[Feature: Toward a Circular Economy and Society] Roundtable: How to Create a Circular Society Beyond Recycling

A "circular society" has long been one of the pillars of Japan's environmental policy, but in recent years, the issue of plastics has attracted significant attention, and public interest is rising. Furthermore, the "Act on Promotion of Resource Circulation for Plastics" has been in effect since April of this year.

Today, many stakeholders have set the SDGs as their goals. Regarding "circulation," this not only aligns with Goal 12, "Responsible Consumption and Production," but since the plastic problem became prominent, it has also become related to Goal 14, "Life Below Water," making it an increasingly important theme.

Today, I would like to ask everyone to talk about how you perceive the current situation, what challenges exist, and what the future outlook is for further advancing a circular society.

First, Mr. Tsukahara, who has been involved in environmental policy at the Ministry of the Environment, could you tell us about the philosophy under which Japan's resource circulation policy has operated?

During the period of high economic growth starting in the mid-1950s, waste surged along with increased consumption, and industrial waste, including difficult-to-treat materials, also increased. At that time, I believe the Ministry of the Environment's policy was largely focused on measures against improper disposal.

In other words, it was about how to regulate those who tried to dispose of waste cheaply and poorly through illegal dumping. While there is much talk about recycling policies now, we started with the crackdown on improper acts, and I believe the philosophy based on that thinking is reflected in the Waste Management Law (enacted in 1970).

The turning point was when the generation of dioxins (substances suspected of being carcinogenic to humans) from incineration sites surfaced as a social problem in the late 1990s. For the Environment Agency at the time, the dioxin issue was a major shock, and we had to compile impact assessments and establish regulations (standards for water and air, structure of incineration facilities, maintenance standards, etc.) in a short period. In the midst of that struggle, the conversation shifted to the idea that we must reduce waste rather than burn it in the first place. This led to the explicit statement in the Basic Act on Establishing a Sound Material-Cycle Society (enacted in 2000) that the 3Rs (Reduce, Reuse, Recycle) take priority over disposal.

First, Reduce (reducing waste) and Reuse (reusing items) are important, followed by Recycle. This awareness began to spread. The word "Mottainai" gained attention, education in elementary schools and elsewhere was implemented, and waste separation at home became extremely detailed compared to other countries. Many recycling laws for specific items, such as automobiles and home appliances, also emerged.

The Plastic Resource Circulation Act, which is currently a hot topic, is quite different from the approach of individual recycling laws. First, the biggest point is that it focuses on the material. Another major difference is that it looks at the entire life cycle, from the product design stage to the disposal stage. A key feature is that it brings everything that uses plastic into the scope of control and targets various players.

In this way, I see that a resource policy approach focusing on materials will likely become mainstream. However, used products are discharged in a state where parts with resource value and parts to be treated as waste are mixed. Extracting resources from them requires technology and incurs costs, and in some cases, recycling lacks economic rationality.

However, if we rely entirely on foreign countries for processing, ecosystem-like elements such as proper processing and recycling technologies will flow out along with the resources, potentially collapsing the foundation for maintaining processing technology domestically.

I was in charge of the Basel Convention, which regulates the import and export of hazardous waste, at the Ministry of the Environment. Mixed metal scrap and plastic mixtures (miscellaneous scrap) were being exported from Japan overseas and traded for value, but resources were flowing out, and there were problems with pollution and health damage caused by improper recycling and processing in developing countries.

At that time, what I felt had a major impact on the flow of resources was resource prices. As resource prices fluctuated, sometimes resulting in "reverse charging" (a state where the cost at hand becomes negative in waste treatment transactions) and sometimes becoming valuable, the direction of preventing environmental pollution and encouraging resource circulation did not mesh well with existing laws, which was a very significant challenge.

Ultimately, we responded through legal amendments so that miscellaneous scrap could be regulated even if it had value, but I am strongly aware that the economy governing businesses involved in waste treatment and recycling fundamentally has such issues.

The dioxin issue, which was a turning point, occurred around 2000. Since the Kyoto Protocol was also adopted in 1997, I believe the era of the environment in Japan likely began around that time.

Mr. Shimamura, you have developed various businesses at a material manufacturer for a long time. What is your perspective on the business community's awareness of resource circulation?

Historically, when petrochemicals became a boom and plastics entered the world, the throwaway economy likely spread rapidly due to the convenience of consumption as they became commoditized. In other words, the basic idea was to lower costs by producing in large quantities, making profits by producing more and more in a one-way fashion. This was exactly the basic thinking in Japan before the oil shock.

At the same time, since Japan is a country with few resources, it created a basic economic structure of earning foreign currency by importing resources from overseas, processing them, and exporting them. In that process, while overseas companies are often very large and a single company owns chemical plants and complexes, in Japan's case, the size of each company is not very large, so the idea was for small companies to gather and create a large complex.

