{"id":183,"date":"2024-10-12T23:37:18","date_gmt":"2024-10-12T14:37:18","guid":{"rendered":"https:\/\/startuphokkaido.com\/en\/?p=183"},"modified":"2024-10-14T09:45:55","modified_gmt":"2024-10-14T00:45:55","slug":"hokkaido-going-green-%f0%9f%8c%bf","status":"publish","type":"post","link":"https:\/\/startuphokkaido.com\/en\/blog\/183\/","title":{"rendered":"Hokkaido shifting toward Green Transformation"},"content":{"rendered":"
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Photo by\u00a0Walter H\u00a0on\u00a0Unsplash<\/p><\/div>\n<\/div>\n<\/div>\n<\/figure>\n

Japan shifting toward Green Transformation (GX)<\/h1>\n

In May 12th 2023 the Cabinet Office of Japan passed the GX (Green Transformation) Promotion Act. Starting from the year 2023 the Government of Japan is planning to invest 150 trillion Japanese yen (1 trillion euro) of public-private financing over the next 10 years.<\/p>\n

Green Transformation, better known as \u201cGX,\u201d is an initiative led by the Government of Japan to bring a shift from an industrial structure centered on fossil energy to one centered on clean energy.<\/p>\n

According to\u00a0the investment roadmap<\/a>\u00a0of 150 trillion JPY published in February 2023, the Government of Japan specified 22 industrial sectors to meet carbon neutrality and contribute to the energy transition in Asia.<\/p>\n

Out of the total amount of 150 trillion JPY, the Government of Japan is planning to spare 20 trillion JPY (133 billion euro) and cover the rest with the investment from private sectors.<\/p>\n

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Reference:
\nBasic Policy for GX \u2014 Roadmap for the next 10 years<\/a><\/p>\n<\/blockquote>\n

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Photo by\u00a0Ar\u016bnas Naujokas\u00a0on\u00a0Unsplash<\/p><\/div>\n<\/div>\n<\/div>\n<\/figure>\n

Growth-oriented carbon pricing concept<\/h1>\n

Ministry of Economy, Trade and Industry (METI)\u00a0<\/a>researched about public investment made toward Green Transformation across the world.<\/p>\n

According to\u00a0the data that METI summarized<\/a>\u00a0in February 2023, EU invests 1 trillion euro over the 10 years, Germany invests 50 billion euro over the 2 years, France invests 30 billion euro in 2 years, the United Kingdom invests 26 billion pound in the next 8 years, and the United States invest 369 billion USD over the next 10 years.<\/p>\n

Japan decided to invest the same size of budget as what the EU accumulated for the green shift.<\/p>\n

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Energy Self-Sufficiency Rate by country based on IEA Data Base (METI)<\/p><\/div>\n<\/div>\n<\/div>\n<\/figure>\n

Compared to the other countries Japan relies on majority of fossil resources to abroad and the energy self-sufficiency rate is only 11%.<\/p>\n

The Cabinet Office set three main initiatives in order to accelerate the Green Transformation:<\/p>\n

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  1. 20 trillion JPY initial investment over the next 10 years using GX Economic Transition Bonds<\/li>\n
  2. Growth-oriented carbon pricing concept<\/li>\n
  3. Utilization of new financial methods<\/li>\n<\/ol>\n

    (1) GX Economic Transition Bonds<\/h1>\n

    The bonds<\/p>\n

    i. target projects and businesses that private companies cannot solely make investment decisions due to high risks involved into the innovation<\/p>\n

    ii. prioritize businesses with high impact on carbon emissions and big market size that contribute both economic growth and emission reduction<\/p>\n

    iii. need to focus on measures that holistically change the behavior of corporate investment and demand side<\/p>\n

    iv. only invest in projects that contribute the increase in volume of investment in terms of human capital & physical assets in Japan<\/p>\n

    (2) Growth-oriented carbon pricing concept<\/h1>\n

    A specific timeframe for Green Transformation was announced.<\/p>\n

    From 2026<\/h2>\n

    Legalize emission trading<\/strong>\u00a0for industries with high emissions<\/p>\n

    From 2028<\/h2>\n

    Tax levy on importers<\/strong>\u00a0based on CO2 emissions per fossil fuel<\/p>\n

    From 2033<\/h2>\n

    Auctioning of CO2 emission allowances<\/strong>\u00a0for electricity providers<\/p>\n

    (3) Utilization of new financial methods<\/h1>\n

    Attracting more investment from private sectors<\/strong><\/h2>\n

    Based on the financed emissions, forming a framework that transition finance is more appreciated in regard to the measurement and disclosure measures that are implemented internationally.<\/p>\n

