Hello, it’s IINO.
I would like to broadcast IINO san’s Logistics Radio.
Today, I would like to talk about the topic, “Why should Japanese companies work to decarbonize?”
Daily Logistics Radio by IINO san in 14th Apr. 2022
SGL, Visualization of CO2 Emissions
The Japan Maritime Daily reported “SGL Makes CO2 Emissions Visible.”
SGL, Sumisho Global Logistics, is working to calculate and visualize CO2 emissions from international transportation.
To External Customers
It has completed visualization for projects contracted by its parent company, Sumisho Group.
And it is currently working on visualization for intra-Asia transportation with the aim of collaborating with external customers.
The general manager of SGL’s Global Logistics Division says, “Transportation itself has become a commodity in some aspects, and we want to create new added value as a trading company-affiliated logistics company.”
LCA Regulations in Europe
The article says decarbonization efforts as value-added, but it seems to me that decarbonization is more essential than that.
There is “LCA regulation” mainly in Europe.
LCA stands for Life Cycle Assessment, an initiative to assess the environmental impact of a product or service throughout its life cycle, from birth to disposal.
For example, in the case of automobiles, this means assessing the environmental impact of the raw materials, such as steel, from manufacture, use, maintenance, recycling, and disposal.
Japan Relies on Thermal Power
What it means is specifically electric energy.
In Japan, thermal power generation accounts for about 75% of the electricity produced domestically.
Cars, including parts, made with Japanese electricity are subject to LCA regulations. It is because that coal is burned to produce electricity, which emits carbon dioxide.
Since CO2 is emitted at the manufacturing stage of the car, it is subject to LCA regulations, which means that cars made in Japan cannot be sold in Europe or at additional cost.
Restrictions on Japanese Products in Europe?
Cars “made in Japan” will no longer be sold in Europe.
Therefore, Japanese companies are being forced to ‘decarbonize’ not only their manufacturing, but also their entire supply chain, including logistics.
As a result, all major logistics companies are working on decarbonization initiatives.
Employment due to LCA Regulations
Incidentally, there is talk that the LCA regulations may eliminate employment in the Japanese auto industry on the order of a million jobs.
This is because, in order to comply with LCA regulations, Japanese electricity will either be used to make automobiles in a carbon-free manner or automobile production will be carried out in overseas factories that can supply carbon-free electricity.
Japan has shut down nuclear power plants, and solar and wind energy sources are not yet as good as in Europe.
Toyota President said, “If things continue as they are now, we will have no choice but to make our products overseas. We will have to close our factories in Japan, and lose a lot of jobs, including those in the parts industry.”
Decarbonization as an Approach to the Future
It does not mean that all cars should be EV, but the world is moving in the direction of decarbonization at the moment.
Some companies may say “decarbonization” or “SDGs” simply to improve their image.
However, if they do not work on decarbonization, they will lose business in the future, and I think that is the essential point.
That’s all for today. Thank you.