A system was established in Japanese chemical complexes where Company A would manufacture something, and the by-products from that would become the main raw material for Company B to manufacture something else. I believe that was very effective in reducing waste. In a sense, it was a very rational process of using materials carefully to create products.

This changed significantly with the two oil shocks in the 1970s. This first led to difficulties in raw material procurement. Furthermore, with the Plaza Accord in 1985, the yen suddenly appreciated, and the scenario of earning foreign currency through exports, which had supported Japanese industry until then, collapsed.

When the yen appreciated, export competitiveness suddenly dropped to less than half. However, production capacity remained the same. Moreover, the things that companies were producing while taking in each other's waste saw their respective positions change, and the spirit of the complex stopped functioning.

So there have been such historical transitions.

Because of that, from the 1980s onward, the industrial world also began to reduce waste as much as possible. First, by increasing the yield in a single manufacturing process, they reduced waste itself and increased product productivity. People began to realize that economies of scale could not be achieved with the old concepts, and manufacturers all started talking about a "shift from quantity to quality." To increase profits even with small quantities, they had no choice but to create high-value-added products.

Another thing is that while they had previously emphasized the cost of manufacturing in the factory, they hadn't paid much attention to other peripheral costs, such as logistics, recycling, and waste disposal costs. Awareness began to change toward the idea that all costs must be viewed as a whole when making a single item in a factory. Legally, I think various regulations, including the CO2 issue, are pushing that forward.

In that context, how have the initiatives at AGC Inc. changed?

Our company's main products are glass. Since architectural glass has a very long lifespan, it is suitable for recycling. We have long used waste glass from construction materials as cullet, part of the raw material for making new glass. That said, the recycling rate hasn't reached 70%, so we are continuing efforts to increase it.

This applies not only to architectural glass but also to automotive glass and bottles. In Europe, there are more bottles than plastic for containers. This is because, in a sense, they can be continuously recycled. In Japan's case, PET bottles have become mainstream.

The recycling rate for bottles is currently around 74%, and we are advancing that further. Of course, recycling itself is important, but it's also good from the perspective of CO2 reduction because it saves that much energy. That is a major area we are working on.

In extreme cases, once glass is installed, it continues to be used until the house or building is demolished, so there is no doubt it is a long-life product. Recently, we have been working not only on extending lifespan but also on reducing energy consumption by, for example, applying special metal coatings.

Eighty percent of the heat transfer between the temperature inside a house and the outside world occurs through window glass. Therefore, using glass with high insulation properties increases the insulation effect and ultimately leads to CO2 reduction. Double-glazed windows, which combine two sheets of glass, have now reached a penetration rate of over 90% in new homes.

When we ran a simulation in the past, replacing all window glass in single-pane glass houses nationwide with high-insulation eco-glass would save an amount of electricity equivalent to about two nuclear power plants. It seems the conversion standards have changed recently, so I get complained to when I say this (laughs).

After all, it's about "Reduce"—how to decrease energy consumption. Considering this as an issue for the entire environment, not just plastics, it seems that using five layers of glass has the same effect as an insulated wall. Using three or four layers, with films sandwiched in between to provide strength, has already begun to be put into practical use.

Material-based industries need to eliminate waste and provide the materials necessary for a circular society through recycling and reuse.

I believe the movement to charge for plastic shopping bags two years ago was largely due to the problem of marine plastic pollution. Mr. Takada, as someone who has researched the state of marine pollution for a long time, how do you perceive the current state of pollution in the natural world?

At the United Nations Environment Assembly in March 2022, a resolution was passed to begin negotiations on a plastic treaty (a legally binding international agreement). This reflects the global spread of plastic pollution and the severity of its impact. While dioxin was one trigger for the Ministry of the Environment, another important point regarding plastics is that the issue of endocrine disruptors emerged in the 1990s. Some plastics themselves become endocrine disruptors, and there are several additives that are endocrine disruptors themselves, yet they are still being used today.

Endocrine disruptors eventually enter the ecosystem and humans are exposed to them. In particular, plastic waste becomes microplastics, enters seafood, dissolves there, accumulates in the flesh of the seafood, and humans are exposed through the food chain. That perspective is very weak in the Ministry of the Environment's policy. We have said this many times in committees, but it doesn't change. I believe the biggest problem is that the issue of endocrine disruptors has been ignored.

Even today, PET bottled water is placed here. Rather than the person who placed it being at fault, I think the problem lies with the Ministry of the Environment for not raising awareness about such things. Looking at individual items, PET bottles are the most common form of plastic pollution in the sea. However, they don't take any action against them. I think the idea that recycling is enough is the problem.

Even if recycled, as long as they are used, drinking from them increases the risk of microplastics and chemical substances like additives entering our bodies. A recent study in China showed that when comparing people who live on tap water with those who drink bottled water, the amount of microplastics in the feces of those who drink bottled water is higher.

