Energy Conservation Measures in the Industrial Sector

(A) History of energy conservation measures for industrial sector

Since the oil crisis, Japan’s industrial sector has played a central role in the efficient use of energy. Due to the efforts, the sector has successfully maintained almost the same energy consumption level as in the oil crisis despite the growing output. The sector accounts for nearly 45 % of the total energy demand in Japan. Despite those proactive efforts, there was a growing awareness that more measures were necessary in order to take more effective actions on global environmental issues. In June 1997, Japan Business Federation (Keidanren) announced the “Keidanren Voluntary Action Plan on the Environment”, aiming to promote the efficient use of energy.

As a national policy, the Law Concerning the Rational Use of Energy (Energy Conservation Law) was revised to reinforce the sector’s voluntary energy management. The revision of 2002 expanded the range of the “Type 1 Designated Energy Management Factory” designation, which had been limited to five industries such as the manufacturing industry, to include all industries. Through the revision, business operators became obligated to submit periodic reports, who own factories classified as “Type 2 Designated Energy Management Factory”. The revised law came into force on April 1, 2003.

In unison with the revision of the Energy Conservation Law, new criteria to assess energy use of factories and business offices were enforced on April 1, 2003, which were to control inefficient electric power facilities, to promote the implementation of the cogeneration system, which is highly energy efficient and to make good use of ESCO companies.

In 2005, the divisions of heat and electricity, which were separated in the past, shall be integrated for control purposes in view of today’s actual circumstances at factories and business establishments. The revised law came into force on April 1, 2006.

Moreover, regulatory structure was changed from regulating each factory or workplace to regulating the company wide management in 2008. The amendment obliged a company who uses a certain amount of energy as the whole company to regulate all of its factories and workplaces it has (the regulation is also introduced to a franchise chain such as convenience stores and restaurants, considering it to be a single company). This revised law came into force partly on April 1, 2009 and wholly on April 1, 2010.

In addition, there are financial incentives such as low interest loan programs to boost investment in developing energy efficient products and technologies under the law concerning energy conservation and recycling assistance and tax breaks under the tax measures to promote the investment in restructuring the country’s energy supply-demand.

(B) Relevant legislation

[Measures based on the Law Concerning the Rational Use of Energy]

(a) Enactment of a Basic Policy Concerning the Rational Use of Energy (Cabinet decision announced by the Ministry of Economy, Trade and Industry (METI) on 31 March 2009)

(b) Criteria for Business Operators on the Rational Use of Energy for Factories etc. (METI Announcement No.66 dated on 31 March 2009)

(c) Guidelines for Preparing Medium- and Long-Term Plans by the Type 1 Specified Business Operator that Install Factories for their Operations in the Manufacturing Industry (Announcement No.1 by Ministry of Finance, Ministry of Health and Welfare, Ministry of Agriculture, Forestry and Fisheries, Ministry of International Trade and Industry, and Ministry of Transportation dated on 25 February, 1999)

(d) Guidelines for Preparing Medium- and Long-Term Plans by the Type 1 Specified Business Operator that Install Factories for their Operations in the Mining Industry, Electricity Supply Industry, Gas Supply Industry and Heat Supply Industry (MITI Announcement No.108 dated on 25 February 1999)

(e) Guidelines for Preparing Medium- and Long-Term Plans by the Type 1 Designated Business Operator (except the Water Supply Industry, Sewer Industry, and Waste Processing Industry) (Announcement No.1 by Ministry of Education, Culture, Sports, Science and Technology, Ministry of Health, Labour and Welfare, METI, Ministry of Land, Infrastructure and Transport dated on 26 February 2004)

(f) Guidelines for Preparing Medium- and Long-Term Plans by the Type 1 Designated Business Operator (the Water Supply Industry, Sewer Industry, and Waste Processing Industry ) (Announcement No.1 by Ministry of Health, Labour and Welfare, METI, Ministry of Land, Infrastructure and Transport and Ministry of the Environment dated on 26 February 2004)
 

[Supporting measures]

(a) Support based on the Energy Conservation and Recycling Support Law

(b) Low-interest financing by the Development Bank of Japan, etc.

(c) Tax system to promote investment to reform the energy supply and demand structure

(d) Support for business operators who introduce leading-edge energy conservation equipment

(e) Advisor business regarding introduction of leading-edge energy conservation technologies

[Commendation, dissemination and publicity activities]

(a) Commendation toward excellent energy control-designated factories

(b) Conduction of the ENEX Exhibition, a general exhibition of energy conservation technologies and equipment, etc.

[Technological development]

(a) Study to lead basic technologies for the rational energy utilization

(b) Development of practical application of technologies to rationalize energy utilization

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