Tamaki Naoki (Director General, Power and New Energy Finance Dept. II, Japan Bank for International Cooperation (JBIC))

We established "Post-COVID-19 Growth Facility" to transform the economic structure, and create economic virtuous cycle for post-COVID-19 era by Japanese companies, consisting of two windows (1) “Decarbonized Window” aiming to support overseas businesses related to high-quality infrastructure and other affiliated overseas activities toward a decarbonized society, and (2) “Resilience Window” aiming to enhance supply chain resilience by securing, reorganizing, and double-tracking.

Focusing on finance related to decarbonization, the term of "active engagement” rather than “divestment” was highlighted. For example, in the case of Vietnam, JBIC has made high level approaches to the Vietnamese government to encourage for energy policy conversion such as formulation of power development plan along with expert approaches. The latest JBIC’s responses and efforts through loan provision with investment function in the fields of auto-technology, storage battery overseas hydrogen station infrastructure expansion were highlighted with the hope to engage ourselves by bringing relevant technologies toward carbon neutrality to Asia and throughout the globe.

Fujiki Masayuki (Managing Director, Global Head of Structured Finance, Solution Products Division, MUFG Bank, Ltd.)

Since the 1980s, MUFG has engaged in project finance related businesses with global presence having about 300 professionals working on project finance promotion.

We are becoming a major player in the ASEAN region with a group of strategic investments and alliances in Thailand, Indonesia, Vietnam and the Philippines etc.

Our current focus is on the fields of renewable energy and ESG finance, and recent examples of project finance include the Changfang & Xidao Offshore Wind Farm (Taiwan) and 100MW Solar Power Plant (Malaysia). Our future intention is to apply our global experience and achievement contributing to decarbonized projects in Japan, and Asia.

Tawa Junya (Executive Officer, Planning Group of Corporate Strategy Department, JERA CO., Inc)

We are a power generation company in Japan producing about 30% of Japan's electricity supply in which 80% of this 30% is generated by LNG. In the ASEAN region, we have run the power generation operations in seven countries with about 5 gigawatts of capacity. There is a gain in energy transition momentum in the region.

Focusing on energy transition from the company’s perspective, it is found that LNG has attracted much attention in recent years. Three categories for LNG’s demand were highlighted namely 1) replacing conventional use of domestic gas with LNG import; 2) shifting from conventional heavy oil power generation to cleaner LNG; and 3) transitioning to LNG from coal-fired power generation which is the latest trend and rising momentum in the region. However, with the current state of ASEAN’s high economic growth, it is difficult for renewable energy alone to exclusively support the entire economic growth due to the low energy intensity.

There are also criticisms that building gas-fired plant is the lock in of fossil fuel, and it is necessary to make efforts by business operator.

The company therefore declared its mission so-called "JERA Zero CO2 Emission 2050" in last October aiming at taking on the challenges of zero CO2 emission in JERA’s business both in Japan and oversea to help achieve a sustainable society with following three approaches; (1) Complementarity between Renewable Energy and Zero CO2 Emission Thermal Power General; (2) Establishment of Roadmaps Suitable for Each Country and Region; and (3) Smart Transitions.

We consider that, with carbon neutrality declaration in the future, utilizing LNG is currently one step towards the realization of carbon neutrality rather than “Lock in”. Therefore, carbon neutrality declaration is necessary if we continue the utilization of LNG.

Furthermore, JERA, as a business operator, recognizes three focusing points: 1) setting a timeline for carbon neutrality and considering various options in the process. 2) considering options beyond LNG as a door has also opened for a hydrogen-based society which JERA is now also conducting a demonstration project to commercialize the operation of ammonia co-firing, and 3) low carbonization in the entire LNG supply chain as user and suppliers in Asia are massive while LNG is still in need.

Clearly, energy transition would be full forced in the ASEAN region where LNG would continuously play an important role. We must continue to support energy transitions in each country.

Suda Toshiyuki (Program Director for Carbon Solution Business in Corporate Strategy Headquarters, IHI Corporation)

As one of Japan's heavy industry companies, we have contributed to the economic development of ASEAN by providing equipment related to environment, resources, and energy such as coal-fired power plants and LNG terminals. With our engineering experiences as well as the full use of new technologies and existing equipment, we believe that it would lead us to a realistic approach related to the carbon neutrality.