I believe a circular economy is different from recycling. A circular economy is about changing the choice of materials and changing how the materials themselves circulate within society. It is a mistake to think that a circular economy has been achieved simply by increasing the recycling rate. No matter how much you recycle PET bottles, as long as you continue to use them, the fact that humans are exposed to chemical substances remains unchanged.

There is still much that is unknown internationally regarding the extent of the impact on humans, but in Europe and the U.S., they have moved toward "reducing where it's not necessary to use" as a precautionary measure.

You mentioned that there are many glass bottles in Europe, but I believe that is not just a matter of recycling rates or price; it's because the sense of crisis regarding the use of plastic for food and drink is higher among Europeans, whereas it is low in Japan, so we continue to use it.

Even from the perspective of global warming, I agree that glass bottles are superior. Producing and recycling one PET bottle generates 140 grams of CO2. With glass products, it can be kept to 80 grams.

Mr. Takada, you collect pellets and other items washed up on the shore to conduct marine pollution surveys. What can be learned from that research?

We pick up plastic washed ashore and measure the hazardous chemical substances contained within it. Various things are included, but they can be broadly divided into two types: one is what adhered from the surrounding seawater, and the other is the chemicals called additives that were originally mixed into the plastic and remain there. Recently, I have been focusing on those residues.

Plastic has the property of floating and drifting far away. That's why it's found on remote islands, such as Easter Island or the Ogasawara Islands. We have recently discovered that even plastic found in such places contains residues of additives mixed in during manufacturing at factories hundreds of kilometers away. Plastic is transporting chemical substances like additives to distant remote islands. We are beginning to see that this poses a risk to fragile ecosystems that were originally free of pollution.

You mean the marine ecosystem.

Yes. However, these microplastics are also in familiar places. They are contained in the sewage we discharge, and they fall on the streets and are washed by rain into rivers and waterways. They eventually enter the marine ecosystem.

To investigate when this pollution began, we measured the mud (strata) in the moat of the Imperial Palace. In the deep layers of the strata, from the Edo period, microplastics are of course not included. They start to appear a little in the 1950s. By the 2000s, the amount increased more than tenfold. We have learned that pollution is progressing rapidly due to our mass production and consumption of plastic.

They are also drifting in the atmosphere, aren't they? And they end up accumulating in the moat.

That's right. In addition, things that fall on roads and the ground are washed away when it rains and accumulate in the strata. It is truly the Anthropocene. I think it is a symbol of an era where human influence reaches even into the geological layers.

Mr. Yamamoto has been researching waste for a long time. In that context, what are the characteristics of Japan's resource circulation policy and the movements in resource circulation?

I keenly feel from discussions at international conferences that recycling, as Mr. Takada mentioned, is not the goal of a circular economy. However, we cannot reach the ideal suddenly. In reality, the path to getting there is important. In terms of thinking about what to do tomorrow, I feel it's somewhat unavoidable that there's a PET bottle here today (laughs).

With that background, I'd like to speak. First, there is the issue of policy leakage.

Mr. Tsukahara mentioned dioxin. In the 1990s, incineration facilities were very small, so incomplete combustion inevitably occurred, releasing dioxin. From around 2000, the Ministry of the Environment provided subsidies to make them larger.

However, at the same time, various 3R laws were enacted to reduce waste, and waste decreased. In other words, while the amount of material to burn was decreasing, incineration facilities were getting larger and larger. As a result, incineration capacity became surplus, and the recycling rate in some municipalities became low.

At around 1000 degrees, complete combustion occurs and dioxin is not released, but if you stop incineration because there is nothing to burn, it passes through the dangerous range of 200 to 600 degrees. And when you light it again, it passes through it once more. From the perspective of people on the ground who think it would be terrible if dioxin were released, there is a desire to keep it running constantly.

In this way, there are cases where you can't satisfy one requirement without compromising another, but economics is quite good at analyzing such things, so I think that kind of perspective is important.

Also, Mr. Shimamura mentioned complexes earlier. Non-ferrous metal smelting, such as copper, zinc, and lead smelting, still remains in Japan, and they exchange each other's waste through recycling. Zinc from copper smelting is passed to zinc smelters at another company. By doing this through a nationwide network in Japan, they barely reach international prices. Therefore, if that network is cut somewhere, price competitiveness is lost all at once.

The biggest crisis was when Japan was about to run out of lead-acid batteries to recycle because South Korea was buying up scrap lead-acid batteries from all over Japan at low prices through illegal processing. When improper processing was cracked down on in South Korea in June 2016, the Ministry of the Environment moved quickly and managed to maintain it, but as trade becomes more uncertain in the future, I believe maintaining such networks is important in the world of resource circulation.

What are the characteristics of waste treatment in Japan?

