Japan and EU Forge Alliance for Decarbonization: Green Procurement Rules Set to Counter Chinese Dominance
Key Ideas
  • Japan and the European Union are expected to agree on common rules for procurement in decarbonization sectors, prioritizing factors beyond price like environmental impact and human rights.
  • The agreement aims to reduce dependence on specific countries, particularly China, in critical sectors such as solar, wind, and hydrogen, to enhance economic security.
  • A joint statement expressing concerns about 'weaponized economic dependencies' is anticipated, with an emphasis on countering unfair governmental subsidies, ensuring independence, safety, and environmental considerations.
  • Additionally, a joint roadmap for hydrogen utilization by 2040 is likely to be established, aligning with the effort to promote fair competition and reduce reliance on China for strategic goods and key technologies.
Japan and the European Union are collaborating to establish common rules for procurement in decarbonization sectors, including wind, solar, and hydrogen. The anticipated agreement will introduce criteria beyond pricing, emphasizing environmental impact and human rights considerations for products like solar panels. This initiative aims to reduce overreliance on specific countries, particularly China, due to economic security concerns. The rules will address issues like unfair governmental subsidies, country independence, safety standards, and environmental and human rights aspects. The partnership also plans to present these rules at the Group of Seven summit with the goal of shaping them into international standards. The focus is on countering 'weaponized economic dependencies' where certain countries create dependencies through market-distorting subsidies. To further strengthen their collaboration, Japan and the EU are expected to form a working group to delve into details beyond the initial sectors, extending discussions to include semiconductors and electric vehicles. The growing dominance of Chinese products in the decarbonization sector, facilitated by substantial governmental subsidies, has raised concerns in Europe. The commission in Europe is investigating these subsidies in various sectors such as EVs, solar panels, and wind power. With the impending U.S. presidential election, the U.S. has intensified its opposition towards China, while Japan and Europe are placing emphasis on fostering fair competition and reducing dependence on China for critical goods and technologies. A joint hydrogen utilization roadmap is also on the agenda to be formulated by Japan and the EU, aiming for international adoption by 2040.
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