News Article

Japan move on Plastic Waste following Global angst

Japanese companies turn to paper alternatives and biodegradable plastics

Fueled by more stringent international regulations, Japanese manufacturers rush to take advantage of rising global demand for environmentally sustainable packaging.

Behind the US, Japan is the world’s second-biggest plastic waste producer per capita, and local producers plan to make a move to biodegradable plastics and speciality paper products as an alternative to plastic packaging for single use.

Kenji Fuma, founding and chairman of the consulting firm Neural, advised Japanese companies in risk management and sustainability, said: “many plastic makers have taken countermeasures to curb plastic waste in the last year or so.” In a significant step earlier this month, more than 180 countries signing the Basel Convention, which regulates the movement of hazardous waste, adopted new rules classifying dirty plastics as inadequate for recycling and included them on a list of controlled wastes. In other words, exporting countries will need prior consent from any country that receives their non-recyclable plastic waste products.

To improve its environment, including air quality, China had already moved to ban nearly all imports of foreign plastic waste in 2017. Southeast Asian countries, like Vietnam, Thailand, Malaysia and Indonesia, have been pressured to follow suit by increasing imports of plastic waste.

Another impetus for Japanese companies is the emergence of a new class of global institutional investors which allocate capital in line with strict environmental, social and governance criteria, thus driving the shift in business models.

Shosuke Kiba, Chief Investment Officer at Tokyo-based Universal Materials Incubator, a private investment firm that aims at boosting Japanese technology, said: “Little companies have just opened up to innovation as well as partnerships with other companies or start-ups.” The lack of demand during the past decade led many companies in Japan to pause or even withdraw from developing biodegradable plastics, or even to withdraw them. Kiba said UMI was mainly focused on those startups that demonstrated a long-term commitment to improving the environment.

“Biodegradable materials will from now on be a key topic for major materials and chemical firms,” Kiba said.

Japanese materials manufacturer Kaneka announced earlier this month that it intends to invest 10 billion yen (91 million dollars) to increase the production capacity of biodegradable plastics from 100 times to 100,000 tons a year.

According to Kaneka, demand for biodegradable plastics “increased” as European authorities banned less than 50 microns (0.05 millimetres) of non-biodegradable plastics from 2016.

Mitsubishi Chemical Holdings has also moved its products from general to high-quality products for electric vehicle parts, which require lighter and stronger plastics. “Investment in advanced materials is growing,” said a company spokesman.

The company is also one of the 11 main Japanese chemical and material companies that set up a 6 billion yen (55 million dollars) fund in April to invest in start-ups for material development worldwide. It will have a maximum capital of 10 billion yen and operate in conjunction with UMI.

The fund is supported by Japan’s leading chemical and materials companies such as Sumitomo Chemical, Shin-Etsu Chemical and Idemitsu Kosan. “We can secure a certain amount of money by standing together to advance the development of advanced materials,” a spokesperson for Mitsubishi Chemical said.

Some restaurants and retailers have also started to curb plastic use. Seven&I Holdings, parent of the Seven-Eleven Store Chain, has revealed plans to switch from plastic to paper bags by 2030. This month. Royal Holdings and Global Dining, a food and hospitality provider, have also announced plans to stop using plastic straws in their restaurants.

Fukusuke Kogyo, Japan’s largest supplier for plastic food bags, is ready to cut demand, as consumers are expected to pay for plastic bags quickly. “Demand will drop to 1 third or one quarter,” a spokesperson for the company told the Nikkei Asian Review.

While Fukusuke Kogyo has tried to reduce production costs in traditional plastic bags, investment in the development of advanced materials has also increased, with reduced environmental impacts.

“We want the production of biodegradable plastic films, currently under development, to meet the needs of society as soon as possible,” said the company spokesperson.

Nippon Paper also hopes that it will capitalise on falling plastics demand by expanding sales abroad of “paper-based barrier materials,” which protect products from water and air. In Finland, the company plans to begin production in the year.

Nippon Paper says it had seriously started investing in advanced equipment around seven years ago in the fight against decreasing demand for newspapers and other paper stock.

At that time, the company said that few customers were looking for paper-based materials as a substitute for more economical plastics. More customers express interest now. But 70 per cent of total sales are still made of paper and paperboard.

“Our efforts have matched global trends,” said a spokesman for Nippon Paper.

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