Biweekly Update: News on Japan & the Netherlands – Week 5 & 6, 2022
This newsletter was shared with Dujat members on 15-2-2022. The next newsletter was sent out today.
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Update on Japan
New coronavirus infections are declining in many parts of Japan, but serious cases are increasing nationwide. The Tokyo Metropolitan Government on Monday reported 10,334 new cases, for a 6th straight day of week-on-week decline.
Seriously ill patients on ventilators or ECMO heart-lung machines in the capital rose by 9 from Sunday to 74. The number of cases deemed serious nationwide was nearly 1,400 on Monday, the most this year, amid high hospital occupancy rates.
On Wednesday 9 February Prime Minister Fumio Kishida announced plans to keep COVID-19 restrictions for Tokyo and 12 other prefectures for three more weeks until early March, as omicron infections show little signs of slowing and most Japanese still lack booster shots.
The measures covering Tokyo, Saitama, Chiba, Kanagawa, Gunma, Niigata, Gifu, Aichi, Mie, Kagawa, Nagasaki, Kumamoto and Miyazaki prefectures, were initially scheduled to end Sunday but will remain until 6 March, Kishida said.
Kishida’s decision follows requests from governors in the affected areas, where daily cases were beginning to overwhelm hospitals with more serious ones among elderly people. There are also staff shortages among medical workers who are either infected or close contacts of those who test positive.
The measures are a less stringent version of a state of emergency and have been expanded and extended since January. They include shorter working hours for eateries in exchange for government subsidies and restrictions on large public events.
Japan has resisted the use of lockdowns as the government seeks to minimize damage to the economy. Even so, Japanese are increasingly becoming less cooperative in social distancing and other restrictions.
Kishida has faced criticism for the delayed and slow booster rollouts, which only started in December with medical workers. So far, only 7.2% of the population have received their jabs.
Last week, Kishida pledged to accelerate booster shots to as many as 1 million jabs a day by the end of February, but critics say the momentum would be lost by the time the vaccination rates rise to effective levels.
The booster drive was delayed because the government was slow in deciding to cut the eight-month interval between the first two shots and a third, even though it was possible for local municipalities with excess vaccines to start administrating boosters early.
Japan will ease a near-ban on foreign arrivals this month, gradually allowing in more business travelers and students, Nikkei has learned, as frustration mounts with stringent curbs that have kept people out of the country for as much as two years.
The tougher border controls implemented in late November in response to the omicron coronavirus variant are now set to end March 1 after multiple extensions. Prior to that, the government plans to start accepting more than 1,000 people a day, and gradually raise the cap to several thousand.
Schools and companies will be expected to supervise travelers coming in under their sponsorship, and visitors will be asked to self-isolate after entering the country.
The looser restrictions on business travelers will apply to both short-term business trips and long-term relocation. The government will prioritize researchers and engineers, as well as workers who provide a “public benefit.”
Japan had previously begun allowing a handful of government-sponsored foreign students into the country. This broader reopening will give priority to students who cannot graduate without in-person classes in Japan.
Cutting quarantine periods to three days or less from seven days is under consideration. To qualify, travelers, both Japanese and foreign nationals, will have to have received a vaccine booster and have been tested for COVID-19. The government plans to simplify the required paperwork and the screening process. A decision will be made as early as next week based on how coronavirus cases are trending.
Prime Minister Fumio Kishida on Saturday told reporters that he “would like to move ahead on considering the easing of the restrictions.”
Under the current rules, foreign nationals without permanent residency can, as a rule, enter Japan only for humanitarian or “public benefit” reasons. Foreign travelers coming into the country plunged to an average of 767 per day in December, according to the Immigration Services Agency.
The entry cap on arrivals, currently set at about 3,500 people, will rise when the curbs are lifted March 1. The limit was 5,000 before the controls were put in place in November. Too low a cap could spur further criticism.
Japan’s campaign to cut greenhouse gas emissions is extending to the skies, as the government aims to have airlines replace 10% of their jet fuel with eco-friendlier alternatives by 2030.
