In 2001, Japan noted that most of their energy came from fossil fuels, including over 50 percent from oil, over 16 percent from coal, and more than 13 percent from natural gas. Because of these numbers, Japan released the “Revised Long-Term Energy Supply and Demand Outlook” which emphasized the efficient use of energy and reduction of carbon emissions. Since then, Japan has become one of the global leaders of the international cleantech industry. The impact of cleantech in Japan can be felt on a national and international level.
1) Climate Change Investment. Japan created a fun of $10 billion to assist emerging countries looking to reduce their emissions. This investment project is due to the fact that Japan has had a lot of luck in the cleantech sector, they want to take that impact and bring it to other nations. It is a five year program that will put money aside for climate change mitigation, grants, aid, as well as technical assistance to countries that are looking to make the switch into renewable energy sources. The goal of this is to bring the world closer to what Japan called the “Cool Earth 50” initiative, which is to reduce overall global greenhouse gas emissions by half by the year 2050.
2) Hybrid Subsidizing. To make hybrid vehicles more affordable to the Japanese population, the government is looking into providing subsidies that would cut the cost of a hybrid vehicle by 25 percent. These subsidies would equal out to be about 300,000 Yen, roughly $3,000 USD, and allow more individuals to purchase these environmentally friendly vehicles which would improve air quality. It is a move by the government to support environmentally friendly transportation by making them more cost effective to the public. It is the government’s hope that this program will provide the necessary encouragement for motorists to turn in their new cars for hybrid vehicles.
3) Cleantech Exports Investment. More than $1.6 billion dollars is currently being invested into overseas cleantech projects that involve Japanese companies. It is run by Innovation Network Corporation of Japan and seeks to assist Japanese companies gain contracts overseas in the cleantech sector. The hope is that the projects will provide Japan with carbon credit earning power that they can use to achieve its goal of reducing carbon emissions by 25 percent in 2020. So far, investments have gone to a smart-city project located in India.
4) Action Planning. The Tokyo Metropolitan Government has cited that the most important issue when it comes to cleantech is to sustain the cities with affordable energy supplies and reduce carbon emissions. To overcome the energy supply limitations and emissions problem, it has become apparent the need to introduce energy saving techniques into the city. There have been numerous measures implemented to increase the impact of cleantech. This includes reduction of carbon emissions from large facilities, energy saving measures for all new buildings, energy saving techniques at home, reduction measures for vehicle carbon emissions, and a program to introduce renewable energy to energy suppliers.
5) Tokyo Green Building Program. This program began in 2002, at the start of the cleantech revolution in Japan after it was realized that energy consumed in Tokyo office buildings and houses counts for about half of overall energy consumption. This program requires that building owners create plans that would conserve energy and be environmentally-friendly.
6) Leading Innovation Cleantech Race. According to the Clean Energy Patent Growth Index, which indicated the level of innovation in the sector of clean energy, Japan is dominating the index, especially in the areas of energy storage devices and fuel cells, which have received more than 157 patent approvals in just one quarter. Toyota and Nissan, two Japanese automobile manufacturers are leading the patent race in this sector with the first two spots on the index, followed by Japan’s Honda company.
7) Carbon Reduction Goals. Japan is one of the few countries close to reaching their carbon emissions goal, which is a reduction of 25 percent from 1990 levels by the year 2020 through the elevation in the use of renewable energy sources. The government has funded more than $55 billion throughout a five year period toward this plan, and looks to boost solar photovoltaic systems and will make Japan a leader in solar energy and electric cars development and implementation.
8 )Priority of Environment Technologies. Japan is one of the leading countries in the development of environmental technologies because of the intense focus and priority it has received. The reasoning for the high prioritization is mainly Japan’s obligations to upholding the Kyoto Protocol and establishing environmental targets for all sectors, including industry, transportation, commerce, and households. They key sectors in the technologies forefront are clean energy, solar power generation, fuel cells, waste treatment, recycling, and air quality.
9) Japan Renewable Energy Policy Platform. In 2008, the Japan Renewable Energy Policy Platform was created to provide different proposals for policies surrounding renewable energy. To fulfill the vision set to have 60 percent or more of Japan’s total electrical needs satisfied by renewable energy sources and reduce carbon emissions by 75 percent by the year 2050, the platform suggested that local and national governments would need to set clear targets toward renewable energy use for the medium and long term periods, that the public needs to be provided with an understanding and agreement about using renewable energies, and that appropriate strategies be taken to decrease barriers to entry in order to enlarge renewable energy markets.
10) Japan’s residential fuel cell program – ENE-Farm. Within one year of the major utility companies in close partnership with PEM fuel cell developers like Toshiba and Panasonic, the ENE-Farm residential fuel cell brand achieved a nationwide public recognition rate of 71%. This was achieved by an unparalleled degree of cooperation between the corporate players involved and huge resources spent on advertising. Nothing like this level of public awareness has been achieved in any other country, and Japan is now well set to roll out its home fuel cell products to other parts of the world having gained deep experience in the marketplace.
Article by Shawn Lesser, president and founder of Atlanta-based Sustainable World Capital, which is focused on fund-raising for private equity cleantech/sustainable funds, as well as private cleantech companies and M&A. He is also a co- founder of the GCCA Global Cleantech Cluster Association, and can be reached at shawn.lesser@sworldcap.com
