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(Last updated: 4 Jul 2008)
Trends and opportunities
The market
Japan’s large population and lack of space for disposal of waste, combined with a dedication to reducing greenhouse emissions, has driven significant change in the environment sector in Japan in recent years.
Under a plan to promote recycling, the Environment Ministry called for a halving of the country’s waste disposal volume in 10 years to boost the current 10 per cent recycling rate to 40 per cent. This has led to initiatives to recycle industrial waste, whitegoods, plastics, construction and organic waste.
With respect to greenhouse emissions, Japan has agreed to cut its emission levels by six per cent. This has resulted in the development and implementation of technologies which help businesses understand their greenhouse emissions and meet new emissions targets. The new emissions targets are also driving an increasing focus on renewable energy.
Of further interest is the establishment of an emissions trading market, where companies will be able to trade rights to emit gases such as carbon dioxide, between companies who find it difficult to reduce their emissions and those who have no problems doing so.
An important factor in the success of Japan’s environment objectives is the rigorous system of laws which have been designed to achieve outcomes. A list of some of the environment laws include:
- The Basic Environment Law
- The Law on the Promotion of Measures to Cope with Global Warming
- The Clean Air Act
- The Basic Law for Establishing a Recycling-Based Society
- The Environmental Pollution Control Expense Sharing Law
Masahiro Fujita, Director General of the Energy Conservation and Renewable Energy Department of Japan was quoted at a seminar as saying ‘The 21st century is the century of the environment, and a prowess in environmental technology automatically becomes a source of competitiveness in such an era’. Although he was referring to the promotion of fuel cell technology in the automotive industry, his comments will apply equally to a variety of industries.
Trends
The environmental business sector in Japan is growing at a strong rate. From a base of approximately A$373 billion in 2000, it is forecast to increase by 35 per cent to A$590 billion in 2010, and almost double to A$730 billion in 2020.
The number of people employed in the industry is rising steadily. It is forecast to grow by 45 per cent in the 10 years to 2010 to reach 1,119,000 people, and a further 15 per cent in the 10 years to 2020.
The major sectors in the Japanese environmental business sector at present are:
- Waste processing services sector - collection, conveyance and processing of waste, industrial waste treatment.
- Waste recycling and reproduction sector - resource recovery and production of new products from waste.
Other sectors which are expected to grow in size:
- Manufacturing of equipment for air pollution prevention and materials for pollution prevention such as photo catalysts, catalysts and exhaust gas processing equipment.
- Environmental services such as education, training, and information, delivery of environmental reports, environmental auditing, ISO14000 acquisition training.
- Products and technology to reduce environmental loads and save resources.
An overview of the current and future expected contributions of a range of environment sectors is given below. Note the strong growth expected in the environment services, human waste treatment and environmental restoration/creation sectors.
Market size and employment size of environment industry
|
Market size |
Employment size |
| (100 million JPY) |
Growth |
(People) |
Growth |
| 2001 |
2010 |
2001-10 |
2001 |
2010 |
2001-10 |
| Environmental analyses devices |
390 |
400 |
2.56% |
1,630 |
1,080 |
-33.74% |
| Environment related services |
2,720 |
6,360 |
133.82% |
12,920 |
25,260 |
95.51% |
| Facility establishment (garbage landfill) |
260 |
340 |
30.77% |
240 |
310 |
29.17% |
| Waste treatment/recycle |
419,830 |
531,750 |
26.66% |
1,221,320 |
1,332,290 |
9.09% |
| Treatment of human waste/sewage |
870 |
12,110 |
1291.95% |
11,750 |
42,500 |
261.70% |
| Environmental restoration/environment creation |
17,310 |
54,840 |
216.81% |
61,840 |
192,830 |
211.82% |
| Environment-conscious product (material) |
32,970 |
43,770 |
32.76% |
59,010 |
77,760 |
31.77% |
| Total |
489,440 |
672,400 |
37.38% |
1,392,720 |
1,699,370 |
22.02% |
(Source: Environment Agency, Japan)
Waste management and recycling
Japan has a range of stringent recycling laws designed to reduce the amount of waste sent to landfill and maximise the reuse of materials in circulation. The most important of these laws is the 'Basic Law for Establishing a Recycling-Based Society', which dictates the processes for recycling across the community. Japanese companies now have no choice but to build the ‘3R’ rule (Reduce, Reuse, Recycle) into the design stage of all manufacture.
Japan’s lack of space for disposal of waste has led to the introduction of a host of laws governing waste management. The emphasis of these laws is on recycling wherever possible and they attempt to attribute different responsibilities across members of the community at each step of the product cycle. The burden of recycling is borne by consumers, producers and governments.