Sustainable aviation fuels, or SAFs, are made from waste, biomass or scrap material. While they generate 70% to 90% less carbon dioxide than conventional jet fuel, they can cost up to 10 times as much to produce. The government plans to set up a public-private committee this year to consider specific measures to encourage Japanese companies to make and use these fuels.
Domestic production is expected to be key to the government’s strategy. Importing SAFs would generate carbon dioxide emissions during transportation, cutting into the benefit of switching to a greener fuel, and the possibility of surging prices presents an increased economic security risk as well.
Efforts to this end are already underway in the private sector. Engineering company JGC Holdings and oil wholesaler Cosmo Oil plan to start up Japan’s first commercial SAF production facility in 2025, making up to 30,000 kiloliters of fuel a year.
IHI and Electric Power Development, better known as J-Power, are working on making SAF from microalgae, aiming to bring it to market around 2030. JERA, a 50-50 joint venture between Tokyo Electric Power Co. Holdings and Chubu Electric Power, has partnered with Mitsubishi Power and Toyo Engineering on a plan to turn woody biomass into fuel.
Airlines used a total of 63,000 kl of SAFs worldwide in 2020, equivalent to less than 1% of all jet fuel consumed that year. Supply in Japan, where production is still only in the trial stages, came to only about 300 liters in 2021.
The Japan Transport and Tourism Research Institute estimates that Japan could theoretically produce between 7.06 million kl and 13.13 million kl of SAFs per year by 2030, depending on whether materials such as biomass are repurposed for this instead of electricity production.
A blend of carbon dioxide and hydrogen would make up the largest share of supply, at about 40%, while municipal and industrial waste are together seen accounting for 32%.
Realistically, taking into account the impact of government policies, JTTRI predicts actual supply in 2030 coming to at most 1.34 million kl. That would be just enough to reach the target of replacing 10% of Japanese airlines’ jet fuel by that year.
The government’s planned committee, with representatives from the transport and industry ministries as well as airlines and fuel companies, will look to clarify the challenges involved.
The European Union has been a trailblazer in the field. A package of measures to combat climate change announced last July includes a proposal that would require suppliers to provide and aircraft operators to use sustainable fuels. Norway and Sweden have already introduced SAF quotas.
Subsidies and tax breaks may be key to encouraging suppliers and airlines to make the switch. U.S. President Joe Biden’s administration proposed an SAF tax credit last year. “All policy tools need to be used to maximize domestic SAF production capability,” JTTRI said.
As consumers pay closer attention to climate change-related policies, airlines are facing greater scrutiny, given the industry’s high emissions. Air France-KLM in January began adding an SAF surcharge to tickets, while also giving passengers the option to pay for additional sustainable fuel.
Mitsubishi UFJ Trust hopes to bring about instant settlement of securities transactions by using blockchain for trading and a cryptocurrency for payment, Nikkei has learned.
The new digital currency to be issued by the Japanese bank is a kind of stablecoin tied to the value of Japanese yen. This cryptocurrency will allow the bank to streamline and accelerate its settlement process, given that it will be instantaneous.
Banks are expected to be allowed to issue stablecoin in Japan under a revised law due to take effect in the spring next year.
Settlement of securities transactions by regular currency takes a couple of days now and costs tens of millions of dollars a year in Japan. The use of stablecoin is expected to eliminate such costs.
It is also hoped that the initiative will spur the use of blockchain technology in securities trading. The Japanese trust bank has been promoting the use of blockchain-based securities in partnership with SBI and Daiwa Securities.
Digital securities allows investment in a more flexible format. For instance, blockchain technology has turned relatively illiquid assets such as corporate bonds and real estate into products that can be purchased in small quantities, opening the way for retail investment.
The market for digital securities in the U.S. has already reached around $100 billion.
Update on the Netherlands
The cabinet has decided to let go of almost all corona rules. First there will be another week of slowly easing and then most restrictions will go overboard. This was announced by Health Minister Ernst Kuipers in his press conference on the evening of Tuesday 15 February. An overview of the relaxations.
