Japan’s Green Transformation (GX)
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Japan’s Green Transformation (GX)
Investment Policies and
Implications for EU Companies
Johanna Schillinghttps://www.eu-japan.eu

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Table of Contents• Overview on GX policy• GX Policy & Potentials in SpecificTechnology Sectors• Challenges & Recommendations

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Overview on GX Strategy“Basic Policy for
the Realization of GX”:
• To contribute to
global decarbonizationthrough therealization of GX and• To strengthen Japan’s
industrial
competitivenessand economic growth.

https://www.eu-japan.eu

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Target Areas
Renewable
Energies

CCS

Next Generation
Innovative Reactors

Next Generation
Network

Hydrogen/Ammonia

Battery Industry

Source: METI, 2023

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Target Areas

Transportation

Automotive
Industry

Aircraft Industry

Zero Emission
Ships

Cement Industry

Carbon-recycled
fuelInfrastructure

House/Building
Source: METI, 2023

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Target Areas

Resource
Recycling

Bio Plastic

Local Community

Investment forDigital

Pulp & Paper
Industry

Steel Industry

Chemical Industry

Food, Agriculture,
Fishery Industry
Source: METI, 2023

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GX Financing Plan

Source: METI, 2023

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Source: GR Japan, 2023

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GX Financing Plan

Initiatives for achieving 150 trillion JPY ofprivate-public investment
1. Growth-oriented carbon pricing (including GX transition bonds)
2. Integrated regulatory/assistance promotion measures
3. New financing methods
4. International development strategy, including formation of Asia
Zero Emissions Community
5. Development of GX League (forum for cooperation between
companies, government and academia)
Source: METI, 2023

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GX League•

Network of more than 560 Japanese companies that arecommitted to: Voluntary emissions reduction with clear targets for 2030
and a roadmap for carbon neutrality by 2050
 Leading decarbonisation of the supply chain
 Supporting creation of green markets through green
procurement

https://gx-league.go.jp/en/

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Table of Contents• Overview on GX policy• GX Policy & Potentials in SpecificTechnology Sectors• Challenges & Recommendations

https://www.eu-japan.eu

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1. Renewable Energies(Photovoltaic, Wind Power)

https://www.eu-japan.eu

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th6 Basic Energy Plan

Source: ANRE, 2021

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Renewable Energies: Targets (2030)

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Renewable Energies: Challenges• Limited space for onshore wind power andmega solar plants• Water depths and fishing rights• Grid limitations• Restrictions on the use of
hot springs for energy
supplyhttps://www.eu-japan.eu

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Renewable Energies: Potentials• Technologies and components for wind turbines and floatingturbines• Innovative, next-generation battery cells, fuel cells and PV
technology• Energy management systems for integrating intermittent renewable
power sources

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2. Energy Storage

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Energy Storage: Targets
By 2030:• Cumulative installation of approximately 24 GWh for the total of
home-use and business/industrial-use storage batteries

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Energy Storage: Potentials• Innovative, next-generation batteries, including
 Lithium-ion
 Nickel-based batteries Redox-Flow batteries
 NAS batteries

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3. Smart Grids/VPP

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Smart Grids/VPP: Challenges• Lacking grid connections• Different frequencies• Increasing fluctating energy
supplySource: Federation of Electric Power Companies Japan

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Smart Grids/VPP: Targets• „Next generation grid“• Regional Energy Management Systems (REMS)
and Virtual Power Plants (VPP)• „Capacity market“

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Smart Grids/VPP: Potentials• Smart grid related technologies and systems such as: Batteries
 Smart metering Energy management systems
 Real-time monitoring systems (tracking systems)
 Demand response systems
 Virtual Power Plant (VPP)

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4. Hydrogenhttps://www.eu-japan.eu

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Hydrogen: Targets
By 2030:• Hydrogen market of 3 million tons per year• 1,000 hydrogen stations• 800,000 fuel cell vehicles in use•

1,200 fuel cell buses•

10,000 fuel cell forklifts•

5,3 million residential fuel cell units

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Hydrogen: Potentials• Technologies for CAPEX and OPEX reduction for electrolysers &water electrolysis• Energy management systems that optimize the hydrogenproduction with RE• Hydrogen transportation & storage technologies• Hydrogen powered turbines• Ammonia production units• FC trucks• Stationary fuel cells• Technologies for „green“ steel production
https://www.eu-japan.eu

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5. CCS/CCU

https://www.eu-japan.eu

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CCS/CCU: Targets• Cut CO2 emissions in hard-to-abate sectors
such as the steel industry by 30% by 2030
• Transform existing thermal powergeneration (by coal) into zero-emission
power generation• Build a CCUS value chain and capture120-240 million tonnes of CO2 by 2050

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CCU/CCS: Potentials• CCS/CCU related technologies such as: Direct air capture Technologies for transport, storage and reuse Carbon-neutral fuels
 CO2 electrolysis

