Overview

The size, geography and high population density of Japan lends it unfit to sustain the more than 53 million tonnes of municipal solid waste ( MSW) generated each year by its mass consumption society. Although 78% of MSW is currently being incinerated, the preferred method of disposal in the future will be recycling and, only if not feasible, incineration with energy-recovery. This way, the Japanese government aims to reduce the volume of MSW to 50 million tonnes by 2012.

Government legislation has been the catalyst in changing and expanding the Japanese MSW management market. Enacted in 2000, the Basic Law for Establishing a Recycling-Based Society requires that these options, in the following priority order, be taken: reduce - reuse - recycle (3Rs), recover energy, and dispose waste appropriately.

The 3R initiative aims to reduce by half the volume of untreatable waste by 2010. It has shown some success as final waste disposal volumes have decreased in recent years despite the increase in total waste volumes. One active political measure related to the 3R initiative is the development of Eco-towns. As of July 2007, 27 Eco-towns have been set up in Japan. They strive to limit waste production by granting subsidies to private companies who set up and operate recycling facilities in their area.

According to the Ministry of Environment, the Japanese waste disposal market will grow from $33.1 billion in 2000 to $70.9 billion in 2010 and to $102.0 billion by 2020

Incineration

There were 1,374 incineration facilities in operation in Japan in 2006 with a total capacity of 195,952 tonnes per day. The problem of dioxin emissions, which drew a lot of attention in the 1990s, has largely been eliminated through technological developments spurred by strict government regulations. While most incineration facilities are small to medium in size and use conventional systems (stocker type or fluidized bed type), there is a trend towards larger waste-to-energy facilities using gasification and melting technology.

The amount of electricity produced by incineration facilities in Japan was estimated at 1,630 MW in 2007 and the government aims to increase this number to 2,500 MW by 2012. The Tokyo Metropolitan area alone generates 239 MW of electric power from 18 incineration facilities. Although the average power generation efficiency of these plants is low at about 10%, newer and larger facilities have reported efficiency rates of over 20%.

Technological advancements continue to enhance the waste-to-energy capabilities of incinerators in Japan. New incinerators have been adapted to burn plastics, which was not possible before due to the damaging high heat and release of harmful gases. Since waste plastics make up a large proportion of municipal incombustible waste (57% for Tokyo in 2005), these new incinerators are very attractive because of the increased capacity to generate electricity and the reduced need for landfill disposal. Japan also has the only two commercial waste-to-energy plasma gasification plants in the world built by Hitachi Metals using a technology from Westinghouse Plasma Corporation.

The Japanese market for incinerators is dominated by three companies - Nippon Steel Engineering, Kobelco Eco-Solutions and JFE Environmental Solutions  which account for more than 80% of sales. Other players in this industry include Ebara, Hitachi Zosen, Ishikawajima-Harima Heavy Industries ( IHI ), Kawasaki Heavy Industries, Mitsubishi Heavy Industries, Mitsui Zosen, Takuma and Tsukishima Kikai.

Recycling

In support of the 3R initiative, a number of laws or private sector programs have been introduced in Japan to promote the recycling of a wide range of products from construction debris to lithium-ion batteries. For MSW , there are three main laws that affect the demand for new recycling technologies.

The Law for Recycling of Specified Kinds of Home Appliances, which came into effect in 2001, requires consumers to pay to have their used refrigerators, air conditioners, televisions and washing machines collected and recycled. These account for about 80% of all appliances produced in Japan . For each one of them, the government set a recycle rate between 50-60%. All manufacturers including electronic giants Fujitsu, Hitachi , Panasonic, Sanyo, Sharp, Sony and Toshiba, cooperate in operating 27 recycling plants across the country. Close to 12 million units were collected in 2006. This law stimulated the development of cutting-edge recycling technologies for e-waste. A good example is the Matsushita (Panasonic) Eco Technology Center , which can recycle 1 million units of appliances per year, and filed 68 patent applications since its opening.