Waste treatment in Japan is overwhelmingly dominated by incineration. About 80% is handled this way, whereas in other OECD countries, it's mostly in the 30% or 20% range. Relying heavily on incineration is the biggest characteristic of Japan's waste treatment.

Japan claims to be recycling by recovering energy there, but this is actually not very good. This is because, internationally, it doesn't count as energy recovery unless it has a certain level of energy efficiency. The energy efficiency of waste-to-energy power generation cannot be called good; it ends up being treated as normal incineration and does not count as recycling institutionally, so there is no doubt that Japan burns too much.

On the other hand, other countries rely on landfills, which is also not necessarily good for the environment, and it cannot be said that they are not contributing to global warming from there. Whether it's recycling or reducing waste itself—I think discussions around this will be difficult, involving the industrial characteristics and climates of each country.

It's true that energy efficiency is poor, but regarding plastics, even if energy efficiency were good, you're just burning something made from petroleum; it doesn't become plastic again, so it's not recycling, is it?

Exactly. As it stands, if efficiency is low, it isn't even counted as energy recovery.

The term "thermal recycling" was coined as incorrect Japanese-made English for heat recovery, misleading the public. Recently, the Ministry of the Environment has stopped using it, but they did so until a certain point, and I think that was one reason why plastics became so prevalent in Japan.

Burning plastic is not recycling. I think we experts need to do more to make society understand that "thermal recycling" is an incorrect term.

Mr. Tsukahara, hearing this, do you have any comments from the perspective of the administration?

First, personally, I am very concerned about the microplastic issue and am careful, such as growing loofahs to use instead of nylon scrubbers and using laundry nets with filters that prevent microplastics from escaping. This is out of a desire to reduce the accumulation of impacts, even in small ways, when thinking about the next generation.

The production and usage of chemical substances are increasing steadily. Besides endocrine disruptors, there are substances whose impacts and actual presence are not clearly understood, which is a challenge. For example, there are international discussions regarding evaluation methods for nanomaterials and the actual presence of pharmaceuticals in the environment, and Japan is also striving to accumulate knowledge.

The impact of plastic additives is not yet known for certain. However, because plastic is deeply integrated into our lives, exposure to additives is definitely increasing. I believe we must proceed with monitoring exposure levels and research and discussion regarding health impacts.

At the Ministry of the Environment, I was in charge of approaches to unexplained problems related to chemical substances. One example is a large-scale epidemiological study (the Eco-Chill Study: Japan Environment and Children's Study) based on the concept of precautionary measures, aiming to clarify the effects of chemical substances in the environment on children's physical and mental health.

With the cooperation of about 100,000 pairs of parents and children nationwide, we track babies from the womb until they reach age 13. As a research result using data from the Eco-Chill Study, Nagoya City University recently announced an analysis showing that pregnant women who frequently eat commercially available lunch boxes or frozen foods (3 to 7 or more times a week) have a 2.6 times higher probability of stillbirth compared to those who eat them less frequently (once a week or less).

Following this announcement, there were reports suggesting that additives might be released from microwaving plastic containers, but that study has not yet verified a causal relationship with chemical substances. Since socio-economic factors and lifestyle factors are also thought to have a complex influence, further research is awaited to clearly identify the cause and take preventive measures.

As Mr. Takada pointed out, the idea that burning for proper disposal or recycling solves everything is wrong. In plastic recycling, there is a possibility that additives are recycled together as recycled plastic, but if harmful substances are included in the additives, there is a risk they will concentrate through recycling.

Heat recovery (which the Plastic Resource Circulation Act distinguishes from recycling) is also a factor that advances global warming. Fundamentally, we must reduce usage. In particular, there is too much one-way use of plastic.

On the other hand, it's not just experts or people directly involved in manufacturing who create a circular society; general consumers, citizens, and society as a whole create it. Mr. Shimamura, I imagine many of your material customers are companies. Do you feel that the response of those companies toward resource circulation is changing?

It is only recently that the business world has begun to be conscious of the environment along with convenience; in the past, the priority was simply to produce and consume in large quantities. Now, although it's not yet sufficient, automobile manufacturers are starting to do what they can, such as reusing bumpers. I feel that awareness of not increasing waste any further has risen considerably.

One thing I'm concerned about is that the EU is quite far ahead in its thinking on environmental issues. Even if it feels abrupt to us, they put things forward based on the idea that they must do these things as precautionary measures. In contrast, Japan's style is symptomatic treatment—doing something once a problem occurs.

This may be a difference in national character, but I think we are reaching a time when we must change the old way of "doing something when something happens" for environmental issues as well. Europe puts out precautionary measures first, and the industrial world has to develop technology toward them. It's a policy approach of subtracting from the worst-case scenario.