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6. Transport & Mobility

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Transport & Mobility: Targets• Electrification of transport• Passenger vehicles: EV share of 100% of new vehicle sales
by 2035• Commercial vehicles: EV share of 20-30% of new lightvehicles sales by 2030 and EV and „decarbonized fuel“vehicles accounting for 100% by 2040
• Heavy vehicles: advanced introduction of 5,000 vehicles in
the 2020s and full electrification by 2030
• 150,000 EV chargers (incl. 30,000 fast chargers) by 2030
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Transport & Mobility: Targets• Hydrogen-fuelled mobility• 1,000 hydrogen stations in optimal locations by 2030
• 800,000 fuel cell vehicles in use by 2030 and 2-3 million by 2040
• 1,200 fuel cell buses in use by 2030

© 2024 SAUDI RESEARCH & PUBLISHING COMPANY

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Transport & Mobility: Targets• Sustainable aviation & ship fuel• Cut CO2 emissions in shipping industry by 1.8 million tonnes
by 2030 through introduction of ammonia/hydrogenfuelled ships• Develop carbon neutral fuels for shipping and aviaction
sectors by 2050
• Mobility as a Service (MaaS)

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Mobility: Potentials• Light-weight material for EV, aircrafts, and ships• Innovative, next-generation EV batteries• Innovation for bio-based fuels and SAF (sustainable aviation fuels)• Electric vehicle chargers• MaaS (Mobility as a Service) solutions

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7. Housing & Construction

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Housing & Construction: Targets• All new-built houses will be „zero emission houses“ (ZEH) by 2030
• „Smart Houses“• Promotion of energy-saving renovation & improvement of energysaving performance• supply of carbon neutral cement (2 million tonnes by 2030)• Establishing technology for constructing highrise wooden buildings through thedevelopment of wooden building materials
and standardization of construction methods
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Housing & Construction:Potentials• Insulation material and windows• Innovative sustainable building material with low carbon footprint
regarding the whole life cycle• Innovations for carbon-neutral cement or alternatives to cement• Innovative wooden building materials (also for high-rise buildings)• Efficient and sustainable home air conditioning systems• Innovative energy-efficient lighting systems
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8. Circular Economy

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Circular Economy: Targets• "Strategy of Resource-Autonomous Circular Economy for Growth“:• Reduce• Renewable• Reuse• Recycle• Recovery• CE related technologies market of 80 trillion yen in 2030
• In 2035: Domestic market for recycled plastics and materialsof 504 billion yen
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Circular Economy: Potentials• Highly functional biobased materials• Advanced technologies and mechanisms for waste sorting• High-performance materials and recycling technologies• Development of new materials to replace plastics• Technologies for recovery of CO2 from waste treatment facilities• Technology for waste heat recovery• Improvement and cost reduction of heat storage and transportation
technologies

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9. Farming & FoodProduction

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Farming & Food Production:
Targets by 2050
• Complete shift to horticultural facilities that do not use fossil fuels,e.g., through the development of heat pumps• Establishing technology for next-generation organic agriculture, andincreasing in organic farming to 25% of farmland• Establishing technologies for the electrification/digitization ofagricultural and forestry machinery

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Farming & Food Production:
Targets (by 2050)• Establishing a cyclical use of “harvesting, using, and planting” forplanted forests, and promoting reforestation using F1 plus trees andincreased use of wood
• Establishing a method to measure the amount of CO2 absorbed andstored by blue carbon, and aiming to reflect it in the UN Framework
Convention on Climate Change and others

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Agriculture & Food: Potentials• ICT and smart farming technologies• Smart farming services• Technologies and solutions to realize the shift from fossil
fuels in horticultural facilities• Technologies for next-generation
organic agriculture

Kubota, 2024

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Table of Contents• Overview on GX policy• GX Policy & Potentials in SpecificTechnology Sectors• Challenges & Recommendations

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Challenges• Public tendering• Market can be complex for foreigners• Competition from Japanese companies• Regulations regarding safety of use and technical standards• Time & long decision-making processes• Language barrier

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Recommendations
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Ensure sufficient time and human resources
Utilize supporting organizations
High quality and an after-sales-service
High quality products and servicesHighlight EU origin
Select reliable partners
Build strong customer relationships
Build local networks
Use Interpreters
Attend important trade fairs
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ContactConclusions• Japan’s Green Transformation will spur the market for various
technologies such as energy, circular economy, sustainable housing
and smart farming.
• Public tendering is a big challenge.
• Thorough market analysis and cooperating with local partners isrecommended.

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Question andAnswer session

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Expert contact
Johanna Schilling
ECOS GmbH
Osnabrueck/Germanyjschilling@ecos.eu

The EU-Japan Centre for Industrial Cooperation is co-funded by the European Union. Views and opinions expressed are however
those of the author(s) only and do not necessarily reflect those of the European Union or the European Innovation Council andSMEs Executive Agency (EISMEA). Neither the European Union nor the granting authority can be held responsible for them.

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