Japan Energy Conservation
Handbook
2002 / 2003

Contents
1 World Energy Situation
1.1
Energy resource reserves (2000)
1.2
Primary energy consumption by energy resource
1.3
Primary energy consumption by region
1.4
Trend of primary energy consumption
1.5
Energy supply composition in major countries (2000)
1.6
Status of energy consumption in advanced countries
1.7
IEA's outlook of oil supply and demand
1.8
IEA's outlook of primary energy demand (BAU)
2 Global Environmental Issues
2.1
Climate change and energy consumption
2.2
International countermeasures to global warming
2.3
The Japanese policy framework to promote global warming measures
3 Energy Situation in Japan
3.1
Trends in energy demand and GDP
3.2
Primary energy supply component
3.3
Primary energy intensity per GDP
3.4
Trends in final energy consumption by sector
3.5
Outlook of final energy consumption
3.6
Outlook of CO2 emissions originating from energy
3.7
Outlook of primary energy supply
4 Energy Conservation Policy in Japan
4.1
Basic scheme of energy conservation policies
4.2
Law concerning rational use of energy
4.3
Evaluation criteria of factories for rationalization of energy use
4.4
Evaluation criteria of buildings for rationalization of energy use
4.5
Evaluation criteria of equipment for rationalization of energy use
4.6
Law for Energy Conservation and Recycling Support
4.7
Tax incentives for energy conservation
4.8
Financial assistance for energy conservation
4.9
Commendation system for energy conservation efforts
4.10
Publicity activities for dissemination of energy conservation
4.11
Energy audit
4.12
The International Energy Star Program
5 Energy Conservation in Each Sector
5.1
Energy conservation in the industrial sector
5.2
Energy conservation in the commercial/residential sector
5.3
Energy conservation in the transportation sector
5.4
Recent status and development for energy conservation
6 Institutional Organization
6.1
Ministry of Economy, Trade and Industry (METI)
6.2
Advisory Committee
6.3
The Energy Conservation Center, Japan (ECCJ)

Reference
Energy Calories (Japan)

1 World Energy Situation
1.1 Energy resource reserves (2000)
Oil
Proved recoverable reserves
(R)

1,046
billionbarrelsNatural gas

Coal

Uranium

150 trillion
m3

984.2 billion tons

3.95 million tons

North
America

3.4%

4.3

26.0

17.9

Central &South
America
Note 1)

11.7%

5.2

2.3

6.2

Allocation by region Europe

1.9%

3.5

12.4

4.8

Former
USSR

6.4%

37.8

23.4

29.4

Middle
East

65.3%

35.0

0.0

0.0

Africa

7.1%

7.4

6.2

18.6

Asia /
Pacific

4.2%

6.8

29.7

23.0

Annual production (P)26.2
billionbarrels(74.5
millionbarrels
per day)

2.4 trillion 4.34 billion tons Notem3
2)

Recoverable years (R/P)

39.9
years

61.0 years

Source227 years

BP statistics (year 2001)

35,000 tons

64.2 years Note 3)
OECD/NEA, IAEA
URANIUM(year 1999)

Note 1)
Mexico has been included in South & Central America since 2001, therefore, takeaccount of this inclusion when comparing with the records of the preceding years.
Note 2)
The annual production includes lignite.
Note 3)
Uranium stock is on hand, which makes the annual production lower than theannual demand (62,000 tons). Therefore, the recoverable years of uranium is the value of
proven recoverable reserves divided by the annual demand1.2 Primary energy consumption by energy resource(Unit: 1 million ton of oil equivalent; figures in parenthesis show ratio (%))Note) Others (new energy, etc.) are omitted, as they represent very small proportions.
Source) Prepared based on the "2002 EDMC Handbook of Energy & Economic Statistics inJapan"

1.3 Primary energy consumption by region(Unit: 1 million ton of oil equivalent)Note) Figures in parenthesis show ratio (%).
Source) Prepared based on the "2002 EDMC Handbook of Energy & Economic Statistics in Japan"

1.4 Trend of primary energy consumption(1) Primary energy consumption per capita
Index based on year 1971 = 100(2) Primary energy consumption per GDP
Index based on year 1971 = 100(3) World energy consumption (1999)

Source) Prepared from " 2002 EDMC Handbook & Economics Statistics"

1.5 Energy supply composition in major countries (2000)(1) Supply of primary energy (TPES) and composition ratio by energy source(Unit: % Values in parentheses are oil equivalent million ton.)