– Work from home advice is being relaxed. The advice is now to work from home if possible, and those who nevertheless have to go to their workplace, no more than half the time.
– The advice to receive a maximum of four guests a day at home has been cancelled. Everyone can receive unlimited visitors at home again.
As of 18 February
– The catering and cultural sector can keep their doors open from Friday 18 February until 1 a.m. This applies to cafes and restaurants, but also to football stadiums and theaters, for example.
– The corona pass (QR-code) will remain for a while. In places where a corona pass is required, such as in a cinema or stadium, visitors no longer have to keep 1.5 meters away.
– The mask obligation is disappearing in many public places. At locations for a maximum of five hundred people, the fixed seat also expires. At locations with more than five hundred visitors, a fixed seat and a mask is mandatory.
– The football stadiums can be full again. The public must show a corona pass, wear a mask and a seat is mandatory in the stands.
– After a positive test, you only have to stay at home in isolation for five more days. You must then be free of complaints for at least 24 hours to be allowed to leave the house again.
As of 25 February
– The corona pass is no longer necessary. You still need the corona pass with QR code for many trips (by plane) abroad.
– The earlier closing times in the catering and culture sectors are cancelled. The pub, theater and cinema can determine themselves until what time they are open.
– The 1.5 meter distance rule disappears. It is no longer necessary to keep a distance of one and a half meters.
– The face mask obligation expires, except on the plane and in public transport.
– 1G will apply for large indoor events with many visitors. These are then only accessible after a negative test result. It concerns indoor festivals and other events with more than 500 visitors. In a football stadium, for example, corona restrictions no longer apply. It also does not apply to transfer locations such as conferences and trade fairs.
– Basic rules, such as staying home in case of complaints, washing hands, coughing in the elbow and ventilating areas will remain in force. This also applies to tests and staying at home in case of corona complaints.
The Dutch economy has grown at an enormous rate in the past year. The growth is 4.8%, according to preliminary figures from the Central Bureau of Statistics (CBS). The last time growth was this big was in 1998. The spurt has everything to do with the fact that the economy has bounced back after the enormous corona blow that occurred in 2020.
According to Statistics Netherlands, the growth is mainly the result of increased trade and household consumption. Government investment and consumption were also higher than last year.
With these figures, the large contraction of 2020 – 3.8% – has been made up for in one year. At the same time, this does not apply to consumer spending, which has increased, but has not yet surpassed the corona crisis. Statistics Netherlands notes that spending in 2021 was still more than 3% lower than in 2019 – ie before the corona crisis broke out.
The last three months of the year were characterized by increasingly tightened corona measures. Where there was no longer a mandatory one and a half meters in October, the ‘evening lockdown’ came in November and another hard lockdown in mid-December. Despite this, the economy did grow, but at a slower pace than in the preceding quarters. The growth was 0.9%.
Despite strong economic growth compared to last year, not every industry has recovered from the corona crisis. For example, the recovery of the catering industry last year did not outweigh the blows that the sector received. The added value for the economy was 30% lower than in 2019. The added value of the trade, transport and hospitality sectors was 7.6% higher than in 2020.
It has become even more difficult for employers to find staff in a number of sectors: in the fourth quarter of 2021 (October, November, December) the number of vacancies grew to a record high. This further increased the tension in the labor market, Statistics Netherlands reported.
At the end of December, there were 387,000 unfilled vacancies, which equates to 105 vacancies per 100 unemployed. In the previous quarter, there were 372,000 unfilled vacancies, or 93 per 100 unemployed.
“The increasing shortage remains striking,” says Peter Hein van Mulligen, chief economist at CBS. “More than 70% of the Dutch population between 15 and 75 years is currently in paid work. That has never been this high and it is higher every month. We will have to get used to it.”
As in previous quarters, most vacancies were in trade, business services and care. Business services include consultancy, cleaning and security.