Food waste accounts for approximately 30% of the volume of MSW in Japan. After the Food Waste Recycling Law was enacted in 2001, many innovative projects have been put in operation. The Sapporo Kitchen Garbage Recycle Center transforms 50 tons of food waste collected daily from 188 local schools, hospitals and companies into 10 tonnes of dehydrated cattle feed using a special process developed by Mitsui Zosen. At the Chiba Biogas Center, fuel gas is supplied to a JFE Steel plant by methane fermentation of food waste. More recently, Nippon Steel Engineering built a pilot plant in Kitakyushu Eco-Town capable of producing 400 litres of ethanol per day from 10 tonnes of food waste.

Recognizing that containers and packages represent about 60% of the volume of MSW in Japan, the Container and Packaging Recycling Law was enacted in 1997 to reduce the waste of glass containers, plastic packages and containers, PET bottles and paper cartons, as well as to shift those wastes into recyclable resources. In 2007, 1.4 million tonnes of containers and packages was collected. Local manufacturers of recycling equipment include Fuji Heavy Industries, Hitachi Zosen, IHI , JFE Environmental Solutions and Rasa Industries. Smaller companies have also targeted other products. Pana Chemical, for example, holds 80% of the market for Styrofoam recycling machines.

Landfilling

Landfilling is the choice of last resort in Japan which faces a shortage of suitable sites to bury over 7 million tonnes of MSW annually. In Tokyo and Osaka, Japan’s largest urban areas, landfills on reclaimed land have become the main disposal sites for MSW. In 2006, there were 2,335 final landfill sites across Japan , a decrease of 143 from the previous year. At current rates, the remaining capacity of final landfill sites in Japan is estimated at only 7.7 years.

The Ministry of Environment recently proposed to stop direct dumping of waste into landfills to reduce greenhouse gas (methane) emissions. Landfill gas recovery is not common in Japan since organic wastes are usually disposed of by incineration. 70% of municipal landfills use the Fukuoka method, a semi-aerobic system with leachate treatment facilities and subsurface containment measures.

Growth in this sector appears to be limited as the government promotes more environmentally-friendly ways of disposing of MSW in line with the 3R initiative.

Market and Sector Challenges

Japanese companies exercise considerable market power in the local MSW management sector whether it is for incineration, landfilling or recycling. Despite this strong competition, foreign companies have been able to enter the Japanese market to meet new demands arising from the introduction of stricter environmental regulations. In particular, many German companies ( AGR GmbH, Triniekens GmbH, ALD Vacuum Technologies) have formed joint ventures with Japanese firms to sell their waste recycling technologies.

Although national legislation directs and supervises the regional level of waste management, it is the responsibility of Japanese municipalities to direct waste management locally. Thus local government agencies are influential clients as they call upon the private sector to provide cost-saving solutions for collecting, sorting and discarding the waste.

Because it is very difficult for a foreign company to win a bid for public contracts or to be eligible for government subsidies, it may be easier to approach a Japanese manufacturer or trading company to form a partnership or licence the technology. Most of them are already active in this sector and offer a wide-ranging interface with the Japanese environmental and energy business community through their many subsidiaries.

Few markets in the world are as costly and as time-consuming to enter as the Japanese market. Canadian companies can anticipate high start-up costs associated with modifying equipment, technologies, systems and business practices to conform to Japanese regulations and standards. The requirements for the highest level of quality and service can also be perceived as a challenge. Japanese customers simply will not deal with a supplier who does not have a local office, agent or distributor to respond immediately to technical enquiries.

Patience and relationship building are important elements of doing business in Japan. It is crucial to maintain the relationship with contacts throughout the year and to meet with them as often as possible. Once the relationship is established, Japanese companies are typically loyal to their partners and suppliers.

As for all high-technology sectors, it is strongly recommended that Canadian companies ensure their intellectual property rights are protected before entering the Japanese market. Japan ’s laws protecting intellectual property as well as its record of enforcing these laws is among the best in the world.

Contacts

Canadian Trade Commissioner Service in Japan
E-mail: jpn.commerce@international.gc.ca
Internet: http://www.infoexport.gc.ca/jp