Electricity benchmark under the Energy Conservation Act to be reviewed, starting with FY2027 results
On August 18, the Agency for Natural Resources and Energy (ANRE) of the Ministry of Economy, Trade and Industry (METI) indicated its intention to review the “Benchmark system” under the Energy Conservation Act for electricity supply and coal fire electricity supply businesses,etc.
Given that the proportion of businesses achieving the target under the current system exceeds the assumed level of 10-20%, ANRE is moving towards raising the target level.
It was proposed at the “Working Group(WG) on Standards of Judgment for Factories, etc. under the Advisory Committee for Natural Resources and Energy” on the same day. The WG will compile the new benchmark index and standard proposal by the end of the year and revise the public notice of the Energy Conservation Act. The periodical report with new benchmarks by businesses is expected to start from FY2028 based on the FY2027 results.
The energy conservation act requires businesses to make efforts to improve energy consumption intensity by at least 1% annually on a five-year average basis, and establishes benchmark indicators for energy consumption efficiency and medium- to long-term benchmark levels for specific industries.
According to the ANRE, under the current benchmark standards, 50% of business operators in electricity supplies and coal fire electricity supplies achieved the target. With the revision, the target standards will be changed to the level that only the top 10-20% can achieve.
At the meeting, ANRE also proposed establishing a system to rank businesses according to their share of non-fossil electricity use. The agency is expected to finalize a draft of the system within FY2026 and apply it starting with the 2028 periodic reporting.