Chronicles of Energy Conservation Laws
Legislation in 1979
The two oil crises in the 1970s triggered legislation of the Law concerning the Rational Use of Energy (hereinafter referred to as “the Energy Conservation Law”) in June 1979 (enforced in October 1979) in order to promote the initiatives on energy conservation to reduce the total energy demand.
[Main contents of the law]
1. Measures for factories
The law provides specific criteria (guidelines) for energy conservation for factories. Factories whose energy consumption is very large are regulated as designated energy management factories and obliged to appoint energy managers and record energy utilization. If required, a recommendation, etc. may be made for necessary measures to be taken for energy conservation.
2. Measures for buildings
The law provides guidelines for energy conservation in buildings. For violation, guidance, advice and guiding principles are made. For serious violations, the name of the company may be announced to the public.
3. Measures for machinery and equipment
The law provides guidelines for the energy consumption efficiency of the equipment consuming significant amount of energy, such as motor vehicles or air conditioners, etc., and if required, recommendations may be made for improving performance. Besides, there is an obligation for the labeling of energy consumption efficiency.
Amendment in 1983
In the final report of the second Provisional Council on the Public Administration System, released in March 1983, a qualification system was issued on the agenda as part of consolidating and streamlining the process of license approval and issuance, etc., and suggestions were made with regards to the transfer of clerical work to the private sector. In response, the amendment of the law concerning simplification, rationalization, and consolidation of clerical work was enacted in December 1983 (enforced in December 1983) to cover 14 ministries and encompass 58 other laws. The amendment allowed the Minister of Economy, Trade and Industry to designate an organization to perform clerical work related to the examination for energy managers. In response to that, the Energy Conservation Center, Japan was appointed as the designated examination body of the examination for energy managers in April 1984.
Amendment in 1993
The U. N. Conference on Environment and Development (UNCED), also known as the Earth Summit, was held in June 1992 in Rio de Janeiro and raised concerns over global environmental issues, which led to the amendment of the law enacted in March 1993 (enforced in April 1993).
[Major items amended]
1. Revision of the purpose of the law
With a view to dealing with global environmental issues, the purpose of the law was revised from “in consideration of Japan’s energy situation in which there is no choice but to depend on imports from abroad for fuel resources” to “to meet the economic and social environment of energy at home and abroad”
2. Establishment of fundamental policies
New fundamental policies concerning energy conservation were established along with a call for energy conservation efforts by all energy users.
3. Mandatory periodic report, etc.
The law adopted a mandatory periodic report to be made by the designated energy management factories. It also adopted measures including penalties so as to guarantee effective efforts for energy conservation regarding factories, buildings, and machinery and equipment.
4. Miscellaneous
The responsibility to promote the development and implementation of energy conservation technologies were added to the activities of the New Energy and Industrial Technology Development Organization (NEDO).
Amendment in 1998
Under the circumstance that the energy consumption in and outside Japan continued to increase considerably and concerns grew further over the impact which the large amount of energy consumption had on the environment, the amendment of the law was enacted in June 1998 (enforced in April 1999).
[Major items amended]
1. Creation of a new category as to Type 2 designated energy management factory
Along with Type 1 designated energy management factory, the category of Type 2 designated energy management factory (annual fuel consumption: greater or equal to 1,500 kl, annual electricity consumption: greater or equal to 6 million kWh) was created as a new category targeting factories in special need of promoting the rational use of energy.
2. Addition of an obligation for Type 1 designated energy management factories to submit a medium- to long-term plan
The amendment obliged Type 1 designated energy management factories to submit a medium- to long-term plan on the rational use of energy.
3. Measures for Type 2 designated energy management factories
It was obliged for Type 2 designated energy management factories to appoint an energy management officer, to attend periodical training courses, and to record the status of energy use.
4. Introduction, etc. of the “Top Runner” program
(a) With regard to the machinery and equipment specified by the Enforcement Ordinance (designated products), the Minister of Economy, Trade and Industry shall set the judgment standards of energy consumption efficiency for manufacturers, etc. of those products in consideration of the performance, etc. of the most energy efficient products commercially available in the market.
(b) If a manufacturer, etc. who had received recommendations for improvement in the performance of the designated products did not follow them, the Minister of Economy, Trade and Industry may take measures including public announcement and order against that non-compliance.
Amendment in 2002
In order to strengthen measures, etc. for the commercial sector, etc. being on the remarkably increasing trend in energy demand, the amendment of the law was enacted in June 2002 (enforced in April 2003).
[Major items amended]
1. Abolition of the restriction of the category subject to Type 1 designated energy management factory
The category of Type 1 designated energy management factory that had targeted five manufacturing industries, etc. was expanded to all industries.
2. The creation of exceptional provision with regard to the obligation to appoint energy managers
With this amendment, it is stipulated that in terms of large office buildings, which are newly added to the category of Type 1 designated energy management factory, it is not necessary to appoint personnel certified as energy manager for each business establishment but they have only to participate in the process of drawing up a medium- to long-term plan.
3. Periodic reporting of Type 2 designated energy management factory
With this amendment, Type 2 designated energy management factories were obliged to make periodic reports.