There were also industries where the number of vacancies decreased. This happened, for example, in the catering industry, culture and recreation. According to CBS, this decrease is due to the lockdown that was announced in the last weeks of December. At the same time, the record for the number of vacancies that had been filled was also broken: 26,000 more than in the third quarter.
In the last quarter, the number of people with both a permanent and a flexible contract increased.
The number of employees with a permanent contract increased by 34,000 to 5.3 million, the highest number since 2013. These are people with an employment contract that is not for a limited period and who are employed for a fixed agreed number of hours.
According to Van Mulligen, the shortage is clearly visible here: “Corona has hardly had any effect on permanent contracts. The number of people with permanent jobs has been growing for some time. It can be a strategy of employers to bind people to them, if more pay is not an option. The risk is now limited for them too.”
In the last months of 2021, the number of employees with a flexible employment relationship also increased, by about 38,000 compared to the previous quarter. This concerns people with a fixed-term employment contract or a flexible number of hours per week.
At the end of December 2021, there were 370,000 unemployed in the Netherlands; compared to the previous quarter, there are 29,000 fewer. That number has not been this low since 2003. At the end of December, for example, there were roughly as many unemployed young people as just before the corona crisis.
“You saw a big squeeze in employment in jobs that young people usually have,” says Van Mulligen. “Sectors such as the catering industry have recovered. At the same time, many young people have switched jobs due to the pandemic. The question is whether they will quickly return to their old side job.”
Schools in the Netherlands are in trouble because of rising energy prices, says the PO Council, which stands up for school boards in primary education. The council warns that the quality of education could be jeopardized by higher energy bills.
The PO Council therefore hopes that the government will come up with more budget to be able to pay the rising energy prices. 44% of school boards are already dealing with an increase in energy prices, according to a survey by the organization in which 235 school boards took part. The rest of the schools will feel the effects of the increases later; they had locked in the price for a longer period of time.
The extra ventilation due to corona also entails costs; As a result, three quarters of schools now use more energy. The council estimates that school boards will soon be spending 50 to 70% more money on energy; the higher energy costs would force schools to cut back in other areas.
Typically, schools spend roughly 80% of their budget on staff and 20% on material costs, including furniture, teaching materials and energy bills. The PO Council fears that staff will eventually have to be cut back, which means that fewer teachers can be hired. “And that has consequences for the education of students and the quality of education.”
The magnitude of the problems varies from school to school. The council says a large number of school buildings are now obsolete; 31% have energy label G.
The educational umbrella organization hopes that the costs for intangible matters, such as energy prices, will be adjusted quickly. Those budgets are reviewed every five years; the last time was in 2017. When it turned out that in the period 2010 to 2014 school boards spent 35% more on costs than they were funded for. “And the material costs have only increased since then.”
Update on Dujat & Members
DUJAT and N.V. NOM, the Investment and Development Agency for the Northern Netherlands, cordially invite you to attend our upcoming Hydrogen & Chemistry Event on Thursday, March 3rd, 2022 in the province of Groningen.
We have very few seats left, so if you are interested, please make sure to register as soon as possible (link to event site).
Yakult Europe starts from 2022 onwards a three-year partnership with Treedom, a global web platform to promote the planting of trees and forests worldwide with the aim of making the planet greener. Within the next three years 10.000 trees will be planted. Contributing to biodiversity and reforestation and at the same time offering social and economic opportunities for local communities fits Yakult’s mission and environmental vision.
Hiroyasu Matsubara, Managing Director of Yakult Europe: “Our mission is to contribute to the health and happiness of people around the world. For people to be healthy, everything around them must also be healthy. By growing our Yakult Forest, we contribute to biodiversity and reforestation to combat climate change, and the social program of Treedom ensures food security, empowerment and revenue for the people who take care of the trees.”
If your company has any news to share in the next biweekly newsletter, let us know by sending an e-mail to firstname.lastname@example.org.
Jinn van Gastel
Project Manager at Dujat
DUJAT (Dutch and Japanese Trade Federation)
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