EP = Electric power
Note)1) The import and export of electric power are also included in the primary energy supply ( - in thegraph indicates excess of export).
2) Coal includes other solid fuels.
Source) OECD ENERGY BALANCES (1999-2000/ I EA)(Comment)
1) The ratio of petroleum is especially high in Japan and Italy, accounting for 50%.
3) In the U.S.A. and Germany, the percentage of coal is high at 24%.
4) In Canada, the percentage of hydraulic power is high at 17%.
5) In France, the percentage of nuclear power is especially high at 42%.

(2) Import dependence (2000)

Note) * indicates exports.
Source) Energy Balances of OECD Countries 1999-2000 (IEA)

(3) Final energy consumption and composition ratio by sector (2000)(Unit: % Values in parentheses are oil equivalent million ton.)(4) Electricity production and composition ratio by power source (2000)(Unit: % Values in parentheses indicate 100 million kWh.)

Source: OECD Energy Balances, 1999-2000

1.6 Status of energy consumption in advanced countries(1) Trend of energy consumption(Unit: %)Source) OECD ENERGY BALANCES(1999-2000)(2) Comparison of energy intensity per GDP

Note) Dollars are in reference to US$ in 1995
Source) OECD ENERGY BALANCES (1999 -2000)

1.7 IEA's outlook of oil supply and demand(Unit: million bbls./day)

Source) IEA / World Energy Outlook 2000

1.8 IEA's outlook of primary energy demand (BAU)(Unit: oil equivalent million ton)

Source) IEA / World Energy Outlook 2000

2 Global Environmental Issues
2.1 Climate change and energy consumption(1) Changes in annual average ground temperature in the world

Note)
Source)Source)Bar graph shows the value of respective fiscal years. Line graph shows 5-year runningaverages and straight line shows the trend of long-term period.
IPCC(1995)
Environmental white paper 2002 (edited by Environment Agency)(2) Global energy balance (Relative value to incident solar rays as 100)Note) Values in ( ) are estimated values when CO2 concentration is twice.
When the concentration of greenhouse effect gas such as CO2 increases, the energy flow shown in thedotted line becomes larger. This causes the rise of atmospheric temperature. It is said that if there were nocarbon dioxide or water vapor at all in the global atmosphere, the global temperature would be as low as -19
degC.
Source) "Meteorological Research Notes No. 160, Carbon Dioxide Special", Taro Matsuno, 1987,
Meteorological Society of Japan (partially modified).

(3) Increase of the carbon dioxide level and change in fossil energy consumption

Note)
CO2 levels in the past 1000 years, based on ice sheet core records (D47, D57, Siple station,
South Pole point), and CO2 levels since 1958, measured at Mauna Loa Observatory in Hawaii. Ice sheet
cores were all collected on the Antarctic Continent. The smooth curve is a 100-year running average. A
rapid increase of CO2 levels since the start of the Industrial Revolution is apparent, essentially in parallelwith the increase in CO2 emissions originating from fossil fuels (refer to the enlarged chart since fiscal
1850).
Source)
IPCC (1995), translated by the Meteorological Agency.
Source)Year 2000 Environmental White Paper (compiled by the Environment Agency)(4) CO2 emissions by country (2001)

Source: Energy & Economic Statistics in Japan (2004)

(5) CO2 per-capita emissions (1999)

Source: Energy & Economic Statistics in Japan (2004)