In the ASEAN region, we are operating a wide range of businesses from thermal power generation to biogas and carbon recycling projects.

Our vision to achieve carbon-neutrality through IHI technology has covered 3 key elements; (1) Carbon neutrality of power generation - Transition from fossil fuel to renewable energy (i.e. hydrogen, ammonia); (2) Carbon neutrality of fuel – On top of electrification, maximizing utilization of existing assets/infrastructures such as biofuel and e-fuel to minimize cost of transition as; and (3) Use of carbon neutrality feedstock.

To actualize the vision, there are obstacles to overcome, such as cost, so it requires careful consideration of the transition route. Through IHI’s technology roadmap to achieve carbon neutrality, we willingly prepare available technologies at affordable costs to meet the roadmaps of each ASEAN country towards the achievement of carbon neutrality.

• Mr. Fujiki (MUFG Bank, Ltd)

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  Asia is diverse with different stages of economic development and continue growing of energy demand by 2050. As for this reason, the western framework especially European model could not transplant to Asia. To balance the achievement of economic growth and decarbonization would be dilemma.

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  The supporting structure to meet the current conditions of Asian countries would be needed, and in this context, Japan could provide both financial and technologies support to the ASEAN region.

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  The important step to be taken by each ASEAN country is to create a solid roadmap/pathway towards decarbonization in order to obtain private sector’s finance.

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  Focusing on possible risks, we agree that international rule-making movements, such as Basel regulations and OECD regulations would be a risk. It is imperative to raise the Asian voice/consensus from international community to explain the reality/circumstance of Asia through communication efforts along with gaining support from the global community.

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  Regarding the information disclosure system as mentioned by Mr. Tamaki of JBIC, if the information disclosure requirements and decarbonization procedures differ from country to country, it would be troublesome and risk factor for financial institutions due to increasing cost. Within Asia, the consistent framework must be built.

• Mr. Tamaki (JBIC)

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  We understand that the financial disclosure obligations could be considered as one of the risks.

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  It is not also realistic to impose the stringent Western standards as they are. We should consider whether carbon neutrality should be prioritized at the expense of regional economic development and people's quality of life. It is necessary to provide support to the extent that it is possible from humanitarian perspective.

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  In addition, we should be aware of the risks on global level, such as in the case where utilizing renewable energy and storage batteries could lead to environmental destruction by digging lithium for making storage batteries.

• Mr. Suda (IHI)

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  A few years ago, Asian customers did not pay much attention to the clean use of energy, but thing is changing now, there has been an increase in proposals/requests for environmentally friendly technologies.

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  IHI is being cautious not to propose such extreme and difficult-to-use technologies. Renewable energy might not be the excellent solution. We rather propose realistic and optimal solutions such as Ammonia mixed combustion by using technologies which can be handled by the local engineers with minimal modification while utilizing existing assets, maintain existing skills in workforce, as well as keeping each country’s circumstances in mind.

• Mr. Tawa (JERA)

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  It is extremely dangerous and risky for Western rules to become the “de facto” standard and the use of renewable energy is forced, without taking into account of the diversity of Asian countries and the pathways that each country aims to take.

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  Towards a resilient perspective, it is essential to consider how to supply affordable electricity while promoting fluctuating renewable energy supply and liberalization of the electricity market. We should note that there are differences in supporting resilience between the continental nations with very large transmission lines and gas pipelines, and the maritime countries with scattered energy bases. Risk is likely to occur for resilient conservation if we allow electricity supply only by renewable energy.

• Mr. Fujiki (MUFG Bank, Ltd)

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  In forming a global-based consensus, obtaining certification/endorsement from related international organizations related to climate action such as the United Nations and the World Bank is very effective.

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  With that said, too specific standards/criteria would become problematic with anticipated drastic changes in the rapid shifting market. On the other hand, vague set of standards might cause confusion among the parties involved in actual operation. Having that in mind, the first step for us all is to raise our voice/consensus on the global-based.

