The Sumitomo Forestry Group is deeply interconnected with forests, which play a central role in solving global environmental problems, including global warming. Its environment-related businesses include sustainable plantation forest operations that respect biodiversity, biomass power generation, environmental greening operations, and environmentally friendly products, as well as many other fields that hold potential for commercialization. Leveraging our accumulated expertise and knowledge, we offer tree-related consulting services, and have built a business model on these services for actually implementing our ideas on site. This is embodied in our environmental problem solutions business, which realizes sustainable use of natural resources while harmonizing with the environment and the local community.
Today, protecting biodiversity has become an important issue, and this has prompted a range of initiatives involving the use of corporate green zones.
Sumitomo Forestry Landscaping Co., Ltd., which is involved in a variety of greening and biodiversity-related businesses, such as rural regeneration projects, has collaborated with the MS&AD Insurance Group and Regional Environmental Planning Inc., to create Eco-AssetTM to provide consulting services to companies, mainly for biodiversity greening in corporate green zones. From October 2011, Sumitomo Forestry has also participated in this organization through its Eco-Asset Team and is aiming to expand the scope of its environmental business through the team’s activities.
The Company is aiming to recreate Mitsui Sumitomo Insurance’s land in the Surugadai District (Chiyoda Ward, Tokyo), which is located 1km away from the Imperial Palace, into a green city space that reflects the abundant nature found in the palace. It is currently pushing ahead with this redevelopment to create a green space that will attract a variety of living creatures. The Eco-Asset Team began collaborating with this redevelopment project when an application was made for recognition as a Special Urban Development Area. Construction of the new building was completed in February 2012, while repairs to the adjacent main building began in May 2012. In addition to exterior landscaping, Sumitomo Forestry Landscaping Co., Ltd. received orders to undertake a variety of other greening projects for the redevelopment, including wall greening, eaves greening, and planting roadside trees.
In fiscal 2011, this project was awarded the highest possible ranking of Superlative Stage in the recently renewed Social and Environmental Green Evaluation System1 (SEGES) assessment, making it the first project in Japan to receive this ranking.
In 2011, the Eco-Asset Team carried out environmental evaluations at 121 Panasonic Group business sites throughout Japan. Among the sites evaluated, the Kadoma and Moriguchi area in Osaka was considered to be particularly environmentally important and an initiative was launched at this location to create a business site that also functioned as a bio-reserve for living creatures. This included removing part of the parking lot and the grounds and preparing a green zone, primarily for attracting butterflies. Construction for this project was completed in March 2012, and its success in attracting living creatures to the Yodogawa water network in the northern area and the Tsurumi Ryokuchi Park southern area is currently being confirmed.
During the period of rapid economic growth in Japan, large-scale green belts were created in coastal industrial zone, one of which is located near Chita City, Aichi Prefecture. In the subsequent 40 years, the tree saplings planted in this green zone have grown to create a forest that serves as the habitat to many living creatures, and moreover forms the basis for a number of regional ecosystems. A movement has gained momentum among companies in the coastal area of Chita City to integrate the land that they each own within this green zone with the aim of contributing to the region in which they planted their own roots as businesses.
The Eco-Asset Team has been providing consulting services on biodiversity to individual companies that own land in the greenbelt, and it is also participating in the New Public Services Support Model, a project to utilize corporate green zones and protect the region’s natural environment.
Daiwa House Industry Ltd. announced that it would use 330 hectares of its unused land in Hayama Town, Miura-gun, Kanagawa Prefecture to create a nature-encounter facility, which it will open as a base for nature activities in the region. Various stakeholders are participating in the plan and will utilize the facility for a range of uses, such as growing firefly, farming, and for hiking and running trails. During fiscal 2011, the Eco-Asset Team focused its efforts into ecosystem surveys and stakeholder analyses, and based on the results of a potential assessment, in fiscal 2012 it will push ahead with the fundamental measures set out in the plan to utilize the green areas.
The Company will work to develop new environmental businesses, using its greening operations as the gateway into these businesses.
One of Sumitomo Forestry’s businesses has been developing technologies for breeding trees with the same qualities as treasured trees and precious trees in various regions, in order for future generations to benefit from these trees.
The cherry tree is the flowering tree most synonymous with Japan, and breeding to create new varieties has taken place here since the Muromachi Period. As a result, it is said that today there are more than 250 varieties of cherry tree. However, it is extremely difficult to identify the variety solely from the tree’s external appearance, and therefore Sumitomo Forestry collaborated with the Forestry and Forest Products Research Institute, a National Institute of Genetics, and the Association for the Propagation of Knowledge on Genetics, to jointly develop a technology to identify the variety through DNA markers.
In March 2010, the Company completed the creation of a database of 200 varieties of cherry trees for which DNA information was available, in collaboration with the Forestry and Forest Products Research Institute, using the above-described identification technology. The database clearly identifies and organizes the data on individual varieties, making it possible to accurately identify and manage the data in the future.