4. Obligation for the designated buildings to take energy conservation measures
The owner of a designated building (buildings larger or equal to 2,000 m2 excluding residential buildings) shall report energy conservation measures. Authority to provide guidance and advice on buildings shall be transferred from the Minister of Land, Infrastructure and Transportation to administrative agencies in charge (heads of local authorities, etc. who allocate supervisors as the Building Standard Law stipulates).
Amendment in 2005
The enforcement of Kyoto Protocol in February 2004 caused the urgent amendment of the law to attain the Japan’s GHG emission reduction target committed at COP3. The amendment of the law was enacted in August 2005 (enforced in April in 2006).
[Major items amended]
1. Integrated regulation of heat and electricity for designated energy management factories and offices
The regulatory divisions of heat and electricity for factories and offices are abolished and integrated into a single amount of energy (to expand the designated energy management factories).
2. Strengthening energy conservation measures for residential buildings and construction sector
It is obliged that the owners of the designated housings and buildings whose floor space are 2,000 m2or more shall be responsible to report on sufficient energy efficiency measures in terms of the standards for the rational use of energy, taken on new construction and large-scale repair, etc.
3. New obligations imposed on consigners and carriers (cargoes and passengers) for the transportation sector
It is obliged that transportation companies both in cargo and passenger as well as cargo owners which are over a given level of business scale shall be responsible to draw up energy conservation plans and report the amount of energy consumption, etc. every year.
4. Obligation for energy suppliers and equipment retailers to make efforts to promote and disseminate energy-saving information
In order to promote actively providing the consumer with information on energy conservation, it is institutionalized that energy suppliers such as electric companies, gas companies, etc. shall make efforts to disseminate highly energy-efficient equipment and publish information on the implementation and effects of energy conservation activities. It is also institutionalized that retailers of home electric appliances, etc. shall make efforts to display their energy efficiency performances in order for the consumer to easily get the information on annual electric consumption, fuel cost, etc. of those appliances at a store.
Amendment in 2008
The proposal by the Prime Minister, called “Cool Earth 50”, made at the Heiligendamm Summit led to the amendment of the law to strengthen the energy conservation measures in the industrial and residential sectors. The amendment of the law was enacted in May 2008 (enforced partly in April 2009 and wholly in April 2010).
[Major items amended]
1. Regulatory Expansion in the Industrial Sector (enforced in April 2010)
Regulatory structure is changed from regulating each factory or workplace to regulating the company wide management. The amendment obliges 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). Besides, it is stipulated that the activities are totally evaluated considering the benchmark for each sector, joint energy conservation activities, etc. Moreover, it is obliged that specified business operators and specified chain business operators shall appoint one energy management control officer, who may be selected from board members having a voice in the business operation, and one energy management planning promoter, who will assist the energy management control officer practically, in order to promote company-wide energy management system.
2. Strengthening energy conservation measures for residential sector (enforced in April 2009)
While strengthening the measures for large residences and buildings (introduction of orders in addition to instructions and notices), it is newly obliged that owners of certain medium and small-sized residences and buildings shall be responsible to report. Additionally, the government introduces measures to encourage companies engaged in the construction and sales of residences to improve energy conservation performance of the residences. It is also stipulated that indication of the energy conservation performance of residences and buildings shall be promoted.
Amendment in 2013
After the Great East Japan Earthquake in 2011, Japan was directly faced with a tightening of its electric power supply and demand situation. In addition to strengthening the rationalization of energy use (securing the effective utilization of fossil fuels by improving energy efficiency) which it had been conducting from before, energy management which incorporating awareness of the balance of the electricity supply and demand (including time concepts such as peak measures) was required. Further, it was necessary to enhance measures for improving the energy conservation performance of residences, buildings, facilities and equipment in the commercial and household sectors where energy consumption had been particularly increasing.
Against this background, the Act was revised to add measures relating to (1) the promotion of electricity demand leveling and (2) the expansion of the Top Runner Program to cover building materials, etc. (promulgated on May 31, 2013). Additionally, government ordinances, ministerial ordinances, and notifications were revised following this in order to realize each of the measures. Specific details are given below.
[Major items amended]
1. Expansion of Top Runner Program to cover building materials, etc. [Enforcement on December 28, 2013]
Stipulation of “insulating materials” and “sashes and multilayer glazing” as subjects of the Top Runner Program for building materials
“Insulating materials (extruded polystyrene foam, glass wool, and rock wool)” (effective from December 28, 2013) and “sashes and multilayer glazing” (effective from November 30, 2014) were newly stipulated as subjects of the Top Runner Program for building materials, and energy conservation standards, etc. were formulated.
[Other items amended]
1. Measures contributing to the improvement of the performance of energy-consuming equipment, etc. [Enforcedment on November 1, 2013]
“Three-phase induction motors” and “bulb-type LED lamps” were stipulated as subjects of the Top Runner Program for energy-consuming equipment, etc., and energy conservation standards, etc. were formulated.