There is growing pressure to turn as much used material as possible into a new product or a form of energy. Appliance makers have jointly been managing recycling requirements by building more than 40 recycling plants across Japan. Consumers pay to have their fridges, air conditioners, TVs and washing machines taken away. In addition, Japan’s food law requires that businesses which generate 100 tonnes or more of food waste annually recycle at least 20 per cent of it, and in 2002, the government made the use of biomass a priority with a view to increasing energy derived from biomass by 50 per cent to 330,000KW by 2010.
New energy sources and energy saving
The reductions required under Japan’s Kyoto agreement are also resulting in a change in attitude to the use of energy, both in terms of source and usage. From 2005, Japan’s Environment Ministry will be seeking a budget provision for the implementation of a renewable energy policy whose aim will be to have 25 per cent of power needs met by in the near future. This augurs well for the solar, wind, biomass and bio-ethanol sectors. Steps are already being taken to use renewable energy. In fact, the Japan Energy Corporation has plans to develop wind farms at it’s a number of its oil refinery sites. Several sites have already been established in Hokkaido, the northernmost island, which is seen to be ideal for such farms due to the harsh climate and strong winds.
An overview of the current and future expected contributions of a range of renewable energy sources is given below. Note the strong growth expected in most sectors.
Market and employment size of the renewable energy sector
|
Market size |
Employment size |
| (100 million JPY) |
Growth |
(People) |
Growth |
| 2001 |
2010 |
2001-10 |
2001 |
2010 |
2001-10 |
| Solar power |
1,100 |
4,730 |
330% |
14,670 |
63,070 |
330% |
| Wind power |
360 |
2,240 |
522% |
1,150 |
4,000 |
248% |
| Waste/biomass power |
470 |
2,170 |
362% |
2,090 |
7,020 |
236% |
| Solar thermal utilisation |
340 |
5,100 |
1400% |
540 |
6,270 |
1061% |
| Black liquor/waste material |
270 |
270 |
0% |
430 |
330 |
-23% |
| Subtotal (supply-side) |
2,540 |
14,510 |
471% |
18,880 |
80,690 |
327% |
| Clean energy car |
1,280 |
18,840 |
1372% |
1,010 |
14,870 |
1372% |
| Subtotal (demand) |
1,280 |
18,840 |
1372% |
1,010 |
14,870 |
1372% |
| Total |
3,820 |
33,350 |
773% |
19,890 |
95,560 |
380% |
(Source: Environment Agency, Japan)
There is also expected to be an increase in the usage and development of energy saving devices. The table below indicates current and future expected contributions of a range of energy saving devices.
Market size and employment size of the energy saving sector
|
Market size |
Employment size |
| (100 million JPY) |
Growth |
(People) |
Growth |
| 2001 |
2010 |
2001-10 |
2001 |
2010 |
2001-10 |
| Top-runner devices/car and stand-by electric power consumption reduction devices |
5,310 |
13,100 |
147% |
9,250 |
23,720 |
156% |
| Efficient water heater |
- |
2,580 |
N/A |
- |
7,400 |
N/A |
| Energy saving for housing |
6,600 |
9,600 |
45% |
5,990 |
8,630 |
44% |
| HEMS |
- |
280 |
N/A |
- |
680 |
N/A |
| Energy saving for constructions |
3,690 |
14,930 |
305% |
3,320 |
13,420 |
304% |
| BEMS |
120 |
210 |
75% |
330 |
510 |
55% |
| (ESCO Business) |
-520 |
-1,540 |
196% |
-830 |
-1,890 |
128% |
| Action for traffic stream |
6,310 |
24,660 |
291% |
11,070 |
36,160 |
227% |
| Co-generation |
980 |
300 |
-69% |
1,560 |
370 |
-76% |
| High efficient industrial furnace |
75 |
2,000 |
2567% |
120 |
2,460 |
1950% |
| High efficient boiler |
- |
2,760 |
N/A |
- |
3,390 |
N/A |
| High efficient light LED |
- |
2,090 |
N/A |
- |
5,080 |
N/A |
| Energy saving technology development |
- |
4,390 |
N/A |
- |
12,590 |
N/A |
| Total |
23,145 |
76,900 |
232% |
31,640 |
114,410 |
262% |
(Source: Environment Agency, Japan)
Opportunities
Opportunities in Japan's environmental sector exist for Australian companies in the following areas:
- Innovative waste management and recycling solutions
- Innovative water treatment and management solutions
- Specialised environmental monitoring and consultancy
- Specialised energy consultancy
- Energy saving devices and building products
- Air-pollution prevention equipment
- Land contamination and remediation services
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