2.2 International countermeasures to global warming
Regarding global warming, accumulation of scientific knowledge is performed in IPCC
(Intergovernmental Panel on Climate Change) until now, and meanwhile arguments on its
international countermeasures have been made in COP (Conference of the Parties) of UNFCCC(United Nations Framework Convention on Climate Change) in terms of supplementing mutually
the related issues(1) IPCC : Accumulation of scientific knowledge
IPCC is a body organized by scientists in the world which WMO (World MeteorologicalOrganization) and UNEP (United Nations Environment Program) founded jointly as a place of thestudy about the global warming problem of a government level in November, 1988. In the reportcompiled for 1995, IPCC analyzed the climate change since the 19th century to find that global
warming has been already occurring due to increasing amount of emitted greenhouse gases after
the Industrial Revolution etc.
(2) UNFCCC : Study of international countermeasures
As IPCC being a place to accumulate scientific knowledge, on one hand we have UNFCCC as aplace to discuss and perform international countermeasures to a climate change. In UNCED(United Nations Conference on Environment and Development: commonly named "Earth
Summit") held in Rio de Janeiro in Brazil in June, 1992, a large number of the countries including
Japan signed UNFCCC. The purpose of this treaty is stabilizing the concentration of greenhousegases in the atmosphere, accordingly it is required that the amount of emitted greenhouse gases
should be controlled or cut down. UNFCCC was ratified by 50 countries and went into effect inMarch, 1994. Based on its effectuation, following COP1 held in Berlin and COP2 held in Geneva,
COP3 was held in Kyoto to adopt "Kyoto Protocol" which defined the reduction targets ofgreenhouse gases in the period from 2008 through 2012.

(3) IPCC report on global warming
Increase of CO2 % in the Air* 265 - 285 ppm before the Industrial Revolution (1750 - 1800)* 365 ppm in 1996
* Over 600 ppm estimated by the end of 2100
Rising of Sea Levels :* 10 - 25 cm has risen over the past 100 years.
* 9 - 88 cm will rise between 1990 - 2100.
Rising of the Earth's Average Temperature :* 0.3 - 0.6 •Z has risen over the past 100 years.
* 1.4 - 5.8 •Z will rise between 1990 - 2100.

Influences of Green House Gasses on Global Warming (1850-1990)

Source: IPCC Report in 2000

(4) COP3 outline of the Kyoto Protocol
COP3 (The 3rd Conference of Parties) of the UN Framework Convention on Climate Change washeld on December 1 - 11, 1997

38 Parties in Annex I :Australia, Austria, Belgium, Bulgaria, Canada, Croatia, Czech Republic, Denmark, Estonia, Finland,
France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Latvia, Liechtenstein, Lithuania,
Luxembourg, Monaco, Netherlands, New Zealand, Norway, Poland, Portugal, Romania, RussianFederation, Slovakia, Slovenia, Spain, Sweden, Switzerland, Ukraine, United Kingdom, USA, and 15 EU
member states combined.
Kyoto Mechanism

Enforcement and Effect2.3 The Japanese policy framework to promote
global warming measures
In November 1997, Japan complied towards COP3 with joint conference reports of the related
councils on global warming issues, which indicate the basic plans for global warming measures. Basedon the results of COP3 conducted in the following month, December, the Headquarters to Promote
Global Warming Measures, headed by the Prime Minister, was established in the Cabinet. In June
1998, the Headquarters established the General Principles to Promote Global Warming Measures,
which comprehensively compiled measures to prevent global warming to be urgently taken toward
2010, and the Government is promoting global warming measures in various policy fields to achieve
the target of reducing GHG emissions by 6% in Japan, by following the General Principles. In this way,
the General Principles comprise the basis of the future measures in Japan, and the system of thepolicy based on the General Principles is shown below.
The Headquarters to Promote Global Warming Measures also inspects the state of progress of
specific global warming measures, and reviews the content, as needed, to steadily carry out theGeneral Principles.

3 Energy Situation in Japan
3.1 Trends in energy demand and GDP

Change in GDP elasticity value of energy demand

Source) "Energy Production, Supply and Demand Statistics", "Annual Report on National
Account", "Outline of Electric Power Supply and Demand"

3.2 Primary energy supply componentNote) The year 2010 values are based on the prospects for long-term energy
supply and demand of General Resource Energy Investigation Committee(2001).(Case of counter measures)
The composition of fiscal year 2000 is:
Nuclear power12.4%
Natural gas 13.1%
Hydro/geothermal
3.6%
New energy, etc.
1.1%
Coal
17.9%
Oil
51.8%

