Japan: A Mature Waste Market – with Opportunities

Japan has always lived with natural resource scarcity due to geological and geographical limits. Meanwhile the idea of the circular economy is well embedded in Japanese education, culture, and legislation. As the Minister of Environment underlined, Japan has a solid system for waste management and recycling. Some call it the best – the plastic recycling rate is about twice that of the UK –,  some call it the most complicated, as in the town of Kamikatsu the people must separate their waste in 34 different bins. But Japan‘s waste management is developing. And offers restrained opportunities for foreign know-how and investment.

Likewise Europe, Japan has come to the conclusion that exploiting waste as a profitable resource instead of a costly burden, by creating a circular economy, would be a good way to resolve simultaneously several challenges. Numerous policies and laws implemented – since the 1970s – have advanced the circular economy in Japan, but the greatest progress in legislation took place since 2000. The Law for the Promotion of Efficient Utilization of Resources was ratified in the year 2000 to minimize waste by producers and consumers alike. The Construction Recycling Act was enacted in 2000 as well as the Food Recycling Act. The Law on Re-utilization of End of Life Automobiles came into force in 2002. The Home Appliance Recycling Act from 1998 was upgraded by the Small Home Appliance Recycling Act enacted in 2012.  By now, the third Fundamental Plan has been set in 2013 aiming at promoting recycling, but also reinforcing reduce and reuse, focussing on the recovery of useful metals and forcing initiatives for security and safety as well as international cooperation for 3R initiatives. The plan mentions the importance on the view point of LCA. Besides that, the  Extended Producer Responsibility (EPR) principle exists as a concept. The World Economic Forum balanced in 2013: “This will doubtlessly ensure that Japan continues to be one of leading nations in this field.“

98.6 percent waste reduction rate

According to latest data of the EU-Japan Centre for Industrial Cooperation, the total waste emissions reached 44,870,000 tons in fiscal year 2013 representing a daily waste emission of 958 grams per person. In that year, the waste reduction rate lay at 98.6 percent. With approximately 80 percent, incineration is the most widely used method for treating waste in Japan, because of size reduction, respondance to the limited landfill sites and the hygienic standard. In 2013, the number of waste incineration plants reached 1,172, but began to decline while the capacity per plant rose marginally: 28.0 percent of all plants were equipped with power generation facilities, and the total power generating capacity increased. The direct landfill disposal rate was 4,540,000 tons respectively 1.4 percent. As of spring 2014, the available capacity amounted to 107,410,000 cubic meters. Given the same amount in the future,  this  corresponds to 19.3 remaining sustainable years.

A recycling rate of 20.6 percent

A total of 9,270,000 tons of waste have been recycled resulting in a recycling rate of 20.6 percent of total waste in fiscal year 2012. Japan’s recycling rate for metal is said to be 98 percent and partly as high for other materials. Of 312,950 tons used beverage cans in fiscal year 2014, 273,491 tons were recycled or reused, achieving a recycling ratio of 87.4 percent; the can-to-can recycling rate lays at 63.4 percent. The decreasing rate in recent years can be explained by an increase of scrap export. The majority of electronic appliances/electrical products are recycled, and up to 89 percent of the materials they contain are recovered. It is estimated that over 50 percent or even more of the targeted waste home appliances are collected and recycled compliant to legislation. However, around one third is exported to foreign and mainly developing countries as used items, scrap or resources.


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The yearly disposal of waste plastics in Japan is roughly estimated at ten million tons/year assembling from 4,540,000 tons of domestic (general) plastic waste and 4,860,000 tons of industrial plastic waste. In 2014, 50.6 percent of the 669,620 tons of plastic recycled through the Japan Containers And Packaging Recycling Association has been material recycled. But according to the Plastic Waste Management Institut, in 2011 out of 9,520 tons of plastic waste totally 2,120 tons were mechanically recycled and 4,960 tons were thermally treated.

Industry waste recycling stable at 52 percent

As the Handbook on Resource Recycling Legislation and Trends in 3R points out, Japan’s industrial waste amounted to 381.206.000 tons in 2011. Two thirds of that waste result from the electricity, gas, heat and water sector (25 percent), agriculture and forestry (22 percent), construction (20 percent) and paper (eight percent). The total quantity of industrial waste discharged in Japan has been slowly decreasing in recent years. The recycled amount remains stable at 52 percent, while intermediate treatment include processes such as sorting, crashing, dewatering and incineration. The several responsibilities for waste are delegated to the national government and the prefectures. The municipalities are in charge of the collection, treatment and disposal of municipal solid waste within areas under their jurisdiction, while waste generating business operators are responsible for the managing of industrial waste generated from their corporate activities.