The Yuten cherry tree is an ancient breed found at Seigan-ji Temple, Tokyo, that has been designated a protected species in Shinagawa Ward. Due to the advanced age of the trees and rapid changes in the environment in recent years, the trees have shown signs of decay in their canopies, raising the need to plant successors. In 2011, Sumitomo Forestry Co., Ltd. and Sumitomo Forestry Landscaping Co., Ltd. were successful in breeding seedlings of these trees, using their plant tissue culture techniques based on progress made thus far in development and applied research.
In addition, during their most recent investigation, the companies used the database of cherry tree DNA to attempt to identify the DNA of the Yuten cherry tree and they concluded that it is highly likely that it is a new variety. The Company is also involved in a range of other initiatives to breed and preserve Japan’s historically and culturally important trees.
Backed by its knowledge of forest management in tropical regions, the Company offers consulting services for environmental reforestation and for the protection and cultivation of forests that takes into account local communities, such as for the restoration of degraded forests in tropical regions and the rehabilitation of biodiversity.
With the aim of restoring degraded forests in national parks, Sumitomo Forestry has been working on a reforestation project for the Paliyan Wildlife Sanctuary in Indonesia.
As a result of reforestation that began in April 2005 and continues today, it has planted around 300,000 trees on 350 hectares of land, as of March 2011. From April 2011, with the goal of ‘Creating a Framework for the Independent Protection by Local People of Abundant Forest Areas,’ the Company launched a support project to provide local people with guidance on farming methods that help to preserve forests, and has also created a scheme through which local people can independently protect the forests once they have regenerated.
Since 2007, Sumitomo Forestry has participated in the industrial reforestation of lands managed by The Indonesian State Owned Forestry Enterprise (Perum Perhutani) for the purpose of timber production, and also in the environmental reforestation of these lands for the purpose of increasing watershed protection, contributing to local economies and preventing global warming. For the former, 72.4 hectares have been reforested, and some of the harvested trees were processed into fiberboards and used to build cabinets for electric pianos made by Roland Corporation. For the latter, a total of 30.6 hectares have been reforested.
In addition to continuing with the cultivation carried out in fiscal 2011, the Company has created a harvesting plan for its industrial tree plantation in this region that it will launch during fiscal 2012.
Sumitomo Forestry has been developing a new business model for plantation forest operations based on data from land-observing satellites. By using satellite information, environmental data of the planned site stretching across a broad area can be obtained or estimated with a high degree of accuracy, which is extremely valuable for conducting reforestation projects in developing countries.
In cooperation with the Hiroshima Institute of Technology and Kyoto University, Sumitomo Forestry proposed an Afforestation Business Model for Developing Nations Using Satellite Data, and it was selected for the Space Open Lab in fiscal 2008. The Industrial Collaboration Department of the Japan Aerospace Exploration Agency (JAXA), an independent administrative organization, administers the Space Open Lab project. Research on the project was conducted jointly with JAXA through the end of fiscal 2010.
Based on knowledge gained from this joint research, the Company has been developing a plantation development support tool and conducting feasibility studies using satellite information in the Company's large-scale industrial plantation operation in plantation forest areas of West Kalimantan in Indonesia. The satellite data has provided a detailed map of the land candidates for plantation forests, and it has helped with forming estimates of the pace of growth of forests that have already been planted. In these ways, the satellite data can increase the efficiency of plantation forestry operations.
On May 23, 2008, PT. Rimba Partikel Indonesia’s (RPI) wood biomass power generation business, which primarily uses lumber mill offcuts and sawdust as fuel, was registered by the CDM Executive Board at the United Nations as a Clean Development Mechanism (CDM)1 project.
The generator, a wood biomass model with an output capacity of four megawatts, is expected to reduce annual CO2 emissions by 15,000 tons compared to the diesel generator it replaces.
Following an assessment by the United Nations, in March 2011, CER2 credits for 10,982t-CO2 were issued for the fiscal 2009 portion. Many CER credits issued to date have been for reducing CFC gas and nitrogen oxide, or for reducing CO2 emissions by using hydroelectric, wind power and other forms of clean energy. This time, the CER credit was issued for RPI’s efforts in using wood biomass energy, an area that has not been cited often for credits in the past.
During fiscal 2011, the Company sold credits worth 6,600 tons of CO2 to companies within Japan from the credits issued to it in March of the same year.
The CER credits issued for the Company’s various businesses are being used for measures to help alleviate global warming, such as for carbon offsetting and emissions rights trading schemes.
By operating a biomass power generation facility that uses industrial waste wood generated by thinning forests or demolition of buildings, the Company promotes recycling of timber, efficient use of forest resources, and contributes to stopping global warming by reducing CO2 emissions.
Sumitomo Joint Electric Power Co., Ltd., Fuluhashi EPO Corporation, and Sumitomo Forestry jointly established Kawasaki Biomass Electric Power Co., Ltd. in Kawasaki City, Kanagawa Prefecture, to operate a biomass power generation facility using woodchips as fuel. Japan Bio Energy Co., Ltd., a woodchip supply company, was also established in a nearby location. The Kawasaki Biomass Electric Power Co., Ltd. started operations in February 2011 as the largest biomass power generation business in Japan.