3.3 Primary energy intensity per GDP

Source) "Energy Production, Supply and Demand Statistics", "Annual Report on National Account"(Index based on FY 1973 = 100)

3.4 Trends in final energy consumption by sector

3.5 Outlook of final energy consumption

3.6 Outlook of CO2 emissions originating from energy

3.7 Outlook of primary energy supply

4 Energy Conservation Policy in Japan
4.1 Basic scheme of energy conservation policies(1) Scheme of energy conservation policies(2) Outline of energy conservation policies
1. Present situation of energy conservation
In Japan, the government and people have been tackling thepromotion of energy conservation since the first oil crisis andas a result the energy intensity per GNP was 30% better than it
had been during the first oil crisis (FY 1973), which was aremarkable achievement.
However, in recent years, due to low level stabilization ofenergy price and change in the people's lifestyle caused a
pursuit of comfort and wealth, Japan's energy consumption
mainly in residential and commercial sector and transportation
sector has shown high growth; the annual average energy
growth rate of the past six years is as high as 2.0%.
On the other hand, Japan depends on imports as to most ofenergy supply and its energy supply is mainly supported byfossil fuels, whose reserves are limited. Because of thesereasons, Japan needs to increase its energy-saving efforts.
In addition, more than 90% of Japan's emission of carbon
dioxide is caused by energy combustion. Thus, with increasing
interest in global environment issues worldwide in recent
years, it has become essential to promote energy conservation.

2. The present situation of energy conservation policies
In 1998, the Japanese Government already revised "the Law concerning Rational Use of Energy(hereinafter referred to as the Energy Conservation Law)" with a recent change of economic and social
situation taken into account, and at the same time it newly established and enforced "a Law concerning
Rational Use of Energy and Recycled Resources Utilization (hereinafter referred to as the Energy
Conservation Assistance Law)" to solidify the policy basis.

1) Promotion of energy conservation measures(1) Introduction and promotion of energy conservation equipment and systems
For promotion of energy conservation equipment investment in industry and commerce, loan programs and tax reduction havebeen established (low interest loans by the Japan Development Bank and Smaller Business Finance Corporation, etc. and a tax
system for promotion of investment in reformation of energy supply and demand structure) by the Energy Conservation
Assistance Law.
(2) Acceleration of development and practical application of energy conservation
technologies.
To technologically ensure the practice of energy conservation in future, the R&D of technologies concerned with energy
conservation have been promoted under close liaison among industry, the government and academy.
(3) Formulation and proper application of guidelines based on the Energy Conservation Law
a. Industrial sector: Guidelines for factories, etc.
b. Transportation sector: Fuel consumption standards for automobiles, etc.
Fuel consumption standards for trucks, etc.
c. Commercial and residential sector:
Guidelines for buildings
Guidelines for residential housing
Addition of designated appliances and formulation of energy efficiency
guidelines(4) Enhancing people's awareness of energy conservation by publicity, etc.
a. Being thoroughly informed of various measures by the Council for Promotion ofEnergy and Resources Conservation Measures, such as "energy conservation in summer and winter."b. Preparing and distributing posters and pamphlets, holding symposiums andoffering information through mass media.
(5) Active promotion of an energy conservation labeling systema. In June 1995, Japan and the U.S.A. agreed to unify the standard and the indicating system of the International Energy Star
Program which is an energy conservation standard for office automation equipment from personal computers and the program
was enforced on October 1, 1995. Each of the industrial, residential and commercial, and transportation sectors is endeavoring topromote energy conservation through careful measures such as the above.
2) Promotion of international energy conservation measures
From an international viewpoint, Japan is engaged in the following activities by offering rich experiences, excellent technologies,
and know-how in energy conservation to the developing countries.
(1) For bilateral cooperation
a. Dispatch of experts
b. Acceptance of trainees
c. Implementations of model projects of energy conservation, for example, waste heat recovery in plants where large amounts ofenergy are consumed, such as iron and steel works and power stations.
(2) For multilateral cooperation
Use of the opportunity to exchange information and opinions through international organizations, such as IEA and APEC, toestablish international cooperation as much as possible.
3. Energy Conservation Policies in the Future
The 3rd Session of the Conference of the Parities to the United Nations Framework Convention on Climate Change (COP3) held in
Kyoto in December 1997 reached an agreement on an international framework for the prevention of global warming in the year
2000 and after. At the conference, Japan promised internationally to reduce its emission of greenhouse gases by 6% as comparedwith the 1990 level during the 2008-2012 period. To realize this international pledge, Japan established in December 1997 theHeadquarters of Task Force to Cope with Global Warming with the prime minister appointed as its head. This headquarters
adopted the "Guideline of Measures to Prevent Global Warming" which defined the policies to be promoted urgently by 2010. In
April 1999, the Law Concerning the Promotion of Measures to Cope with Global Warming was enacted, and the Japanese
government is now working in one body to prevent global warming. To control the emission of carbon dioxide derived fromenergy use, it is necessary to reinforce energy saving efforts greatly in the all sectors of industries, consumers and transportation.
In light of these situations, the ministers' meeting for the promotion of comprehensive energy policies adopted, in September
1998, the "Long-term Outlook for Energy Supply and Demand" which aimed at simultaneously achieving the three E's (energy
security, environmental protection and economic growth). This outlook includes an energy-saving policy for reducing energy
supply and demand by 56 million kL in terms of crude oil, and great efforts will be made to conserve energy according to thispolicy.

