promote
cooperation on energy transitions, environmental protection, sustainable finance, andthe facilitation of energy transitions in third countries, and we will strive to realise theabove by cooperating with specific measures taken by the Alliance.
We are determined to cooperate with the promotion of efforts to “nurture a prosperous
city where individuals and society are in harmony” through the realisation of resilientand comfortable lifestyles in addition to “Green growth strategies for coexisting withthe earth and protecting the future.”Working Party 4: Environment and Sustainable Development
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Recommendations from both
European and Japanese industries
WP-4 / #01* / EJ to EJ:

Measures and policies of both authorities against
climate change

The BRT calls on EU and Japanese Authorities to:•

Support all technologically and economically viable options and take a flexible
approach with a reasonable and realistic transition period towards achieving an
ambitious target for a decarbonised society by facilitating and promoting high-level
dialogues between both authorities.

•

Accelerate promoting technologies and solutions on decarbonisation accumulated
in EU and Japanese industries to other countries and markets.

•

Take measures based on the three integrated perspectives of climate change
countermeasures, biodiversity conservation, and the transition to a circular
economy. Decarbonisation-biased efforts should not result in the loss of
biodiversity, and linear economic models must not impede its sustainability.

•

Demonstrate strong leadership towards the swift creation of a platform that can beused to share CO2 emission data and introduce common rules to every company
involved in the supply chain for the production of raw materials, parts
manufacturing, product manufacturing, sales, and the transportation that connects
them.

•

Support the creation of a level playing field for manufacturers to be able to publish
their energy results using a common calculation method. This would raiseawareness of their sites' energy performance and encourage them to take action
to improve it and therefore impact positively their CO2 emissions. This level playing
field is more important now with the Carbon Border Adjustment Mechanism. We
call on the EU and Japanese Authorities to ensure close communication on thehandling of carbon pricing based on the acknowledgement that equitable treatmentof carbon pricing in third countries is one of the most important points from theperspective of international harmonisation and WTO compliance.

•

Formulate cross-country policies with all sovereign states that are major
contributors to climate change to ensure that domestic industries in the EU andJapan are not penalised more harshly than industries in third countries.

•

Introduce WTO-compatible subsidies or incentive schemes including theimposition of fees on end-users that reflect the indirect benefits to society brought
about by investment in decarbonisation by industry.

•Take effective measures to introduce sustainable energy contributing todecarbonisation of the public sector, including government procurement rules.

•

Facilitate further hand-in-hand cooperation between the EU and Japan in the areaof sustainable finance as a catalyst towards a decarbonised society with the aimof coordinating and promoting a consensus in international fora and to maketaxonomy operational and usable for business while maintaining economic
feasibility.
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•Ensure that measures they take will not lead to the stagnation of corporate
investments in R&D and capital, protectionist trade, and/or the stifling of innovation.

•

Make the most of existing low-carbon resources, while preparing for the future
through new, innovative electricity generation resources with a low carbon footprint.

The BRT believes that:•The EU and Japan must remain forerunners in this area by representing the global
conscience of all humanity and actively promoting this view to all other industrial
countries worldwide to ensure they share the same measures and adopt the same
rules and regulations to achieve a carbon-neutral economy and implement
appropriate measures to accomplish this goal.

•

To reduce CO2 emissions across the entire supply chain, it is necessary toaccurately comprehend not only the CO2 emissions of each company but also theCO2 emissions of the supply chain as a whole (e.g., procured goods, services,transportation, delivery). As such, there is an urgent need to develop common rules
and mechanisms. We also believe that in the future it will be necessary to consider
calculating the reduction amount as the contributed amount in cases in which
companies produce, sell and provide products and services by utilising thetargeted supply chain.

•

The only way to achieve ambitious climate targets for 2030 and to promote a
circular economy is close joint collaboration aimed at reducing the complexity ofmarket entry (especially for strategic sectors such as waste and energy), promotinginternational standardisation as well as simplifying and accelerating theadministrative processes to obtain permission for new investments andtechnologies.