• Mr. Tamaki (JBIC)

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  From personal point of view, the word “transition” is hard to interpret. The word “transition finance” often gets misunderstood that it is a system which provides financial support during the transition period, from fossil fuels to renewable energy. However, it is actually aimed at broader range of transition period in global scale, and we should have entire picture to look at the decarbonization process further.

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  From the perspective of the company, JBIC is currently working on the green finance by evaluating projects that meet environmentally friendly standards such as CO2 emissions that are lower than each country’s average value published by the IEA, and we believe it is a convincing method.

• Mr. Suda (IHI)

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  We have to demonstrate/show the credible and trustworthy technologies to financial institutions for project investment.

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  Japan can take the lead in promoting carbon neutrality. To gain trust of investors in technologies contributing to carbon neutrality roadmap of each country, we are willing to collaborate with ASEAN countries on the international standardization of technologies and technological development.

• Mr. Tawa (JERA)

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  From a developer’s point of view, it is important to formulate a roadmap specifying detail of individual projects. Roadmap approach should be practical and executed on the ground without awaiting.

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  Regarding the certification of being “green”, consideration in both “Emission from domestic power generation” and “Fuel procurement from international market”, must be considered. The former involves to national law and Nationally Determined Contributions (NDCs) in each country and the latter relates to each international certification, and both approaches need to be linked.

• Mr. Tamaki (JBIC)

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  Along with the high-level discussions, frequent exchange of opinions and seminars at the practical level are beneficial. This is exactly what I meant when I mentioned “Engagement”.

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  Rather than an individual, the messages sending out from industry-government-academia in the government-lead platform should be created in order to effectively urge the local governments of partnering countries to move forward energy transition.

• Mr. Fujiki (MUFG Bank, Ltd)

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  Getting involved in each country’s formulation of the roadmap from an early stage is necessary.

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  We believe that financial institutions can contribute to the formulation of roadmap in respect of creating institution and improving lending potential (bankability), whereas the industries can share practical advices, extensive skills and knowledge.

• Mr. Tawa (JERA)

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  The strength of formulating the master plan is that it is a realistic one in recognition of the transmission line network. We cannot call it a proper and workable roadmap unless it includes ways and packages to ensure a stable supply of electricity and incorporate this new concept of carbon neutrality.

• Mr. Suda (IHI)

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  Our role is to present a list of solutions that suits current situation of each partner country the best. We invited researchers and government agencies from each country to a brainstorming session discussing on carbon technology with presentations provided. Such steady activities are important because they could sometimes lead to projects in other countries and become a big wave of movement eventually. In this respect, the government could provide full and casual discussion opportunities.

• Mr. Tawa (JERA)

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  Roadmap making is a comprehensive art involving technologies, energy supply etc. It is of course necessary to understand whether it is possible to provide finance, which is the main theme of today, and also whether it can be acceptable in the current trend and environment.

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  Since the government plays an important role in energy business as institutional assistance, it would be effective if Japanese government could push forward transition and going green from policy and institutional points of view. The government led institution can become a package going beyond what the private sector/companies could do.

• Mr. Tamaki (JBIC)

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  It is necessary for export as a package including policy to better fit the circumstances/major characteristics of each country. Japan needs a team with industry-government-academia collaboration, to push and urge transition to ASEAN countries.

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  It is also important not to impose Japan-specific method on ASEAN countries, but rather see them as our team to involve the local developers and businesses from ASEAN countries when discussing with each country individually.

• Mr. Fujiki (MUFG Bank, Ltd)

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  For creating the Asian version of the transition finance framework, ASEAN countries and Japan needs to work together as one. It is crucial for people who are seriously working on green finance/transition finance in ASEAN countries and Japan to collaborate so that consensus can be obtained not only in Asia but also on a global basis.

• Mr. Tamaki (JBIC)

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  In Asia, Japan with its overwhelming economic power needs to recognize its responsibility in emitting greenhouse gas. In this sense, Japan is ready to work with ASEAN countries on this transition. There are also many Japanese companies with advanced technology. Putting solutions on the table and working jointly on energy transitions with ASEAN countries shall be further encouraged.

• Mr. Suda (IHI)

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  Currently, Southeast Asia is energetic and enthusiastic, and Japanese companies have so much to learn from ASEAN partners and jointly develop technologies in a humble manner.