4.2 Law concerning rational use of energy(1) Objective
This law purposes to contribute to the sound development of the national economy through implementing necessary
measures for the rational use of energy in factories, buildings, and machinery and equipment, and other necessary
measures to comprehensively promote the rational use of energy, while it seeks to ensure the effective utilization of fuelresources that would meet the economic and social environment of energy at home and abroad.
(2) Energy covered by the Law"Energy" in this law means fuels such as oil, flammable natural gas, and coal, as well as heat and electricity produced byusing such fuels (excluding electricity generated by the renewable energy such as photovoltaic cells, wind power, etc.).
(3) Basic policies and obligations of energy users
The Minister of Economy, Trade and Industry shall establish and announce fundamental policies aiming at comprehensive
promotion of the rational energy utilization in respective fields. The main energy users in each field shall take account of thefundamental policy and make efforts to rationalize their energy use.
This is to comprehensively promote the rational energy utilization through the systematic formulation and the publicannouncement of the basic matters pertaining to the measures to promote the rational energy utilization.
(4) Measures for factories
In Japan, the amount of final energy consumption in the industrial and civil business sectors account for as much as 60% of
the total energy consumption in the country. Therefore, the active promotion of the rational energy utilization in factories
and business premises is important. To implement the law effectively, the following provisions were established;1)Evaluation criteria for business operators
The Minister of Economy, Trade and Industry shall establish and announce the subject of evaluation criteria regarding themeasures to be taken deliberately in order to achieve the goals towards the rationalization of fuel combustion, utilization
and recovery of waste heat, prevention of electricity loss by resistance etc, and the relevant goals: the subject of evaluation
criteria are targeted to those who conduct business activities and utilize energy in their factory / business premises(hereafter referred to as Factory) and are purposed that the rational utilization of energy in Factory would be implemented
appropriately and effectively.
This is to show a guideline of the individual and concrete measures about the basic matters stated in the basic policy and to
guide business operator to judge and conduct appropriate and effective implementation of the rational energy utilization in
Factory. (The new criteria is scheduled to be enforced on 1st April 2003.)
2)Guidance and advice
The competent minister (the Minister of Economy, Trade and Industry, and other minister(s) responsible for theundertakings of the relevant Factory. Hereafter the same.) may, when the minister finds them necessary, provide business
operators with guidance and advice about the rational energy utilization and by taking account for the subject of theevaluation criteria for business operators.
3)1st class designated energy management factories
The Minister of Economy, Trade and Industry may designate Factory which consumes large amount of fuel etc. or electricity(more than 3,000 kL of fuel per year in crude oil equivalent or more than 12 GWh of electric power per year) and belongs to
the fifth manufacturing industry as Type 1 designated Energy Management Factory from the view point that the rationalenergy utilization has to be promoted.
Those who establish such Factory shall appoint an energy manager to overseer the work related to the rational energy
utilization, prepare and submit a mid-to-long term plan, and report the status of their energy utilization to the competent
minister every year.
However, under the amended law in June 2002, it is applied to the business operators of large-scaled office buildings etc.
and of who were designated as Type 1 Designated Energy Management Factory that they may appoint, instead of
appointing an energy manager, a person, who has completed a designated training course that were conventionallyconducted in the past, as an energy officer to deal with day-to-day energy management, only if they include a participationof an energy manager at the time of preparing the middle-to-long term plan.

