Saturday, June 10, 2023

Japan warns against allowing EU to set emission rules

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Japan must lead the global campaign to reduce carbon emissions or live in a world where international standards are set by European regulators, a leading adviser to the prime minister said in an interview with the Financial Times.

Comments from Takeshi Niinami, managing director of Suntory, underscore fears that Japan’s competitive strength in areas such as gasoline-electric hybrid cars could be destroyed if international standards discriminate against their technology and favor purely electric vehicles.

He made the remarks as the Japanese government rushed to develop its plans to achieve carbon neutrality by 2050.

“We are so afraid that [rules] stipulated, regulated and decided by the EU will become the global standard, ”Niinami said. “Then our competitive advantage would be so challenged.”

Mr. Niinami is one of two private sector members of the Government Council on Economic and Fiscal Policy, Japan’s main economic policy coordinating body.

He said Japan may seek to promote alternative standards through the Trans-Pacific Partnership, a group of 11 Asia-Pacific countries including Canada, Australia, Mexico, Vietnam and Malaysia, of which Japan is the ‘one of the main members.

“These are not the rules of Japan,” Mr. Niinami said. “It should be TPP rules or work with Asian countries where they still have issues like CO2 emissions from coal generators.”

At a press conference on Friday, Prime Minister Yoshihide Suga said the shift to carbon neutrality should be seen as a growth opportunity for Japanese industry, and not just an environmental policy.

“We need to find a new frontier in which Japanese companies can invest,” Niinami said. But while some Japanese companies see carbon neutrality as an opportunity, the crucial auto industry fears it will lose to its competitors by moving away from internal combustion engines.

As part of its 2050 carbon neutral roadmap, the Ministry of Economy, Trade and Industry plans to ban the sale of new gasoline-only vehicles by the mid-2030s, according to reports. close to the government.

But Japan wants to keep hybrids on the road for the foreseeable future – quite different from the UK’s phase-out plan all new gasoline or diesel vehicles after 2030, including hybrids after 2035.

The hybrid ban will be a blow to Toyota and other automakers, with the segment accounting for 30% of new car sales in Japan last year, while electric vehicles and plug-in hybrids only made up 1%.

“The development of the rules in the EU has progressed so quickly. You’re left behind, ”Niinami said, using electric vehicles as an example. “We must take into account that due to [electric vehicles] we will lose a lot of parts makers. “

Mr Niinami stressed that Japan’s goal should be net carbon neutrality, not zero domestic carbon emissions, suggesting that he expects a role for offsets such as reducing emissions in less Asian countries. developed. He said fuels such as hydrogen could play an important role.

Sony CEOs and other Japanese companies have also recently asked the government to outline its energy policy to meet its 2050 target, warning that further delays could hurt their businesses.

Mr Niinami said the government must address the question of how the country will increase the use of nuclear and renewable energy and reduce its heavy reliance on fossil fuels.

“Having said that, it’s a good thing that we can openly discuss the resumption of nuclear reactors, which was a taboo,” he added.


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