• Mr. Tawa (JERA)

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  In some countries, the reason for working to reduce CO2 emissions is more vivid in the sense that it is to address air pollution rather than global warming. Towards the next 10 years, it is of importance to make first step towards the transition apart from expecting a technological breakthrough. It is thus crucial to steadily move one step forward, just as there are countries that are making the transition from coal to gas fuel at this moment.

• Mr. Fujiki (MUFG Bank, Ltd)

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  As a banker who highly experienced in finance related to social infrastructure and power generation in Asia, I would like to make a contribution in the context of transition finance. For financial institutions, the hydrogen and the next-generation fuels for energy transitions are immensely stimulating fields and we hope to continue actively supporting them.

• Mr. Soda (METI)

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  According to discussion with energy officials in various countries, I have impression that they understand the importance of combating climate change but there's the challenge on how they should proceed with the measures in order not to endanger economic growth.

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  Today's panel discussion made me realize, once again, that it is of significance to encourage the public and private engagement in seeking way to achieve economic growth simultaneously and support decarbonization as well as energy transition in Asian countries.

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  I also got a sense of reassurance to the importance of transparent communication with the international community such as Europe and the United States to express the current situations and ideas of Asia while working closely with each country in the spirit of “engagement”.

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  The strengths of Japan include 1) industrial technology, 2) finance of public-private financial institutions, and 3) knowledge and experience of industry-government-academia. Based on this discussion, I realized that building a platform that can provide the whole package to the ASEAN region is needed while Japanese government must take initiative to accomplish that.

Kobori Hideki (President & Representative Director, Asahi Kasei Corp.)

Our company was founded in Miyazaki Prefecture in 1922 and will celebrate the 100th anniversary next year. Our current businesses are comprised of three sectors: materials, homes, and healthcare.

We aim to achieve sustainability as the core through the two mutually reinforcing aspects: "contributing to sustainable society" and "sustainable growth of corporate value." We will use the scientific capacity that we have cultivated since our foundation has worked toward the realization of a carbon-neutral and sustainable world. In addition to the contribution to the environment through our existing businesses, we will tackle future social challenges such as next-generation energy, carbon capture and utilization, and the circular economy.

In such a process, unprecedented technological development is required. We believe that "capture and utilization of CO2” and “hydrogen” are the keys. Our typical efforts will include the world's largest alkaline water electrolysis hydrogen project in Fukushima and the ALIGN-CCUS project in Germany. To promote these initiatives, "Green Solution Project" was established directly by the president this April. We expect this project will play a major role in creating a sustainable society and grow as one of our core businesses in the field of carbon neutrality.

Digital is also an indispensable factor for realizing a sustainable society. For instance, we are working on new material development by utilizing materials informatics and productivity improvement by application of remote monitoring system.

Toriihara Shunji (Director, Senior Executive Officer, MAYEKAWA MFG. CO., LTD)

Our company was founded in 1924. We focus on industrial refrigeration equipment and system for manufacturing, sales, and providing after-sales service across 106 offices and 10 factories in 45 countries around the world, including the ASEAN region. We have 4,737 employees, and half of them are overseas employees. Our typical product/ service application field is industrial refrigeration equipment used in large refrigerated warehouses.

The latest industrial refrigeration equipment is required to be ozone-friendly, low CO2 emission and energy conserving, therefore we have done a lot of efforts in the development of natural refrigerants. Currently in the ASEAN region, ammonia liquid pump system called as central system is widely applied in large scale refrigeration facilities. However, this kind of system requires a large amount of ammonia refrigerant, which causes safety management issues and consumes a lot of energy. Therefore, we propose the “ammonia-carbon dioxide unit”, a technology cultivated in Japan, realizing 20% of energy conservation and 98% of ammonia refrigerant reduction compared to the conventional technology. In Japan, the ammonia-carbon dioxide unit is widespread up to 24.6% of large refrigerated warehouses, thanks to government subsidy.

Based on the experience in Japan and the support from METI, Japan, we will provide ASEAN countries with a "package" including the revision of refrigeration safety regulations and the development of safety management talents. We will make our best efforts to both the construction of cold chain logistics and the resolution of global climate issues through those efforts.

