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Japan’sBiomass/WoodPelletsStatus,PolicyandMarketPresentationtotheWPACDelegationMay15,2017Tokyo,Japan

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Table of Contents

• Japan’s National Energy Policy– Energy Mix Target for 2030– Status of Biomass/Wood Pellets– Feed-in-Tariffs (FIT) for Biomass

• Japan Imports of Wood pellets• Projects – Biomass Power Plants• Japanese Companies: activities • Points to remember

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Japan Energy Mix (Data source: METI)

FY2013 FY2030

Renewable energy 12%

Renewable energy 22 to 24%

Geothermal 1.0 to 1.1%

Biomass 3.7 to 4.6%

Nuclear power 1%

Thermal Power 87%

Nuclear power 20-22%

Wind power 1.7%

Solar power 7.0%

(Breakdown)LNG 40%Coal 31%

Petroleum 16%

Thermal Power 56%

Hydroelectric 8.8 to 9.2%

(Breakdown)LNG 27%Coal 26%

Petroleum 3%

10,65 billion kWh

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(as of November 2016) Data Source: METI

Installed Capacity (Started Opeartion)Accreditation

Target by 2030

Type

Before FIT After FITFacilities Capacity

Until July 2012July 2012 - July 2012 -

November 2016 November 2016

Total Total Accreditaiton Capacity

Undressed Timbers 20,000 kw 280,000 kw (34) 430,000 kw (77) 240,000 kw

General Wood/160,000 kw 270,000 kw (18) 3,160,000 kw (115) 2,740,000 -

4,000,000 kwAgricultutural Residue

Construction/ 440,000 kw 10,000 kw (2) 40,000 kw (5) 370,000 kw

Recycle Material Waste

MSW (Municipal Solid Waste),1,680,000 kw 170,000 kw (58) 250,000 kw (89) 1,240,000 kw

Others

Biogas 20,000 kw 30,000 kw (85) 60,000 kw (179) 160,000 kw

TOTAL 2,300,000 kw 760,000 kw (197) 3,940,000 kw (465)6,020,000 -

7,280,000 kw

Status of Biomass Power Introduction

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Feed-in-Tariff (FIT) for BiomassRates and Periods for Biomass Energy Data Source: METI

Energy Type and CapacityRates per 1 kwh

Periods 2016 2017 2018 2019

BiomassMethane fermentation, Gas/biogas 39 yen 39 yen 20 years

Timber from forest thinning

Above 2000 kw 32 yen 32 yen 20 years

Below 2000 kw 40 yen 40 yen 20 years

General WoodAbove 20,000 kw

24 yen

21 yen (Starts on October 1, 2017) 20 years

Below 20,000 kw 24 yen 20 years

General Waste 17 yen 17 yen 20 years

Recycled Wood 13 yen 13 yen 20 years

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Japan Imports of Wood PelletsWood Pellet

Calendar Year: 2015

Year 2015

QUANTITY VALUECOUNTRY (MT) Share (%) (1,000YEN)

TOTAL 232,425 5,520,135

302 CANADA 146,150 62.88 3,490,323

105 CHINA 57,870 24.90 1,461,300

110 VIETNAM 27,440 11.81 541,445

304 USA 237 0.10 12,697

118 INDNSIA 304 0.13 5,203

111 THAILND 194 0.08 3,747

113 MALYSIA 162 0.07 2,808

222 FINLAND 14 0.01 943

231 ROMANIA 25 0.01 741

224 RUSSIA 18 0.01 523

225 AUSTRIA 11 0.005 405

Source: (MOF)

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Japan Imports of Wood PelletsWood Pellet - Calendar Year: 2016

Year 2016

QUANTITY VALUE

COUNTRY (MT) Share (%) (1,000YEN)

TOTAL 346,855 6,854,130

302 CANADA 260,935 75.23 5,446,161

110 VIETNAM 62,441 18.00 902,697 105 CHINA 20,733 5.98 452,161 113 MALYSIA 1,418 0.41 19,209 111 THAILND 451 0.13 6,825 118 INDNSIA 425 0.12 8,397 304 USA 306 0.49 14,243 224 RUSSIA 64 0.02 1,355 236 LATVIA 46 0.01 1,094 238 UKRAINE 21 0.01 789 222 FINLAND 15 0.01 995

207 NETHLDS - - 204

COUNTRYQUANTITY (MT)

Change(%) COUNTRYVALUE (1,000YEN)

Change(%)2015 2016 2015 2016

TOTAL 232,425 346,855 49.23 TOTAL 5,520,135 6,854,130 24.17

302 CANADA 146,150 260,935 78.54 302 CANADA 3,490,323 5,446,161 56.04

Source: (MOF)

