Japan companies to sell "decarbonization technology" to oil-producing countries December 12, 6:17

How should we respond to climate change, which is becoming more serious around the world? The UN conference "COP28" to discuss countermeasures is being held in the Middle East's oil-producing country, UAE = United Arab Emirates. As the momentum for decarbonization rapidly increases even in oil-producing countries in the Middle East, which have realized affluence through oil resources, start-up companies are also moving to sell Japan's decarbonization technology. We covered the current situation in the UAE and other countries.
(Economic Affairs Reporter Yusuke Sasaki)

Why oil-producing countries are "decarbonizing"

A glass-walled exhibition booth occupying a corner of the COP28 venue. It is a place where start-up companies from various countries gather to disseminate their innovative decarbonization technologies.

This is the first time that such a large-scale exhibition booth of such a start-up company has been set up at the venue of a COP to discuss climate action, and the UAE, which holds the presidency of COP28, decided to set it up.

In the background, oil-producing countries in the Middle East, which have been dependent on oil resources, are rushing to transition to decarbonization. With the reduction of greenhouse gas emissions imminent, the oil money that has supported the economy is being invested in new technologies that will become the pillars of the economy for the next generation.

Among them, the UAE, which holds the presidency, has set a decarbonization target for the first time in the Middle East, and plans to invest 1630 billion dollars in renewable energy such as solar power and 24 trillion yen in Japan yen, and plans to accelerate investment in start-up companies.

Innovative Methods for Next-Generation Fuels

As countries in the Middle East search for new technologies, Japan startups are attracting attention.

Tsubame BHB, which originated from the Tokyo Institute of Technology, is strong in its ammonia manufacturing technology, which is expected to be a next-generation decarbonized fuel.

Since ammonia does not emit carbon dioxide when burned, it is expected to be used as a fuel for ships instead of heavy oil and as a substitute for coal for thermal power generation.

On the other hand, the Haber-Bosch process, which was established more than 100 years ago, is still common in the production of ammonia, but it must be synthesized in a high-temperature and high-pressure environment, and large-scale equipment is required for production.

In response, the start-up leveraged its proprietary catalyst technology to successfully manufacture it under low temperature and pressure conditions.

Ammonia can be safely produced even at small-scale facilities, which leads to cost reductions.

In recognition of this technology, we will cooperate with the UAE's national oil company, and we are investigating it with the aim of starting production locally.

Koji Nakamura, CEO of Tsubame BHB, said, "We would like to create a path that can contribute to the decarbonization of the energy and fertilizer sectors by utilizing the UAE's cheap renewable energy and our ammonia production technology."

Halving CO2 emissions through PET bottle recycling

Some Japan companies are attracting attention for their innovative recycling technologies that lead to decarbonization.

In the presence of the Prime Minister of Japan, the collaboration with UAE companies at the COP venue was announced by JEPLAN, a start-up company in Kawasaki City that recycles PET bottles.

Recycling PET bottles made from petroleum is also important for reducing carbon dioxide. Taking Japan as an example, the number of PET bottles shipped in fiscal 2022 amounted to 241.211 billion bottles, and carbon dioxide emissions amounted to <>.<> million tons.

The company's recycling technology can reduce carbon dioxide emissions by about half compared to the production of new PET bottles.

Until now, there is a limit to the number of times it can be recycled.

Even now, about 86% of the PET bottles sold are recycled, but it is said that only about 29% are recycled back into PET bottles.

The reason for this is that many impurities are included in the recycling process.

For example, when used PET bottles are collected in a collection box next to a vending machine, labels, caps, leftover drinks, and sometimes bottle-like glass may be mixed in, which leads to a deterioration in quality during recycling.

For this reason, it is difficult to recycle from PET bottles to PET bottles over and over again.

New technology to improve PET bottle recycling

Therefore, this company has developed a new technology called "chemical recycling".

First, crushed used PET bottles are dissolved in a substance called ethylene glycol and decomposed at the molecular level.

And by removing impurities using activated carbon, etc., it can be recycled to the same quality as new PET bottles, and it can be recycled over and over again.

Masaki Takao, President of JEPLAN: "One of the major advantages of
chemical recycling is its high ability to remove impurities.

In Japan, a recycling plant with a scale of 1,4 square meters, which is equivalent to one Tokyo Dome, has already been built.

2,2000 tons of 500ml PET bottles can be recycled annually, equivalent to 10 billion bottles.

It involves more processes than normal recycling, such as breaking down flakes from finely crushed PET bottles to the molecular level, and the scale of the facility is larger. For this reason, the price is higher than that of conventional recycled products, and the challenge is how to expand the business while lowering costs.

Considering the construction of a new plant in the Middle East

Therefore, the company is now aiming to expand into the UAE and is in talks with a local company that is interested in the company's technology to build a large-scale recycling plant.

The UAE has a lot of sunshine and a vast flat land, so the cost of solar power generation is low.

The cost of solar power generation is in the range of 4 yen per kilowatt hour, which is about one-quarter of Japan, and the start-up expects to reduce the cost of operating the factory.

We are trying to create a win-win relationship by joining forces with the UAE, which is seeking decarbonization technology with abundant funds, and Japan start-up companies, which have the technology but lack financial power.

Masaki Takao, President of JEPLAN: "Until now, large Japan companies have been expanding their business in the Middle East, including the UAE, but now that we have learned that startups have the opportunity to expand their businesses, we are happy to have the opportunity of
the COP to communicate this idea.

Japan Government Supports Overseas Expansion

The Japan government has also supported the overseas expansion of these start-up companies.

In January, Minister of Economy, Trade and Industry Nishimura and UAE Minister of Industry and Advanced Technology Jaber attended the meeting to establish a new intergovernmental framework for building relationships with UAE companies and to strengthen cooperation with the UAE.

We aim to collaborate with Japan startups and UAE companies not only in fields where cooperation has already begun, but also in a wide range of fields such as biotechnology, healthcare, food, and space development.

On the other hand, in order to achieve these goals, it will be important for startups and the government and related organizations to work together to propose and realize a combination of technologies and business models that solve the problems of the target country.

The Climate Crisis: Turning a Crisis into an Opportunity

As the damage caused by climate change, such as large-scale floods and record-breaking heat waves, becomes a common global issue, how to accelerate decarbonization efforts.

On the other hand, for Japan companies with innovative technologies, it is an opportunity to expand their business globally while contributing to the progress of global decarbonization.

While steadily advancing the decarbonization of Japan, we will spread the technology created there to the world. Whether this can be achieved is likely to be a test of whether Japan can achieve both decarbonization and economic growth.

Yusuke Sasaki, a reporter
in the Economic Department, joined
the Shizuoka Bureau
in 2014 and is currently in charge of
the Ministry of Economy, Trade and Industry