Regarding carbon neutrality, Japan has also said, for better or worse, that it will reach zero by 2050, and we have to think about various things toward this. With the Japanese way until now, one would first think, "Carbon net zero by 2050 is impossible." But starting from the idea that the world won't survive if we don't reach zero, I feel that thinking about what needs to be developed and how things need to be made by then has finally begun.

In terms of consumer awareness, it seems that in Europe, many places are starting to renovate house windows on a very large scale as a base for carbon neutrality.

Also, in cold countries, heat tends to enter and leave through windows, so they tend to make windows small. However, making windows small is not good for mental health. It is said that large windows soothe people's feelings. In Northern Europe, there is data showing that the suicide rate, which was high in winter, decreased by making windows larger with high-insulation glass.

In that way, high-heat-resistance window glass is effective not just for energy efficiency but as an item for human well-being.

There was a major global issue where neonicotinoid pesticides were causing honeybees to disappear. Even before the cause was fully identified, the EU restricted or banned the use of neonicotinoid pesticides. I wondered how they could make decisions so quickly with so many countries and stakeholders involved, but now I understand that such a background exists.

I believe the impact of the photo of a sea turtle with a straw stuck in its nose was significant in making ocean plastic pollution a social issue that many people became aware of. Mr. Takada, do you feel that the awareness and behavior of citizens are changing?

Plastic pollution has spread throughout the entire ecosystem, and plastic has been detected in the bodies of over 600 species of marine life, from whales, sea turtles, and seabirds to fish and shellfish. I believe that public concern is growing due to the damage to various marine organisms.

Because it is an issue for marine life, some people focus on cleaning up beaches to keep the ocean clean. Others think about where the source of the damage to marine life lies and try to review what they can change in their own lives, such as avoiding single-use plastics as much as possible.

However, if we focus only on the issue of marine life, some people might think, in the extreme, that it's fine as long as we collect it properly on land and burn it at high temperatures in large-scale incinerators so it doesn't enter the sea. But that alone cannot protect our health. In fact, plastic and related chemical substances have been detected in human blood and fat. Thinking that far ahead, an increasing number of people are avoiding the use of plastic itself.

Charging for plastic shopping bags began the year before last. Do you feel that awareness has changed?

Quantitatively, I think they have definitely decreased. Many people bring up the charging for shopping bags at public lectures and such, and many say they are trying to do what they can by carrying their own reusable bags.

While some people move toward reducing other plastic containers and packaging because there are so many others, there are also those who continue to use shopping bags, thinking it's pointless to do this when there are so many other types. Still, I think the charging has acted as a trigger, and the number of people taking an interest is increasing.

Resource circulation policy is something closely tied to the lives of ordinary people. In a sense, it requires effort, so I believe the state of citizen awareness is very much involved.

Regarding the shopping bags, it is true that there are those who work hard at it and those who think it's pointless if they are the only ones doing it. As a result of charging for or banning shopping bags, there has also been an increase in the purchase of trash bags. There are also reports that the consumption of transparent bags provided in supermarkets has increased significantly.

That being said, since the charging for shopping bags, I think an atmosphere has been fostered that it is okay to sacrifice consumer convenience for the sake of the environment. In environmental economics, the stance used to be not to consider things like environmentally friendly consumers, but I think that is no longer the case.

In CO2 reduction, there is a standard called Scope 3. Japanese companies are very good at reducing Scope 1 through their own efforts. However, when it comes to Scope 2 and Scope 3, it becomes increasingly difficult to reduce without the cooperation of clients and consumers. I think Japanese companies and administrations have been poor at that coordination, but the circular economy feels like the waste version of Scope 3.

It's not just about each company making long-lived products, but how the consumer uses them afterward. For example, even with a reusable bottle, if you only use it 10 times after buying it, a PET bottle would have been better, and the environmental load actually becomes higher. I believe the circular economy aims for things that cannot be achieved unless there is a premise that they are properly operated within the whole system, including the consumer, after they are made and sold.

How to do this is a very difficult but extremely important issue, and I really want the Ministry of the Environment to do its best.

Having conducted research on waste, do you feel any difference in awareness between EU citizens and Japanese citizens?

In terms of average values, I don't think they change that much. However, when you look at the numbers, although it's not a matter of consumer sorting, the incineration rate is very high, and Japan's recycling rate for household waste is very low. I think there are various reasons for this, but in that sense, I feel the pressure that we are not seen as an environmentally advanced country.

However, ordinary households in Europe do not sort their trash, do they?

That's right. Compared to Japan, there are many cases where they don't sort much at home and take it to intermediate treatment facilities. That way, consumers don't have to make an effort, so more recyclable resources are collected. If you make consumers sort it, they find it troublesome and just put everything in the combustible trash, resulting in fewer resources being collected.

On the other hand, I think the Ministry of the Environment believes that the high level of awareness regarding sorting is linked to various environmental behaviors within Japan.