WP-4 / #02* / EJ to EJ

Promotion of resource efficiency and the circular
economyThe BRT calls on EU and Japanese Authorities to:•

Pursue resource efficiency from the viewpoint of an international circulation system
based on the fact that movement of secondary raw materials across borders is
now the norm. On the other hand, as global supply chain risks become apparent,
we also call on both Authorities to develop a policy promoting the optimisation ofboth international and regional circulation since we believe it is essential to also
promote regional circulation, as well as international circulation, from theperspective of maintaining and securing economic security.

•

Avoid the pursuit of resource efficiency through exceedingly regulatory
approaches, that inhibit innovation and economic growth. Instead promotebusiness support and consumer protection by means of associated incentives.

•

Promote alignment and simplification of related standards and regulations of
products made of renewable resources contributing to the circular economy, withincentives for R&D and commercialisation.

•

Take measures to visualise the entire utilisation cycle from the manufacturing ofproducts to their shared use, reuse, recycling, and disposal as well as to realise

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and accelerate supply and demand control in resource circulation through means
such as matching products and assets with users by utilising the traceability of raw
materials, parts and products, and AI.
•

Recognise that Japan and the EU should not only move forward with efforts aimed
at improving resource efficiency but also work together to formulate consistentnational and international rules and treaties to this effect.

•

Facilitate cooperation between EU and Japan to advance Circular Economy
Resource Efficiency Principles (CEREP), which businesses can play a significant
role for along the value chains to reduce primary resource use and contribute toachieving climate and other environmental goals, as well as enhancing sustainableeconomic growth and economic security.

The BRT believes that:•

Resource constraints are likely to inhibit economic growth over the medium to longterm. This is why it is imperative to improve the efficiency of resource use.

•

The circular economy holds the potential to create business opportunities that willlead to additional economic growth and job creation in the future.

•

Discussions on resource efficiency and the circular economy must go beyond
recycling and other aspects of pure reuse to cover a wider range of concepts ofproduct longevity, frugality and efficient use, thus impacting manufacturers, service
providers, and other companies, to consider the extension of product life, thesharing of services, and the provision of goods and services through operationalbilling.

•

In order to advance the promotion of the green transition, the smooth facilitation of
product-related information sharing across supply chains is an urgent common
challenge for both Japan and Europe.

•

Collaborations by companies, administrations, and industries that transcend
existing frameworks are integral to realising the circular economy. Until now, there
have been individual supply chains for each company or industry, and data on
production, logistics, and sales have remained separate. To make the circular
economy a reality, we believe it is important to link and control data such as supply
and demand and the usage of a variety of raw materials and products beyond
existing frameworks.

•

Product design and the procurement of raw materials based on the premise ofreuse of products and resources are important. To this end, it is imperative to havea mechanism that can be used to trace data on the original components of products
and the place of origin of raw materials.

•

In Europe, discussions regarding the Battery Passport and Digital ProductPassport have been progressing, while in Japan, discussions on data sharing
across supply chains have also been advancing.

•

From the perspective of the close ties in business and supply chains between
Japan and Europe, and considering their collaboration as like-minded nations, westrongly urge both the Japanese and European Authorities to ensure close
coordination and collaboration regarding the interoperability of data sharing.
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WP-4 / #03 / EJ to EJ

Natural Capital and Biodiversity

The BRT calls on the EU and Japanese Authorities to:•Continue to lead international discussions towards COP16 of the Convention on
Biological Diversity and to actively promote the development of 30by30, especiallyfor other effective area-based conservation measures (OECM), which will be thekey to its achievement. In addition, we request both Authorities to further promote
the accumulation of data and the development of infrastructure related tobiodiversity, and to actively develop environmental measures from the viewpointof total optimisation that can be implemented over the long term as well as nature
positive measures and models in third countries under circumstances in which theglobal economy is further blocked.

•

Continuously promote the study and development of the natural capital value offorests from the perspective of biodiversity. We also call on both Authorities toguide and promote the creation of highly reliable common rules based oninternational organisations and government-led standards for the mechanism ofprivate initiative (i.e., voluntary credit) since the carbon offset credit system for
CO2 forest absorption will need to be further developed and utilised from theviewpoint of climate change measures as mentioned in the previous section.