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BIOMASS POWER PLANTS TOP 20 (1-10)

Rank Prefecture City Organization(s) Output (KW)

Output (Biomass)

(KW)

Start Time/Plan FIT Memo

1 Fukuoka Toyomae-shi Kyuden Mirai Energy, eREX 74,950 67,455 n/a General

Wood PKS

2 Aichi Handa-shi Summit Energy 75,000 57,000 2016 General Wood PKS, Wood chips

3 Hokkaido Ishikari-shiIshikari New Port New

Energy Power Generation LLC

50,000 50,000 2019 General Wood

4 Yamagata Sakata-shi Summit Energy 50,000 50,000 2018 General Wood

Domestic Pellet, Imported Pellet, Etc

5 Kanagawa Kawasaki Keihin Biomass Power Station 49,000 49,000 2015 General

Wood

Showa Shell, Wood Pellet, PKS

6 Kagoshima Kagoshima-shi IHI 49,000 49,000 2018 General Wood

7 Oita Saiki-shi eREX New Energy 50,000 45,000 2016 General Wood PKS

8 Fukushima Soma-shi ORIX 112,000 35,840 2018 General Wood

9 Hokkaido Monbetsu-shiSumitomo Forestry,

Sumitomo Joint Electric Power

50,000 33,500 2016 Unused material

Pellet, unused materials, PKS, co-firing with coal

10 Aichi Taketoyocho Nakayama Nagoya Kyodo Hatsuden Co.Ltd 110,000 33,000 2016 General

WoodPellet etc: Co-firing with coal

Reference: Biomass Industrial Society Network Sources: METI, press information, organizations' websites(As of March 2016)

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BIOMASS POWER PLANTS TOP 20 (11-20)

Rank Prefecture City Organization(s) Output (KW)

Output (Biomass)

(KW)

Start Time/Plan FIT Memo

11 Fukui Tsuruga-shi Marubeni 37,000 29,600 2017 General Wood

Domestic and imported wood chips

12 Miyagi Ishinomaki-shi Nippon Paper Group, Mitsubishi Corp. 149,000 25,372 2018 General

Wood

Co-firing w/coal and Woody biomass

13 Ibaraki Kitaibaraki-shi Eneres 23,814 23,814 In operation

General Wood

Non-edible palm oil.

14 Kagoshima Satsuma-Sendai-shi Chuetsu Pulp 23,700 23,700 2015 General

Wood

15 Aichi Toyohashi-shi Sala ePower 22,100 22,100 2019 General Wood

Chubu Gas PKS, general wood,etc.

16 Hyogo Tanba-shi Hyogo Pulp 22,100 22,100 Dec. 2017 General Wood

Construction waste, thinnings, lumber scraps, PKS

17 Akita Akita-shi United Corp. 20,500 20,500 2016 General Wood

Waste, unused wood, PKS

18 Hokkaido Ebetsu-shi Oji Green Resources 25,400 20,320 2016 Unused wood Thinnings, etc.

19 Miyazaki Nichinan-shi Oji Green Energy Nichinan 25,400 20,320 2015 Unused

woodUnused wood,etc.

20 Mie Tsu-shi JFE Engineering 20,100 20,100 2016 General Wood Wood chips, PKS

Reference: Biomass Industrial Society Network Sources: METI, press information, organizations' websites

(As of March 2016)

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Japanese companies: activities

Sumitomo Corporation to invest in biomass fuel manufacturing business in Brazil. (2016) Annual capacity: 175,000 tonshttp://www.sumitomocorp.co.jp/english/news/detail/id=29182

Nippon Paper Industries Co., Ltd. and its R&D partner in Thailand will begindemonstrative production of torrefied pellets on a scale of 80,000 tons per yearin 2017. http://www.nipponpapergroup.com/english/news/year/2016/news160427003373.html

Mitsubishi Corporation Power Ltd., a subsidiary of Mitsubishi Corporation, has joined with The Kansai Electric Power Co., Inc. to establish a new joint venture.(2017)http://www.mitsubishicorp.com/jp/en/pr/archive/2017/html/0000032145.html

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Points to remember

• Demand for long-term and stable supply of woody biomass continues.

• Japan relies on supply from overseas.

• Environmental assurance such as sustainability, forest certifications and legality are increasingly important.

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Points to remember

• Industry and government are eager to learn technologies such as torrefaction, black pellets.

• Large companies are looking for opportunities for investments and partnerships with their capital and global network.

AkiraKajita,TradeCommissioner

(Forestry/BuildingProducts)EmbassyofCanada,Tokyo

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