# Japan accelerates grants for rare-earth-reduced robot motor magnets under economic security act *METI enforces tightened supply-plan standards for heavy-rare-earth substitution and drive-motor manufacturing lines across industrial automation supply chains.* **Published:** September 1, 2026 **By:** Yui Kobayashi **Section:** Trade & Industrial Policy — Japan **Format:** Policy Tracker **Confidence:** high **Source:** https://eastasiabrief.com/trade-policy/japan-accelerates-grants-rare-earth-reduced-robot-motor-magnets-142 **Publisher:** East Asia Brief (https://eastasiabrief.com/) --- ## What to know - The revised screening manual establishes mandatory domestic processing standards and material substitution metrics for manufacturers seeking funding under the Economic Security Promotion Act. ![Industry professionals examine digital schematics and technical data on a screen in a conference room. (AI-generated image)](https://eastasiabrief.com/media/2026-08-31-4c4333adc14e.webp) *Industry professionals examine digital schematics and technical data on a screen in a conference room. (AI-generated image)* Japan's Ministry of Economy, Trade and Industry published updated execution criteria on August 28, 2026, for capital expenditure subsidies targeting heavy-rare-earth-free permanent magnets and high-efficiency drive motors used in industrial robots. The revised screening manual establishes mandatory domestic processing standards and material substitution metrics for manufacturers seeking funding under the Economic Security Promotion Act. Under the framework established in December 2022, the Japanese Cabinet designated permanent magnets, machine tools and industrial robots, and critical minerals as Specified Critical Materials to shield manufacturing from supply disruptions. The government operates the program through the Stable Supply Support Fund managed by the New Energy and Industrial Technology Development Organization, known as NEDO, which disburses capital expenditure and research grants. To qualify for subsidies of up to one-half of capital costs, component suppliers must submit formal supply security plans demonstrating verifiable reductions in heavy rare earths, specifically dysprosium and terbium. METI first issued its supply assurance guidelines for permanent magnets in January 2023 and enacted a revised policy directive on June 23, 2025, to prioritize magnet alloy processing outside monopolized refining jurisdictions. The companion policy for machine tools and industrial robots, updated in March 2024, explicitly linked servo motor actuators with upstream magnetic materials to prevent single-point component bottlenecks across factory automation systems. Japanese robot manufacturers consume high-coercivity neodymium-iron-boron sintered magnets across multi-axis articulation joints, precision gearboxes and direct-drive servomotors requiring continuous thermal resistance. Standard high-output servomotors rely on heavy rare earths to maintain magnetic stability under operating temperatures exceeding 150 degrees Celsius, exposing precision automation builders to mineral export restrictions. The METI directive requires certified applicants to deploy grain boundary diffusion techniques, hot-deformation processing, or iron-nitride and ferrite magnetic alternatives that eliminate dysprosium usage entirely. The certification registry shows progressive approvals across the industrial supply chain since the program began operations. METI approved its first permanent magnet supply plan on August 25, 2023, granting capital funding to Aichi Steel for domestic magnetic material fabrication facilities. Shin-Etsu Chemical secured supply plan approval on April 9, 2024, followed by an expanded certification on April 30, 2025, to connect domestic finishing lines with rare-earth separation capacity in Vietnam. Daido Steel and its subsidiary Daido Electronics received certification on April 25, 2024, to scale manufacturing lines for hot-deformed, heavy-rare-earth-free neodymium magnets designed for precision drive motors. Upstream alloying capacity received direct support on July 24, 2024, when METI approved Santoku for domestic production of high-purity rare-earth alloys and raw metals. The ministry expanded the certification perimeter on February 17, 2026, approving a joint supply plan submitted by Honda Motor, Hitachi Astemo and Daido Steel covering integrated drive motor assemblies and specialized magnetic inputs. For global automation suppliers operating in Japan, the August 28 criteria require capital expenditure projects to verify physical traceability back to smelting facilities operating outside restricted export jurisdictions. The revised screening guidelines stipulate that industrial robot component vendors must demonstrate commercial qualification timelines with domestic motor assemblers within 36 months of grant disbursal. METI also introduced strict equipment retention covenants requiring subsidized machinery lines to operate for a minimum statutory depreciation period of seven years without redeployment outside Japan. Foreign-headquartered component makers maintaining manufacturing subsidiaries in Japan remain eligible to apply for NEDO grants if their manufacturing facilities execute physical value-add inside Japanese territory. The policy shift directly affects industrial robot builders, including Fanuc, Yaskawa Electric, Mitsubishi Electric and Harmonic Drive Systems, which rely on secure access to high-torque servo motors. Drive-motor manufacturers face immediate compliance obligations to register upstream supplier rosters with METI when filing supply assurance certificates for domestic procurement credits. The ministry established a secondary audit track for joint venture consortia, allowing automotive tier-1 suppliers and robotics component makers to submit consolidated supply security plans. Consortium applications require binding commercial off-take agreements covering at least three consecutive operating years to ensure subsidized domestic capacity reaches target factory floors. The funding rules exclude general-purpose induction motors, focusing capital disbursements entirely on permanent magnet synchronous motors, axial-flux drives and specialized direct-drive actuators designed for automated machinery. METI allocated 120 billion yen ($820 million) to the broader permanent magnet and industrial machinery economic security fund tranche administered through NEDO. The grant program covers equipment procurement costs, cleanroom construction, sintering furnaces, chemical recovery systems and magnetic orientation testing machinery installed at approved domestic plants. Applicants must present operational safety protocols for recycling scrap sintered magnets and recovering light rare-earth fractions during machining and surface-coating processes. The ministry stated that field inspections on approved capital expenditure projects will occur biannually through designated NEDO engineering audit teams. Applications under the updated robot drive-motor and permanent magnet criteria remain open through the final fiscal 2026 intake window ending on November 30, 2026. ## Impact map | Event | Korea | China | Japan | Global impact | | --- | --- | --- | --- | --- | | Japan magnet and robot motor subsidies | robotics component makers monitor Japanese supply chains | heavy rare earth export leverage reduced | domestic motor magnet capacity subsidized | automation equipment sourcing diversified | ## In this story - **Companies:** Daido Steel, Shin-Etsu Chemical, Aichi Steel, Hitachi Astemo, Fanuc, Yaskawa Electric - **Tickers:** 5471.T, 4063.T, 5482.T, 6954.T, 6506.T - **Exposed:** Honda Motor, Mitsubishi Electric, Harmonic Drive Systems, Santoku - **Policy:** Subsidies, Economic Security, Supply Chain - **Impact:** Capex, Supply Chain, Compliance, Cost Structure ## Primary sources 1. meti.go.jp 2. e-gov.go.jp --- Cite as: East Asia Brief, "Japan accelerates grants for rare-earth-reduced robot motor magnets under economic security act," September 1, 2026. https://eastasiabrief.com/trade-policy/japan-accelerates-grants-rare-earth-reduced-robot-motor-magnets-142