•

Develop policies that encourage companies and business to support R&D andcapital investment aimed at providing solutions and services contributing to thesustainability of agriculture, reducing environmental load, implementing measuresagainst climate change, and responding to the aging of the working populationand the resulting loss of know-how by using the latest AI and digital technologies
that replicate the techniques of skilled farmers. More specifically, tax incentives,
the provision of appropriate subsidies, and support for on-site implementation.

The BRT believes that:•

It is valuable that the Japanese and EU Authorities are leading the international
debate towards COP16 of the Convention on Biological Diversity, and this is muchappreciated. We will also support and continue to actively cooperate withmeasures in the 30by30 Roadmap to achieve targets in the Post-2020 Biodiversity
Framework.

•

Forests are naturally one of the core environmental assets that not only provide
global environment and ecosystem services but also bring immeasurable benefits
to humankind (e.g., food supply, water circulation, climate stability). We also
understand that management of forests owned by individuals and companies is an
important factor for OECM. In addition, it is imperative to continue working to
improve and utilise the carbon offset credit system for CO2 forest absorption.

•

Demand for agricultural products is expected to further increase worldwide due topopulation and economic growth in a harsh global environment marked by climatechange, global warming, soil pollution, and soaring water and fertiliser prices, but
we also understand it is necessary for agricultural production to tackle various
issues such as developing measures against decreases in the number of
producers, reducing environmental burden, and ensuring the safety of food. In
particular, we should combine agronomics (i.e., agricultural science) withadvanced digital technologies such as AI to promote accurate, efficient,

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environmentally friendly, and profitable farming as well as expand sustainableagriculture in every country.

WP-4 / #04* / EJ to EJ

Realisation of a resilient and comfortable life

The BRT calls on EU and Japanese Authorities to:•Address with utmost priority the development and implementation of secure, safe,
resilient, and high-quality city infrastructures that consider life-cycle cost, which isessential for realising sustainable and inclusive societies as well as the services
associated with such infrastructures. This is necessary because city design andmanagement have a serious and tremendous impact on creating attractive andideal residential circumstances compatible with both societies and people.

•

Convert urban planning to resilient and comfortable cities with a wide range ofbasic, high-quality infrastructure and associated services to be viable andsustainable.

•

Take the lead in promoting market introduction of energy conservation and energy
efficiency technologies and their supporting infrastructures as well as encouraging
the alignment and simplification of related standards and regulations. We also ask
both Authorities to promote the development of advanced technologies that boost
energy efficiency through best practices as well as to implement stimulus
measures such as investment in methodologies and to promote disruptive
innovation in cities.

The BRT believes that:•

City infrastructure development is vital for economic growth because it can create
jobs, alleviate poverty, and improve quality of life for urban residents.

•

As climate-related natural disasters thought to be caused by global warming suchas hurricanes, droughts, and wildfires become more intense and frequent, cities
will find themselves damaged by large-scale disasters, thereby leading to massive
amounts of CO2 being emitted as a result of reconstruction projects required torebuild infrastructure. Therefore, from the perspective of preventing global
warming, we believe that it is also extremely important to accelerate theintroduction of disaster prevention and mitigation solutions that make infrastructure
more resilient to disasters.
Issues such as congestion and the depopulation of cities can result in lowering thelevel of services and sustainability of cities. On the other hand, it is possible thatthe distribution of functions and people to local cities/rural areas from a state ofextreme concentration in urban cities will accelerate along with advances in digitaltechnologies under the new normal in the post COVID-19 era. We believe that thiswill lead to a certain level of progress in the mitigation of urban issues caused byovercrowding and in the reassessment of social values and changes in people’s
behaviour leading to improvements in quality of life, including work-style reforms,
in addition to reducing the risk of infectious diseases. The Digital Garden City
Nation Initiative currently being promoted by the Japanese Government aims toenable all citizens, regardless of place of residence, age, or gender, to live a
fulfilling life that combines comfort and peace of mind according to their lifestyles
and needs and to create a society in which citizens and businesses can enjoy the•Working Party 4: Environment and Sustainable Development
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benefits of digitalisation through the creation of new services that contribute to theimprovement of work and life in rural areas, the improvement of sustainability, andthe realisation of well-being, thereby creating a society where everyone can live
conveniently and comfortably anywhere. BRT supports this initiative.

