Decarbonization Policy: How Can Number of Eco-friendly Products Be Increased?

Editorial

15:44 JST, August 22, 2024

To achieve a carbon-free society, it is important to promote products made through manufacturing processes that reduce carbon dioxide emissions. It is hoped that the government will encourage the reform of supply chains for that purpose.

Prime Minister Fumio Kishida has instructed the Economy, Trade and Industry Ministry and other entities to design a new system by the end of this year to increase the number of eco-friendly, or “green,” products that emit less CO2 during the manufacturing process.

The government has set a goal of reducing greenhouse gas emissions to net zero by 2050. It can be said that one of the steep paths to this goal is green products.

The industrial sector, such as manufacturing and construction, accounts for 34% of CO2 emissions in Japan. Of this figure, the steel industry accounts for 38% and the chemical industry for 16%, which combined constitute more than 50% of the CO2 emissions discharged by the industrial sector. Without the development of supply chains for eco-friendly products in the manufacturing industry, the realization of the net zero goal will be difficult.

Green products include steel products made using electric furnaces, which emit less CO2, and resins made from plants, rather than petroleum, as their raw material. The problem is that because they are relatively expensive, they will not be widely used if the production of such products is left to the private sector.

For this reason, the government reportedly is considering procuring eco-friendly products for public works and other projects on a priority basis, and making the purchase of a certain amount of green products a condition for providing subsidies to companies for capital investment aimed at decarbonization.

If the government takes the initiative in purchasing products that contribute to decarbonization, it can be expected to spur private-sector demand. It would also be significant in encouraging companies to make capital investments to increase production.

The creation of supply chains that contribute to decarbonization is a global trend.

An international framework to expand the purchase of eco-friendly products was established in 2021, and currently about 100 global companies and organizations, including Apple Inc. of the United States and Europe’s Airbus SAS, are participating in the framework.

The European Union is also working to create supply chains for decarbonization within the region with green products as its core.

If Japan also builds decarbonization supply chains, it can be expected to expand its sales channels overseas.

To promote products with reduced CO2 emissions in Japan, one issue to consider will be requiring automobile manufacturers and other industries, which are major consumers of such products, to procure a certain amount of steel products made in electric furnaces and other goods.

Under the current circumstances, however, the production of eco-friendly products is limited and it is difficult to increase production rapidly. It is necessary to expand production in stages over time, while taking into consideration the international competitiveness of the products.

The government should provide a road map on how to proceed. It is also hoped that the government will clearly indicate the amount of CO2 emissions that can be reduced through this approach.

(From The Yomiuri Shimbun, Aug. 22, 2024)