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Japan Saves Money Joining the Green Manufacturing Wave

We at Responsible Alpha have argued large manufacturers, including state national champions like Brazil’s fossil fuel company, Petrobras, can and should play a crucial role in the green-energy transition. Last month, Japan’s industry leader Tokyo Steel announced it will operate in the daytime using solar power, providing another important example of the benefits a renewable power grid brings to a company’s operations.


As Nikkei reports, steel plants typically operate in the cooler nighttime, when energy costs are cheaper and remain idle during the day. But an excess in solar power in the southern Kyushu region has moved the municipal government to offer discounted rates if the companies use excess solar power by operating during the day. Not only does this prevent blackouts caused by imbalances in energy supply and demand, it could reduce daytime energy costs up to 10 percent.


As Japan’s Renewable Energy Institute reports, the steel industry makes up 48 percent of Japan’s industrial admissions and 13 percent of its energy-related carbon emissions. By 2030, Japan will have the opportunity to replace 38 percent of its blast furnace steel plants and phase-in renewable-sourced electric steel infrastructure.


The move to daytime solar operations stands to further increase Japan’s already efficient energy use and is part of a larger strategy involving increased nuclear, ammonia, and hydrogen use. Experts agree Japan needs all of these to reach Net-Zero by 2050 given Japan’s low capacity for storing carbon.


Meeting its 2050 goals will play a central role in the Japanese steel industry’s competitiveness especially as European carmakers and steel companies quickly shift to low-carbon operations.This shift to renewable energy delivers cost savings, more reliable operations, and further opportunities for business growth, all while doing good for the planet.


These are the types of transitions we love to see and help facilitate at Responsible Alpha.


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