The facility is able to generate 33MW of power, which means it can supply power for approximately 37,000 households consuming a typical amount of power, or for about 100,000 people. Moreover, the facility is contributing to society by supplying power to help alleviate the power shortages that have occurred in Japan following the Great East Japan Earthquake of March 2011.
In order to clear the strict environmental standards established by Kawasaki City, Kawasaki Biomass Electric Power Co., Ltd. has installed environmental equipment that no other regional biomass power facility uses, including flue gas desulfurization equipment, an exhaust gas denitrizer, and a bag filter. Moreover, as a city-type biomass power generation facility it is working to improve the atmospheric environment.
Japan Bio Energy makes woodchips out of wood waste collected from the construction of homes, and supplies it to Kawasaki Biomass Electric Power Co., Ltd. as a fuel for its power generators. The chip factory and power plant are located next to each other, dramatically cutting the amount of energy used to transport the woodchips.
Japan Bio Energy will work to secure biomass fuel to ensure stable power generation at maximum output, and also develop other biomass fuels from forest resources and other unused biomass sources, such as food waste.
The Japan Verified Emission Reduction (J-VER) system, an offset credit promoted by the Ministry of the Environment as a measure to combat global warming, certifies carbon offset credits for domestic projects that reduce emissions of or absorb greenhouse gases, in an amount equivalent to the amount of emissions reduced or gases absorbed. The use of J-VER offset credits, a business model of utilizing offset credits to improve profitability of forestry management, contributes to the revitalization of Japan's forests.
In July 2009, a Company-owned forest* (Miyazaki Prefecture) was registered under the J-VER system as the first Sustainable Forestry Management Promotion-Type Project. Following validation, the J-VER credits issued were used to offset CO2 emissions generated at exhibitions and other events. Under the J-VER system, in fiscal 2009 and fiscal 2010 a combined total of 4,234t-CO2 worth of credits were issued to the Company. As the area within Miyazaki Prefecture covered by the system was expanded in order to meet the demand for credits, in March 2012 the Company was issued with credits worth 9,441t-CO2.
Continuing on from 2010, in July 2011 Sumitomo Forestry sold J-VER offset credits worth 30t-CO2 to Ochisangyo Co., Ltd. These credits were used to offset 1kg of CO2 per visitor to Ochisangyo’s “I Love Home Fair” events, which it held at various locations in West Japan. In total, 24.22t-CO2 was offset for 24,220 people. The remaining credits will be used at other events and conferences sponsored by the company. The Company will once again offer credits to Ochisangyo in fiscal 2012.
Sumitomo Forestry considers REDD+1, which is currently being investigated by the United Nations, and the Bilateral Offset Credit Mechanism (BOCM), which the Japanese Government plans to introduce from 2013 as a new mechanism for credits, to be promising business opportunities that warrant close examination. Therefore, with an eye to these frameworks the Company is currently looking into the feasibility of initiatives in Vietnam and Indonesia for the regeneration of degraded forests or those destroyed by forest fires, and also into initiatives to reduce emissions of greenhouse gases.
In 2011, the Global Environment Centre Foundation was contracted by the Ministry of the Environment to carry out the New Mechanism Feasibility Survey. As part of this, the Company has been conducting a feasibility survey for measures to protect and regenerate forests in the Son La Province of West Vietnam, where forests have been degraded due to field burning, and also for reducing greenhouse gas emissions through biomass power generation using timber procured from these sustainable forests. A large area of forest in this area has been degraded, but as forests play an important role here as a water source for the hydro-electric dams that are dispersed throughout the region, there is an urgent need for them to be protected and regenerated. In addition, this region is one of the most deprived in Vietnam, and the launch of a forest preservation and regeneration project will contribute to environmental protection and sustainable development in the region, while the Company is aiming to develop projects that can acquire emissions credits in Japan. The Company is currently collaborating with the relevant Vietnamese government authorities, the Vietnam University of Forestry, and JICA as it continues with its survey.
Large volumes of carbon accumulate in peatlands. When this land is developed for farming, it must be dried by drainage and as a result, the microorganisms in the soil decompose, which in turn causes the accumulated carbon to be released into the atmosphere as CO2. In addition, fires can occur in peatlands that have been dried, which causes large quantities of CO2 to be released into the atmosphere. Both of these forms of CO2 emissions contribute to global warming.
In fiscal 2011, the Ministry of Economy, Trade and Industry commissioned a survey on the feasibility of reducing greenhouse gas emissions through measures to prevent large-scale fires in the peatlands in the central part of Kalimantan Province, Indonesia. Sumitomo Forestry collaborated with Sumitomo Corporation and Shimizu Construction Co., Ltd. to carry out the survey, its role being to investigate methods of regenerating the vegetation that would also benefit the local people and economy. It was able to contribute to the project through constructing a new mechanism that can help prevent global warming by preserving the peatland and ensuring that it is used appropriately.