As you say, we have been doing the 3Rs like a slogan for a long time, and regarding the shopping bags, the Ministry of the Environment has been supporting initiatives by local governments and supermarkets through model projects since the 2000s. I think the fact that the issue of marine plastic gained global attention was a major factor in being able to step into national regulations. On the other hand, there was criticism that shopping bags only account for about 2% of the total amount of plastic waste and would not be a fundamental solution to the marine plastic problem.

However, according to a UN report, the amount of plastic container and packaging waste per Japanese person is the second highest in the world after the US (2014 data). The problem is that so-called one-way use of disposables has become established, and shopping bags can be said to be a symbol of that.

I also feel that consumer awareness is gradually changing. As I mentioned with the example of one-way plastic, Japan's plastic measures are lagging, so some say the new Plastic Resource Circulation Act should have gone a step further. For now, however, a foundation has been created where various things can be done, and a framework has been established to proceed from a duty to make an effort. I hope that as consumer awareness changes, it will become like so-called soft law where everyone feels they must do something, leading many companies and local governments to take action.

Recently, I bought Sony wireless earphones, and they are made entirely of recycled plastic, and they are white. I think this is quite amazing. There is little such information in commercials or advertisements, and basically, high functionality is promoted, but according to the manufacturer, environmental consideration is being valued in surveys and consumer reviews.

In this way, there is a reality that young people are responding to so-called "meaningful consumption" or ethical consumption. I feel a big change in the fact that the younger generation, who will occupy a very important position as consumers in 10 years, is starting such consumption styles. I feel once again that the Ministry of the Environment should move policies with a future vision of how things should be, while being conscious that what is natural for future generations will change.

One more point: within SFC, I want to evaluate the current status of energy and resource use, discuss what decarbonization and resource circulation should look like, and specifically bring about change. As I've found by doing it myself, energy and resource issues are not something that can be completed by ourselves, so we inevitably have to think about involvement with the local community.

For example, even if we put solar panels on almost all the roofs of SFC buildings, they can only cover 20-30% of the demand. Transporting the shortage from far away results in large losses. So, when looking for unused resources nearby, there are biomass resources such as food waste from SFC and livestock waste from nearby pig farms. I am thinking of visionary ideas like whether we can somehow generate power using these. If we want to achieve true zero emissions while being self-sufficient in resources within a small country like Japan, I think it is absolutely impossible unless we share information with local people and do what we can for each other.

As a Ministry of the Environment official, I want to be able to capture the word sustainability broadly and talk about various values comprehensively, including local benefits like becoming healthy, everyone being happy through connections with the community, or being glad to wear something wonderful, rather than just putting the environment at the forefront.

Also, the Ministry of the Environment has been implementing policies under the term "Sound Material-Cycle Society" for a long time, but recently, Professor Hiroki Tanikawa and others at Nagoya University have been conducting research under the term "Stock-type Society," which was an eye-opener for me. Many stocks are being created in society, and we should properly evaluate, maintain, and use them for a long time. We should visualize what is where. It is proposed that Japan, which accumulated various stocks during the period of economic growth, should consider their utilization amidst future resource depletion.

While "Sound Material-Cycle Society" is a term that has driven policy, I think a shift in thinking where each individual looks at the stocks that currently exist is also important.

Hearing such stories makes the future feel bright. Within that vision, we must discuss the challenges for realizing a Sound Material-Cycle Society.

Mr. Shimamura, when thinking about resource circulation in the industrial sector, what kind of network-like mechanisms, systems, or institutions will be necessary in the future, beyond just recycling?

Chemical plants used to operate in an eco-cycle where small parts gathered together to use everything up to the end, but that became impossible due to changes in the environment of each company. I would like to make it possible to do that again in a different form.

In terms of decarbonization, I think Scope 3 is exactly about collaboration. If everything is based on self-sufficiency, open innovation is difficult to achieve. For example, even among material manufacturers, there could be initiatives to reduce transport volume and lead to CO2 reduction through regional swaps.

Regarding cost reduction as a manufacturer, Japanese people say they work hard, but Europeans standardize the work. In Japan's case, it's craftsmanship (takumi); over there, it's a system. Japan says this is a black box, so we can't show it.

Regarding resource circulation, it is necessary to proceed by collaborating and borrowing each other's strength, not just looking at one's own company's situation. If we don't reach carbon net zero by 2050, companies will be out of the ring and unable to do business, so this is a matter of life and death. We must act with that awareness. At that time, the mindset of "only my place" is no good.

Especially when it comes to different industries, communication doesn't work at all. Because they are different industries, there may be parts that can be utilized well, so rather than asking the government to think of networking and specific action plans, private companies themselves need to communicate to the Ministry of the Environment or the Ministry of Economy, Trade and Industry that they can do such things in a form that fits their actual situation.

