"Japan-EU Promote Cooperation on Decarbonized Supply Chains... Reducing Excessive Dependence on China"

Japan is set to agree with the European Union (EU) as early as next month on common standards for support measures and public procurement of goods in the decarbonization sector.

According to a report by Nihon Keizai Shimbun (Nikkei) on the 25th, Japan is promoting the establishment of supply chains with the EU based on these contents. This is a measure to reduce excessive dependence on China. Japan and the EU included in a draft ministerial-level agreement document the promotion of supply chain construction based on common principles of sustainability, transparency, and reliability. The cooperation targets are expected to include a wide range of decarbonization-related products such as electric vehicles, offshore wind power, and semiconductors.

Photo of Fumio Kishida, Prime Minister of Japan.
[Photo by AFP Yonhap News]

Both sides reportedly share concerns that decarbonization subsidies are not being used efficiently to support domestic and regional industries, Nikkei reported. This is due to excessive reliance on low-cost Chinese solar panels. Accordingly, Japan and the EU plan to consider concretizing basic conditions regarding support measures such as decarbonization-related subsidies and public procurement.

The European Commission is conducting an anti-subsidy investigation that could impose countervailing duties on all Chinese-made electric vehicles. It is also investigating extraterritorial subsidy regulations to exclude some Chinese solar panel and wind turbine companies from participating in public tenders.

Nikkei stated, "We will establish fair competition conditions by considering factors beyond price," and added, "We will prevent unfairly cheap products from entering Japan and the EU." It further noted, "(This agreement) also aims for Japan, the United States, and Europe to cooperate in their decarbonization strategies," and "The draft agreement document also includes a policy to promote cooperation with like-minded countries such as the United States."