WP-4 / #05 / EJ to EJ

Promoting the optimisation of city management

The BRT calls on EU and Japanese Authorities to:•

Take specific steps and measures from the point of view of accelerating the
optimisation of city management through trusted City-as-a-Service and data-driven
solutions that provide the most suitable services to residents, healthy buildings,
and healthy precincts.

•

Promote the optimisation of city management at various levels of scale (e.g.,building, neighbourhood, infrastructure).

•

Refrain from introducing regulations that strongly and negatively impact or
suppress the development and utilisation of AI technologies in city management,
while cooperating with the private sector in establishing and implementing policies
and guidelines aimed at preventing and addressing human rights issues.

•

Secure a sufficient budget for each government in Europe and each local
government in Japan to actively introduce, use, and share data utilisation
infrastructure.

The BRT believes that:•

City management will become primarily focused on high-level operations ofhabitation and mobility through City-as-a-Service, which provides services suited
to the diverse values of residents by combining various types of big data tovisualise the city’s circumstances and predicting possible changes.

•

Utilising AI and digital twins will enable low-cost and speedy execution of largescale analysis and simulation that are difficult to conduct in real cities and will be
particularly effective in disaster prevention planning and the measurement of policy
effectiveness.

•

Notwithstanding the large benefits of AI solutions, the utilisation of AI must be
governed by placing the highest priority on compliance with relevant laws andregulations in each country/area and on respect for human rights.

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Recommendation from
European Industries
WP-4 / #06 / E to EJ

Increase the rollout of EVs and the necessary
infrastructure

The percentage of EVs in new car sales in Japan in 2020 is about 0.6%, which is quite
low compared to other countries. The situation in the EU regarding the EV transition is
only slightly more advanced than in Japan, with ACEA claiming that around 24.5% ofcars sold in the EU are alternatively fuelled. This figure does not differentiate between
hybrids, EVs and hydrogen-fuelled cars.
The BRT calls on the EU and Japanese Authorities to:•

Impose stricter CO2 standards for cars and vans.

•

Introduce Alternative Fuels Infrastructure Regulation, aiming to increase thecoverage for EV charging and hydrogen refuelling along the main transport networklines (like the EU’s Trans-European Network for Transport for Transport: TEN-T) to
maintain long-distance viability of alternatively fuelled vehicles.

•

Introduce charging infrastructure requirements for existing, renovated and newly
built buildings with different targets per category.

The BRT believes that:•

In its Green Growth Strategy accompanying the 2050 carbon neutrality, theMinistry of Economy, Trade and Industry (METI) has decided on a framework suchas “Comprehensive measures will be taken to achieve 100% of new passenger
vehicle sales being for vehicles that are electrically driven (Electric Vehicles, Fuel
Cell Vehicles, Plug-in Hybrid Vehicles, Hybrid Vehicles) by 2035. With regard tocommercial vehicles, for light-duty vehicles of 8 tons or less, the government willtake comprehensive measures, including the introduction of vehicles andpromotion of infrastructure development, aiming for 20-30% of new vehicle sales
to be electrified vehicles by 2030, and 100% of new vehicle sales to be electrified
vehicles and vehicles suitable for the use of decarbonised fuels such as synthetic
fuels combined by 2040. As for large vehicles over 8 tons, we will aim to introduce
5,000 units of electrified vehicles in advance in the 2020s while promoting
technological verification to develop and promote the use of electrified vehicles
suitable for commercial use such as cargo and passenger businesses, and we will
also set a target for the diffusion of electrified vehicles in 2040 by 2030, taking into
account the progress in technological development and diffusion efforts to reduce
the price of hydrogen and synthetic fuels.”•

The European Commission has proposed that the EU aims for a 40% share in
renewables by 2030. In view of the invasion of Ukraine, a 45% renewables target
is now being proposed by the European Parliament and is likely to receive support.
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•Within the EU there are numerous policies aimed at increasing the rollout of EVs
and the necessary infrastructure to make them a viable alternative to regularinternal combustion engine (ICE) vehicles.

•

The proposal from the European Commission aims to phase out the sale of ICE
vehicles by 2035, with intermediate decarbonisation targets for 2025 and 2030.
The European Parliament is aiming to increase these targets but will have tonegotiate their position with the European Council, who will likely water down the
proposals.

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