I also serve as the chairperson of the Asahi Glass Foundation, and every year we ask people of various generations around the world about the Environmental Doomsday Clock. I don't think young people's awareness or interest in the environment is low. I think we should spend more money on efforts to get those people to have a strong awareness of the environment.

How do you perceive the society that uses resources that you design, Mr. Takada, and its challenges?

As long as plastic is made from oil, we will be out of the ring in 2050. As long as we are making products dependent on oil, they will no longer be bought in Europe or America.

Then, if you ask if we should just change all plastic to be made from biomass that doesn't depend on oil, even biomass is cellulose, so if we try to replace all 10 million tons of plastic currently used in Japan with cellulose-derived ones, large-scale deforestation would occur. For such reasons, I think a world will come by 2050 where we must significantly reduce the overall amount of plastic used compared to now.

What should we do for that? I think various measures are necessary, but the most necessary thing is to change from an economic system that mass-produces fresh food and daily necessities in limited places in the world as monocultures and transports them globally, to a social system that circulates things within certain regional units. Recent cases have made it clear that the global economic system until now had good short-term economic efficiency but is vulnerable to crises such as infectious disease outbreaks and international armed conflicts, and is not sustainable.

And as long as things are moved globally, plastic packing materials and packaging will inevitably appear. I won't go as far as local production for local consumption, but we need to change the world into a form where things circulate in regional units. I believe we should incorporate the plastic problem into that and solve it. Especially if we are to reduce the amount of plastic used while reducing the carbon footprint, I think it is necessary to aim for a decentralized and circular society where things circulate in regional units.

Some people think of biodegradable plastics such as biomass as a dream technology and believe that using them will be fine. However, that technology is only supplementary, isn't it?

Exactly, I think it's a supplementary technology. I think something that is biodegradable and biomass-based is one essential form if we are to use plastic, but there are environments where it won't decompose if it enters the sea. We have also detected biodegradable plastic as microplastics on the seabed of Tokyo Bay. We must also create a system to collect it properly on land and let it decompose there. I think it's dangerous to rely only on material improvement.

The important thing is to think of a system that changes the way things are moved in society while changing the materials. It won't be easy because the whole society must change, but there is still time until 2050, so I think we cannot fundamentally solve it unless the public and private sectors work together to change the way things are moved toward that goal.

It's never the case that things will be fine just because the technology exists; we should change social systems and behaviors together. You mentioned that a mechanism like the Regional Circular and Ecological Sphere is necessary, but I think a Sound Material-Cycle Society requires various elements such as networks and communication. Mr. Yamamoto, what kind of system-building do you think is important?

That's a difficult question (laughs). I think the Regional Circular and Ecological Sphere is a very good idea. However, I think waste treatment facilities were included as one of the cores of the idea put forward by the Ministry of the Environment, but that region is too small. In terms of economies of scale, it should be done in a sphere about two to four times larger. There are too many current incineration facilities, and if we do it at the current scale, it won't work well.

Currently, the cost of burning one ton in waste treatment is very high. Whether incineration is good or bad is another matter, but it becomes a more efficient incineration system if we collect more and process it on a large scale, so when considering the sphere, I think policies that can be formed in a way that also considers economic efficiency are important.

I also agree that relying on materials is difficult. From a different perspective, if cellulosic or biodegradable plastics enter the current recycling system, they actually become foreign matter. That's why it's difficult to introduce them even during the transition.

I think this is one typical example of what Mr. Takada said earlier about having to change the system for the whole society.

Mr. Tsukahara, what kind of new structural mechanisms is the administration currently heading toward?

I think the regional circulation mentioned just now is the biggest part. I think it started with the talk of regional decarbonization, but it's becoming a flow where resource circulation and biodiversity issues are all connected. Since both decarbonization and biodiversity are deeply related to resources, I think resource circulation will come to the center of regional discussions. It's hard to feel the change in decarbonization just by installing solar panels, but resource circulation has changes in a visible form, so I think it's easier for each player to engage with.

However, I think there is a very big problem in that both citizens and waste generators feel that as long as they put the waste out, the administration or contractors will process it without them knowing. Regarding the issue of overseas exports that I have worked on, we have relied on China for processing both metals and plastics on a 20-year scale, but most Japanese people didn't know that.

In fact, what we lost during that time is also very large. When creating the Act on Promotion of Recycling of Small Waste Electrical and Electronic Equipment, I was told that the situation where home appliances were leaking overseas was bad and to stop the overseas leakage, so I worked hard on the issue of mixed metal scrap. Around that time, the Chinese side also decided to ban the import of mixed metal scrap and plastics. However, because there was no market for such things in Japan and we hadn't built an ecosystem, even if we suddenly say "domestic circulation," the environment to do so is not ready.