23,045 waste disposal businesses

In 2009, the Japan External Trade Organization reported a total of 23,045 establishments of industrial and general waste disposal businesses throughout Japan, 59.4 percent of the establishments with less than ten employees. Regarding the recycling of packaging waste from households, the Japan Containers and Packaging Recycling Association in 2014 listed 53 companies active in the recycling of glass bottles, 45 for paper, 54 for plastic, 52 for PET bottles and some companies recycling several waste types. The number of contracting business entities for glas bottle recycling was 3,235, of PET bottles 1,292, of paper 60,598 and of plastics 76,388 contributing to a taking-back volume of 1,433,134 tons. The numbers of contracted municipalities added to 1,247, 1,202, 148 and 1,081 with a taking-back volume of 1,176,585 tons. Recycled glas bottles reached a sales volume of 317,165 tons, PET bottles of 158,296 tons, paper of 24,702 tons and plastics of 393,740 tons. Most of the material succeeds in a sales rate of 100 percent.

The five largest corporations represent more than half of the non-metal waste management industry. Regarding the recycling of metal waste and scrap, the main players in 2010 were Asahi Holdings Inc. (19.4 percent production share), Hanwa Co. Ltd (11.7 percent), Mitsui Mining & Smelting Co. Ltd (10.2 percent), Dowa Holdings Co. Ltd (6.4 percent) and Matec Inc. (2.6 percent).

The 3.11 earthquake and Fukushima

It must not be forgotten that the land was struck by “The Great East Japan Earthquake“, also called “3.11 earthquake“. The earthquake off the Pacific coast of Tōhoku was followed by a tsunami and the destruction of the Fukushima power station on 11th of March 2011. It caused enormous, widespread damage primarily along the Pacific coast in the Tohoku region. Four years later, the Minister of the Environment Yoshio Mochiduki stated: “We have focused our efforts on issues including decontamination, treatment of designated waste and disaster waste, and the establishment of interim storage facilities for contaminated waste.“

By numbers, as of the end of March 2015 the government estimated that there were approximately 802,000 tons of disaster-related waste in a region encompassing eleven municipalities within Fukushima Prefecture. Until February 2015, approximately 54 percent of that waste, or 430,000 tons, was being stored at temporary storage sites. At the end of December 2014, approximately 157,000 tons of waste have been declared “designated waste,” including incinerator ash and sewage sludge, rice straw, and compost. “Currently, this waste is being temporarily stored at waste incineration and sewage treatment facilities in accordance with established guidelines,“ the annual Report on the Environment 2015 showed. Within Fukushima Prefecture, waste under 100,000 bq/kg was scheduled to be stored at the existing managed waste disposal site in Tomioka, while waste exceeding 100,000 becquerel per kilogram will be taken to an interim storage facility.

According to the annual report, significant progress has been made, with more than 80 percent of the planned decontamination work both in and outside of Fukushima Prefecture completed. The rest of the scheduled decontamination work is also nearing completion. More than 70 percent of the planned decontamination work for houses, farmlands, pastures, and roads both in and outside of Fukushima Prefecture has been commissioned, and decontamination efforts are steadily moving forward. The revised Japan Environmental Safety Corporation Law prescribes the government’s responsibility with regards to the Interim Storage Facility for soil and wastes generated from decontamination work in Fukushima Prefecture. And it  stipulates that the government will take the necessary measures to complete final disposal of the waste outside of Fukushima Prefecture within 30 years from the commencement of interim storage.

Several opportunities for foreign know-how

The third Fundamental Plan for Establishing a Sound Material-Cycle Society (2013) estimated the size of the market related to sound material-cycle society at approximately 39 trillion yen with approximately 990,000 people employed. The plan identifies various issues that Japan is currently facing, sets priorities and recommends measures to implement. According to the EU-Japan Centre for Industrial Cooperation, this opens potential business opportunities for EU companies too – under certain circumstances.

As the Plan remarks, new measures should be taken to foster the reduction of waste and reuse of products in order to decrease the overall quantity of waste, thereby lessening the need for “recycling” – an opportunity for businesses that can provide products or services related to these two Rs.