Ogawa Tatsuo (Executive Officer, CTO, Panasonic Corporation)

Since the 1970s, we have started “A company as a public entity of society. The development of industry must not destroy nature and impair human happiness” is one of our management philosophies. In June 2017, we formulated "Panasonic Environment Vision 2050" covering all scopes from 1 to 3.

As for the energy consumption reduction in Scope 1 and Scope 2, we are expanding our “Zero CO2” factories around the world. From the perspective of energy generation, we signed a large-scale solar power leasing agreement in Singapore and utilized hydrogen in manufacturing and logistics.

In addition, we have been making continuous efforts in Scope 3, which is a very challenging field. We introduced “ENE-FARM” to Harumi residential area and provided “Suita Sustainable Smart Town” energy service. Especially the latter project successfully created first "100% Renewable Energy Town" in Japan.

In the future, we will continue making an environmental contribution to the whole world including Asia by making full use of various customer contact points.

Seto Kinya (President and CEO, LIXIL Corporation)

As a maker of pioneering water and housing products, we are developing our 1.4-trillion-yen business across more than 150 countries and regions with multiple global brands.

Under our "Environmental Vision 2050", we aim to reduce CO2 emissions from our business processes, products and services to net zero. Our goal is to become a leader in the field of preserving water and limited resources for future generations. We are focusing on three areas as part of this: climate change mitigation and adaptation, water sustainability and circular economy.

Today, I would like to introduce two examples related to our sustainability initiatives. First, we are recycling waste plastic and waste wood. Through our efforts to recycle waste wood and plastic, including laminated materials and marine plastics, which are difficult to recycle, we are producing a next-generation wood-plastic composite. This can be utilized as an alternative material for pavements. This is a very important technology, not only for Japan, but also for countries in the Southeast Asia region surrounded by the sea. Second, we have developed simple sanitation and hygiene solutions for developing countries. Our low-cost, simple toilet system "SATO", as well as novel hand-washing solution "SATO Tap", enable us to help solve global sanitation and hygiene issues.

• Mr. Kobori (Asahi Kasei Corp.)

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  In the 1990s, the ASEAN region was a production base because of low labor costs, but it will become a huge market in the future.

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  Against the backdrop of the US-China decoupling, the importance of “regional strategy” is increasing, in addition to “global-wide strategy”. Considering that the RCEP agreement is expected to revitalize economic activities within the ASEAN region as well as the necessity and potential of Japan-ASEAN cooperation for a carbon-neutral society, the strategic significance of the ASEAN for us is greater. ASEAN will be an important partner in promoting our business in the future.

• Mr. Toriihara (MAYEKAWA MFG. CO., LTD)

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  Since our products are supposed to be used for long period of 20 to 50 years, it is necessary to look at not only the initial cost, but also the life cycle cost and the environmental friendliness in the future carbon-neutral society. To avoid meaningless cost competition, we need to promote deeper discussions with more local stakeholders in the ASEAN region.

• Mr. Ogawa (Panasonic Corporation)

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  The idea of starting a local business that focus on Japanese quality only cannot keep up with the speed of competition. It is important to work closely with the local partners to develop and provide suitable solutions for the local needs. There is also a possibility of reimporting those solutions to Japan.

• Mr. Seto (LIXIL Corporation)

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  Compared to Europe and the United States, ASEAN consumers tend to prioritize price over environmental factors. However, since the COVID-19 crisis, we have noticed that demand for products related to health and safety is increasing. Responding to this kind of need will be key to our competitiveness.

• Mr. Fujisawa Hideaki (Director, Asia and Pacific Division, Trade Policy Bureau, METI)

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  The focus of conventional industrial cooperation is to create an “industrial agglomeration” in Southeast Asia based on the manufacturing industry, including 1) promoting market integration by EPA, 2) development of human resources and supporting industries, and 3) establishment of systematic cooperation framework such as AMEICC.