Unless we create demand for recycled materials and firmly work on nurturing people and companies, we will end up with a mountain of difficult-to-process materials domestically.

I believe it is necessary to look at resources from a long-term perspective and conduct resource circulation policy along with resource importance and resource strategies. To solve that, I think optimizing the scale of circulation and bringing it down to the local economy is an important approach.

I often hear that when the balance of supply and demand changes, technology can decline in an instant, technological innovation may not progress, or the industrial structure can go to an irreversible point. This might be particularly prominent in resource circulation, that is, the venous part.

Finally, I would like each of you to say a word on what you think the challenge for designing a Sound Material-Cycle Society is.

One big difference between the venous side, which is the premise of resource circulation, and the arterial side is that you cannot control the amount generated, or it comes out with a delay. Production stops at that stage if you say you'll stop, but trash keeps coming out later. In that case, ensuring proper treatment is important.

While drawing a beautiful picture like the circular economy, there are things that inevitably come out that cannot be controlled, so we must not forget the perspective for proper treatment.

For example, there are cases where a manufacturer, without entering the Container and Packaging Recycling Act, might take away only clean waste PET bottles because they want them, buying them first. On the other hand, dirty plastics are left behind in the system. If a situation occurs where such dirty plastics are not treated well, that is indeed bad. I think we must not forget to keep an eye on both.

We are in an era where companies that lived at the height of so-called shareholder capitalism, where it was fine just to make and sell, must change their stance. What is required now is truly public interest capitalism, or stakeholder capitalism.

At that time, I think we are in an era where companies are required to recognize everything from raw material procurement and development to disposal of what they made—not just CO2, like a life cycle assessment—and take necessary measures themselves.

However, since one company's power is weak, we aim for a new Sound Material-Cycle Society by reconstructing networks within companies or society. I think this is exactly the "new combination" that Schumpeter is talking about. I think companies should always have the awareness that if they ignore this, they will no longer be able to do business in society.

The Ministry of the Environment's perspective on the plastic problem is too strong on waste management or resource circulation, and I think the perspective on the effects of plastics, especially chemical substances, on organisms is very weak. Unless we strengthen that, although it is circulating, the amount of chemical substances flowing in the system will not change, or rather it will increase, and exposure of the ecosystem or people to hazardous chemical substances will increase. I think we must not forget the perspective of exposure to hazardous chemical substances.

And rather than regulating because some specific effect has appeared, I think a preventive perspective is important, regulating because effects are already appearing in those who are susceptible.

The SDGs have a major goal of "Leave No One Behind" before the 17 individual goals. Since the effects of chemical substances vary greatly depending on the individual, it is a fact that effects are already starting to appear in those who are susceptible, such as those with multiple chemical sensitivity. It is also a fact that plastic-derived chemical substances are accumulating in our bodies. While there are still few cases where a causal relationship between the two can be established, effects are starting to appear in the vulnerable. There have been cases where plastic additives were detected in the blood of patients with endometriosis, and research results like the one mentioned earlier where plastic products are suspected as a cause of stillbirth in pregnant women have also come out.

Considering the precautionary principle or the SDG principle of "Leave No One Behind," I think we must handle the issue of chemical substances more preventively, like in Europe.

I hear that how to handle chemical substances contained in plastic, especially additives, is becoming an issue in the negotiations for the plastic treaty. I think the issue of chemical substances contained in plastic should be treated equally with waste management and resource theory and incorporated into the creation of a Sound Material-Cycle Society.

Now, finally, Mr. Tsukahara. I apologize for asking you from the standpoint of the Ministry of the Environment even though you are now a faculty member of the Faculty of Environment and Information Studies, but please give us a comment from the administrative side.

I think the fact that the distances between production, consumption, and disposal have become so far apart is the big problem to begin with. From the consumer's perspective, a way of consuming where they don't know where it was made and don't know where it goes after it's thrown away has increased the risk. I think we must consider how to face risks, including the precautionary principle.

The adoption of the SDGs has become a tailwind, and the Ministry of the Environment is increasingly talking directly with companies. From now on, I think governance-type policies will become mainstream rather than regulation-type. I hope the Ministry of the Environment can propose more in-depth ideas and collaboration methods to companies. And above all, I believe the important role of the administration is to create a business foundation for fair competition where companies that can be active in the future can grow.

In addition, from the perspective of citizens, I want to send out messages so that people notice that both decarbonization and resource circulation are deeply related to things close to life, such as food and fashion.

There is no doubt that the environment is in a critical situation, but waving the flag for the environment alone will not resonate. I think policies are needed that can depict a future where everyone pursues happiness and, as a result, environmental problems are solved.

I feel that you have taught me today that a society that has properly realized resource circulation is one where various elements are intertwined, far exceeding what is evoked by the term resource circulation.

You have given very suggestive talks. I have also learned a lot, and I would like to thank you.