  • Current recycling processes often result in a deterioration of the material quality and still high costs. Efficient and reasonably priced recycling processes could enjoy a competitive advantage.
  •  The energy situation following Great East Japan Earthquake required generating energy from waste including biomass is perceived as necessary, with subsequent business opportunities for biomass and waste-to-energy or other incineration businesses including technology transfer.
  • In the aftermath of the Earthquake, the disposal of radioactive substance contaminated waste and other toxic waste such as PCB waste or asbestos waste still require a specific know-how by specialized companies.
  • Various New Town programs incentivising more sustainabilty give a chance to companies to implement innovative processes and technologies. The small scale of local recycling zones seems particularly adapted to SMEs.
  • To tackle the issue of illegal dumping and/or inappropriate treatment, the government pleads for a reinforcement of the “responsibility of waste generator”, including preventive and punitive measures. Wanted: Re-organisation including a reduction of the number of facilities and the development of final disposal sites.
  • The Plan provides Japan to promote the 3Rs in the Asia Pacific region. But US and European waste management and recycling industries appear to be more advanced in overseas operations.
  • Although a large number of facilities across the country do not cause need for additional capacity, there might be some demand for repair works and/or partial replacements to extend the life of existing facilities or to improve the technology.
  • Incineration is the most widely spread disposal method and landfill shortage is among the main concerns. In that context, the stopping of slag poses serious concerns. Solutions for an effective use of bottom ash would be welcomed.

 

Photo: Radzian /  Dreamstime.com

Photo: Radzian /
Dreamstime.com

There are several waste streams with business opportunities to be mentioned. As bio-products will become more popular, this will open chances in the field of biomass, anaerobic digestion – especially separation technologies for anaerobic digestion system – and organic fertilizer.

556,000 tons of e-waste were collected and treated in 2013, but reports estimate that only 24 to 30 percent of e-waste are treated in Japan. The treatment of large volume stocks of PCB wastes is too highly desirable: Although the Japan Environmental Storage & Safety Corporation is the only authorized entity for the treatment of pure PCB wastes, private companies can obtain a certification to handle low-concentrated PCB waste.

Japan has to face increasing volumes of marine litter as a consequence of the 2011 tsunami consisting of waste washed up on the beaches and million cubic meters of tires from  artificial reefs.

No promenade

But accessing the Japanese waste market is no promenade. The market is tough and competitive with strong domestic players who already have the indispensable network and references. The decision making process is particularly long and several meetings are necessary to reach an agreement. Japanese tend to favor national products and manufacturers. Japanese are loyal to their existing business partners. And if the foreign technology is not at least 40 percent better than the domestic is, Japanese will buy national. Japan usually expects free maintenance and after-sale service. The prejudice exists that the domestic market is just so different from the European one that foreign technologies or practices cannot possibly match with the Japanese demand. As contracts on public facilities are subject to public tenders, the resulting administrative structure and responsibilities sharing between national, prefectural and local government might appear unclear and complex to foreigners.

Still in evolution – but whereto?

The Japanes waste market is not wide open, but offers opportunities and possibilities. In the words of the EU-Japan Centre for Industrial Cooperation, “the Japanese waste market is a mature market but it is still in evolution due to environmental, economic, social, and political circumstances, domestically, and around the world. Resource scarcity and energy dependence call for a circular economy, further exploiting waste as a resource. The overall reduction of waste generation is also one of the main objectives.“

However, it cannot be excluded that Japan will medium- or long-term focus on Asian partners. The so called “3R Initiative“ contains a variety of initiatives developed to establish sound material-cycle societies in Asia, including adopting the Hanoi 3R Declaration at the fourth conference of the Regional 3R forum in Asia held in March 2013. As part of Japan`s efforts to contribute to reducing global environmental impact, the country will “continue to promote international cooperation between multiple countries through the Regional 3R forum in Asia and the Pacific“. And likewise the above mentioned, pivotal 3rd Fundamental Plan for Establishing a Sound Material-Cycle Society underlines: “Developing nations, mainly in Asia, as seen in Japan during its high economic growth period, are facing serious problems related to the rapid increase in waste generation. We need to share with these countries the wealth of experience and knowledge we possess on waste related issues and recycling, in order to take the lead in contributing to the establishment of a sound material-cycle society on a global scale.“

Photo: mantinov / fotolia.com

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