    Establishing blended finance<\/h2>\n

    A public organization named \u201cGX promotion agency\u201d will implement risk supplementation measures such as debt compensation by utilizing financial method. In collaboration with not only private financial institutions but also\u00a0Japan Finance Corporation<\/a>,\u00a0Development Bank of Japan<\/a>,\u00a0The Innovation Network Corporation of Japan (INCJ)<\/a>\u00a0and\u00a0Japan Green Investment Corp. for Carbon Neutrality (JICN)<\/a>.<\/p>\n

    Promoting sustainable finance<\/h2>\n

    With the Corporate Governance Code Revisions in June 2021, listed companies on \u201cPrime Market\u201d under Tokyo Stock Exchange in particular should collect and analyze the necessary data on the impact of climate change-related risks and earning opportunities on their business activities and profits, and enhance the quality and quantity of disclosure based on the Task Force on Climate-Related Financial Disclosures (TCFD) Recommendations or an equivalent framework.<\/p>\n

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    Reference :\u00a0JPX Publishes \u201cSurvey of TCFD Disclosure in Japan<\/a>\u00a0(FY2022)<\/p>\n<\/blockquote>\n

    Thanks to this revision, the number of Japanese corporates supporting TCFD is the biggest in the world, but the contents of the disclosure is still under the development. Along with the promotion of sustainable finance, the Government of Japan will offer trainings through TCFD consortium for developing human resources that are knowledgeable about green technologies, finances and climate policy.<\/p>\n

    Hokkaido going green<\/h1>\n

    Finally how is Hokkaido going green?<\/p>\n

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    Naomichi Suzuki announcing the launch of 500 million JPY foundation (Nikkei News Paper)<\/p><\/div>\n<\/div>\n<\/div>\n<\/figure>\n

    The mayor announced the launch of 500 million JPY foundation<\/h2>\n

    On April 25th, 2023 the mayor of Hokkaido Government, Naomichi Suzuki announced to build 500 million JPY foundation (3.3 million euro) fund by utilizing donation from Mitsubishi UFJ.<\/p>\n

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    Reference : \u5317\u6d77\u9053\u3001\u8131\u70ad\u7d20\u57fa\u91d1\u306b\u307e\u305a5\u5104\u5186 \u4e09\u83f1UFJ\u9280\u306e\u5bc4\u4ed8\u6d3b\u7528<\/a><\/p>\n<\/blockquote>\n

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    Photo by\u00a0Fredrik \u00d6hlander\u00a0on\u00a0Unsplash<\/p><\/div>\n<\/div>\n<\/div>\n<\/figure>\n

    Mitsubishi UFJ financial group pointed out that the offshore wind power generation in Hokkaido is expected to reach 15 gigawatt by 2040 whereas Japan as a whole produce 45 gigawatt. By region, Hokkaido will also be the biggest offshore wind power generator surpassing Kyushu region which generates up to 12 gigawatt.<\/p>\n

    Hokkaido Electric Power Co., Inc. joined GX League<\/h2>\n

    Hokkaido Electric Power Co., Inc. (HEPCO) announced to officially join GX League, a forum for cooperation between a group of companies and the government, universities, and academic institutions in order to meet greenhouse gas reduction targets and increase industrial competitiveness by using Japan\u2019s goal of carbon neutrality by 2050 as an opportunity for economic growth.<\/p>\n

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    Reference: About GX League<\/a><\/p>\n<\/blockquote>\n

    By joining GX League, HEPCO aims to accumulate knowledge and know-hows to achieve carbon neutral missions and actualize \u201cZero Carbon Hokkaido\u201d.<\/p>\n

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    Zero Carbon Hokkaido<\/a><\/figcaption><\/figure>\n

    Zero Carbon Hokkaido<\/h1>\n

    Hokkaido aims to achieve net zero by 2050 (48% less emission by 2030 compared to 2013). In 2022 Hokkaido especially worked on the followings:<\/p>\n

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    1. supported each municipality to work towards decarbonation<\/li>\n
    2. visualized CO2 emissions by raising awareness and promoting behavioral changes of citizens and corporates in Hokkaido<\/li>\n
    3. worked toward zero-energy building (ZEB) and installed next-generation vehicles<\/li>\n<\/ol>\n

      In order to work toward the goal, Hokkaido Government enacted \u201cZero Carbon Hokkaido promotion act\u201d on April 1st, 2023 and newly added articles to raise awareness of<\/p>\n