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  On the other hand, the concerns and needs of the ASEAN region have changed significantly. For example, there is growing awareness in solving environmental issues and social issues such as economic disparities between regions. In addition, the fields of cooperation are diversifying into agriculture, medical care, tourism, etc. There is also a desire to create new industries that will drive further development. Global trends such as “green” and “digital” have brought new challenges, which require us to look for ASEAN-style countermeasures.

• Mr. Seto (LIXIL Corporation)

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  We make products such as sanitary ware and faucets, which need little care and maintenance, and aid in water conservation. Regarding the issue of waste plastics, we have recently focused on developing our technology to recycle plastic waste into the materials for pavements, as mentioned earlier, which will also meet the increasing demand for infrastructure development in the ASEAN region.

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  We are also developing water purification solutions such as X Water in Japan and GROHE Blue globally. GROHE Blue allows us to enjoy carbonated water from faucets, which will reduce the number of PET bottles in favor of reusable bottles.

• Mr. Toriihara (MAYEKAWA MFG. CO., LTD)

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  The passion of a private sector or individual employee is not enough when expanding overseas business. It is necessary to formulate a high-level strategy based on interstate cooperation. For example, in collaboration with METI, we have been involved in rulemaking and human resource development related to refrigeration in the ASEAN region. Such efforts by the public and private sectors will make Japan more competitive.

• Mr. Kobori (Asahi Kasei Corp.)

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  Under the COVID-19 crisis and changing global trends, it is necessary to reconsider the value by a wide range of perspectives. In addition to our high capacity in material sector, we will also provide engineering and operational services as a "package" to increase our value.

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  Therefore, cooperation with other industries that we often mentioned as “Connection” is extremely important. In Japan, such cooperation is realized in each field under the initiative of the government. In the ASEAN region, we will further strengthen collaboration with leading local companies in the hydrogen field.

• Mr. Ogawa (Panasonic Corporation)

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  Since our home appliance business is a field that close to consumers’ daily lives, the design differs considerably depending on local habits. We would like to work closely with local partners who are familiar with local user experience and lifestyle. At the same time, we will efficiently expand the Japan-based design platform globally by standardization.

• Mr. Fujisawa (METI)

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  It is important to have a deepening understanding and concerns regarding green in the ASEAN region (e.g. Sea Level Rise, Marine Plastics, and the Thai BCG Economic Model) and recognize the perspective of green as an opportunity for future economic growth (e.g. Introduction to EV Policy in Indonesia).

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  Directions of future cooperation may include: 1) realization of “realistic transitions" that connect short-term and medium-term efforts, 2) realization of a “virtuous cycle” combined with “economic growth" and "climate change countermeasures", and 3) realization of a "virtuous cycle" that will recirculate new businesses in the ASEAN region to Japan and lead to economic growth on both sides.

• Mr. Kobori (Asahi Kasei Corp.)

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  Our annual revenue is around 2 trillion yen, and the ASEAN region occupied 5% of it. We would like to expand it in the future.

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  Considering a new society of the post-COVID-19 era, we would like to co-create with our ASEAN partners in the fields such as green, recycling, and hydrogen. It is conceivable to implement new technologies in the ASEAN region first and bring the solutions to Japan.

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  Start-ups in the ASEAN region are also attractive. We have already established corporate’s venture capital and aim to build medium to long-term partnerships with the new players, including talent exchanges.

• Mr. Ogawa (Panasonic Corporation)

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  In order to create a virtuous cycle between ASEAN and Japan, we will actively carry out ESG management to solve environmental and social issues. In addition, we will keep contributing to the improvement of our lives and environment together with the people of ASEAN based on our Environment Vision 2050.

• Mr. Toriihara (MAYEKAWA MFG. CO., LTD)

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  Geographically, the ASEAN region is very close to Japan, and we used to increase the involvement in operations. In the future, we will strengthen the awareness of creating a new market in alignment with the local context and needs.

• Mr. Seto (LIXIL Corporation)

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  We have many employees in the ASEAN region. LIXIL’s corporate purpose is to make better homes a reality for everyone, everywhere, and we ensure that every employee understands the responsibility and the significance of our business. We adapt to specific circumstances of ASEAN countries in order to make positive contributions.

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  In the ASEAN region, there is room for further improvement related to policies on safety and security in manufacturing. We expect that the Japanese Government / METI will play an active role.