Renewable Energy in Japan: A Growing Opportunity for Australian Business

May 25, 2010


Recognising the need to reduce carbon emissions and make the move to renewable energy, the Tokyo Metropolitan Government has introduced an emissions trading scheme, the first of its kind in Asia. This is opening up new and exciting opportunities for Australian companies.

As Japanese households make the transition to solar energy, foreign companies are entering the market at an increasing rate. While these foreign companies have mostly consisted of Chinese and Taiwanese companies, South Korean companies are also getting involved. Australian businesses are taking a hard look at these opportunities too. As the Japanese Government offers subsidies for foreign companies to exhibit their products in Japan, there is no better time for Australian businesses expand into Japan.

Tokyo Emissions Trading Scheme

An emissions trading scheme (ETS) was introduced in Tokyo in April 2010, which aims to reduce emissions by 25% on 2000 levels by 2020. This is the first of its kind in Asia and a promising sign for the region. Around 1400 of Tokyo’s largest carbon-emitting companies now face severe penalties for failing to adhere to legally binding reduction targets. While Japan is still in negotiation about the terms of its national trading scheme, the Tokyo ETS may serve as a model for other regions looking to play their part in the transition to a low-carbon economy. It is also a positive sign for Australian renewable energy companies looking to expand their business into Japan. Given the Australian government’s recent policy changes on emissions trading and associated uncertainty surrounding future climate change policy, upstarting renewable energy firms will find investment decisions much easier within Tokyo’s ETS framework.

The Solar Technology Industry in Japan

Japan has emerged as a promising opportunity for solar technology companies as foreign companies continue to enter this expanding market. In Japan electric power companies pay generous prices for surplus solar energy which is increasing consumer demand for solar. This is good news for solar energy companies in a land of 126 million people. Japanese companies continue to dominate the domestic solar power industry, particularly Kyocera and Sharp. However, with the opening of the renewable energy market in Japan, foreign companies have found opportunities for expansion, and have even taken market share from these large Japan-based corporations. As Japan continues its move to solar energy, Japanese solar companies are now competing with an increasing number of companies from China, Taiwan and South Korea. Australian companies are also taking advantage of Japan’s demand for solar energy. One Australian company that has been successful in entering the Japanese market is Dyesol, a leading supplier of solar technology. Dyesol opened an office in Japan in 2009 and has established a strong distribution network. After participating in Green Device 2009, a green technology exhibition in Japan, Dyesol is now well positioned in the Japanese renewable energy market.

Invitation Programs to Clean Technology Exhibitions in Japan

There are a variety of exhibitions in Japan every year showcasing the latest renewable energy technologies. In order to increase foreign investment into Japan, the Japan External Trade Organization (JETRO) offers subsidies for foreign companies to attend and exhibit at these events, covering the cost of transport, exhibition space, accommodation and so on for the invitee. This year JETRO is administering several invitation programs for such exhibitions as Green Device, N-EXPO and Eco-Techno. These events promote technologies that will support the transition to a low-carbon economy, such as LEDs, solar cells, power semi-conductors and energy efficient components, which provide a unique opportunity for companies to get their foot in the door in the Japanese market.

Brendan Jinks is a Trade and Investment Development Officer at the Japan External Trade Organization's Sydney Office.

The views represented within this article are those of the writer and not necessarily the views of JETRO or the Japanese Government.