Amendment in 2014
[Major items amended]
1. Promotion of electricity demand leveling* [Enforcedment on April 1, 2014]
* “Electricity demand leveling” is the “reduction of variations in the electricity demand caused by seasons and time bands”.
1) Formulation of electricity demand leveling evaluation intensities as new evaluation indices
The “Energy Conservation Guidelines for business operators relating to the rational use of energy in factories, etc.” were reviewed so that business operators taking measures which contribute to the leveling of electricity demand do not receive disadvantageous evaluations under the Act, and electricity demand leveling evaluation intensities were formulated as new evaluation indices.
2) Setting of electricity demand leveling time bands
The time bands during which promotion of the leveling of electricity demand are required were set uniformly nationwide in the summertime (July to September) and the wintertime (December to March) from 8:00 a.m. to 10:00 p.m.
3) Formulation of the guidelines for business operators relating to measures contributing to the leveling of electricity demand in factories, etc.
To plan for the appropriate and effective implementation of measures contributing to the leveling of electricity demand, guidelines were formulated relating to the measures that should be taken by business operators, including the utilization of in-house power generating facilities or the application of fuel cells and heat storage systems.
4) Changes to periodical report forms
Based on the contents of 1 to 3, entry columns were added for reporting the electricity usage in the electricity demand leveling time bands, electricity demand leveling evaluation intensities and reasons for deterioration, and the activities implemented to contribute to electricity demand leveling.
[Other items amended]
1. Revision of the Energy Conservation Guidelines taking the opportunity of the publishing of ISO 50001 [Enforcedment on April 1, 2014]
Regarding the study of making use of ISO 50001 as the international standard in energy management systems, “Energy Conservation Guidelines for business operators relating to the rational use of energy in factories, etc.” were stipulated.
2. Simplification of online application procedures [Enforcedment on April 1, 2014]
1) Regarding the various document submissions under the Energy Conservation Act, it became possible to submit online applications requiring only authentication (free of charge) using an ID and password.
2) Regarding the submission of periodical reports, medium to long-term plans, and other plans, the type of usable external recording media that can be used was changed to optical disks (CDs and DVDs).
Amendment in 2016
1. Creation of unused heat application system [Enforcement on March 30, 2016]
To allow the purchase and use of externally generated unused heat in the business operator’s own factories to be evaluated as an energy conservation effort, it became possible to subtract this from the energy usage amounts in the calculation of the energy consumption intensities for periodical reporting. Following this change, an unused heat amount entry column was added.
2. Review of measures corresponding to the new installation of dedicated power generation equipment, and review of the benchmarking system in the electricity supply industry [Enforcedment on March 30, 2016]
Due to the revisions of the Electricity Business Act, the regulation targets were reviewed because it was anticipated that many business operators would newly enter the power generating business mainly by selling electricity following the recent liberalization of retail sales as well as the elimination of the classifications between the general and wholesale electricity industries.
Additionally, the benchmarking system in the electric power supply industry was reviewed. Following this, the electricity supply industry entry column was changed.
3. Start of benchmarking system for the convenience store industry [Enforcement on March 30, 2016]
A benchmarking system was started in the convenience store industry from the FY2017 periodical reporting.
Amendment in 2018
1. Establishment of a certification system for collaborative energy-efficiency plan [Enforcedment on December 1, 2018]
The revision introduces the change to the evaluation system which assesses energy conservation efforts through collaboration among multiple businesses.
2. Establishment of a certification system for certified energy management control business operators [Enforcedment on December 1, 2018]
When a group company is certified for integrated energy conservation efforts, the parent company is authorized to fulfill its obligations under the Energy Conservation Law in an integrated manner.
3. Redefinition of consignors [Enforcedment on December 1, 2018]
A ‘consignor’ is redefined as ‘a person who determines the transportation method, etc. of freight by contract or other means, regardless of ownership of the freight,’ and net retailers etc., are also subject to the Energy Conservation Law to promote energy conservation efforts.
4. Reduced frequency for the submission of mid- to long-term plans [Enforcedment on December 1, 2018]
In the factory/office and transportation sectors, business operators with excellent energy conservation efforts to be reduced frequency for submitting mid- to long-term plans.
Amendment in 2023
1. Rationalization of energy use (expansion of the scope for rationalizing energy use) [Enforcedment on April 1, 2023]
The revised Energy Conservation Law requires rationalization of all energy use, including non-fossil energy. Accordingly, non-fossil energy is added to the subject of reporting. Expand the definition of “energy” to include renewable energy(non-fossil energy) in addition to the fossil energy covered by the Energy Conservation Act, which requires rationalization of all energy use.
2. Shifting to non-fossil energy [Enforcedment on April 1, 2023]
Specified business operators are required to prepare mid- to long-term plans regarding the goal of shifting to non-fossil energy and to submit periodic reports on the status of non-fossil energy use.
3. Optimization of electricity demand [Enforcedment on April 1, 2023]
Establishment of a framework for optimizing electricity demand based on supply and demand conditions, such as shifting electricity demand (increasing demand response) to the time period of increased renewable energy generation and controlling demand (reducing demand response) during power shortages.