4)Instructions, announcement and order to make rationalization plans
If Type 1 Designated Energy Management Factory is judged to be in egregious breach of the evaluation criteria for energy
rationalization, the competent minister may instruct the factory operator to prepare a rationalization plan, and if the operator
does not obey the instructions, they can announce to that effect or give an order for taking any action to respond to the
instructions, after hearing the opinion of the council concerned.
5)Type 2 Designated Energy Management Factories
As for those factories other than Type 1 Designated Energy Management Factories whose consumption of fuels, etc. or electricity
is on a medium scale (whose annual consumption of fuels is l,500kL or more in terms of crude oil and whose annual electric
consumption is 6 million kWh or more), there is the need for promoting the rational use of energy in the same way as Type 1
designated energy management factories. Thus the Law provides that the Minister of Economy, Trade and Industry may
designate these factories as Type 2 Designated Energy Management Factories. The Law prescribes that those who manage Type
2 Designated Energy Management Factories shall appoint energy management officers, cause those appointed energy managers
to take an energy conservation course, and keep the record of the conditions of energy use, etc. However, the amended law inJune 2002 imposed an obligation to report the energy utilization status annually to the competent minister, changing theobligation of recording the energy utilization status stipulated in the former law.
6)Recommendation
If Type 2 Designated Energy Management Factory is judged to be in egregious of the evaluation criteria for energy rationalization,
the competent minister may recommend necessary measures for the rational use of energy.

[Classification of designated management factory]

4.3 Evaluation criteria of factories for rationalizationof energy use

(Based on "Standards for judgment for entrepreneurs regarding the rational use of energy at factories"
revised on January 25, 1999)

4.4 Evaluation criteria of buildings for rationalizationof energy use(based on Article 14 of "Energy Conservation Law")a. Hotels, hospitals or clinics, commodity merchandising stores, business offices, schools andrestaurants
Owners of five kinds of buildings as above shall make values obtained on the basis of the following
concepts lower than the standard ones shown in the attached table for each of the following
measures:1) Prevention of heat loss through external walls, windows, etc. of a building;2) Efficient use of energy concerning airconditioners;
3) Ensuring efficient use of energy concerning mechanical ventilating equipment except
airconditioners;
4) Efficient use of energy concerning lighting facilities;5) Efficient use of energy concerning hot water supply systems;
6) Efficient use of energy concerning elevators.
The equation for finding the standard value are as follows.
1) Prevention of heat loss through external walls, windows, etc. of a building;* Thermal load of the ambient indoor space:
Heat lost through external walls, windows, etc. for a year; total of heating and cooling load
generated by heat generated in the ambient indoor space.
The quantity of outdoor air taken in is presumed to be a constant calculated on the basis of thearea, etc.
2) Efficient use of energy concerning airconditioners;* Quantity of energy consumed for airconditioning:
Quantity of energy of a given air conditioner consumed to treat airconditioning load for a year
Virtual airconditioning load:
The quantity of outdoor air taken in is presumed to be a constant calculated on the basis of thearea, etc. Decrease in load by using exhaust heat recovery is not taken into account.
3) Ensuring efficient use of energy concerning mechanical ventilating equipment except
airconditioners;

* Virtual quantity of energy consumed for ventilation:
Quantity of energy necessary for covering the design ventilation volume on the presumption thatstandard values are set for the efficiency, total pressure, etc. of a fan and that there is no control made.
4) Efficient use of energy concerning lighting facilities;* Virtual quantity of energy consumed for lighting:
Quantity of energy consumed by lighting facilities on the presumption that standard values are set forthe power of lighting facilities and that there is no control made.
5) Efficient use of energy concerning hot water supply systems;

Note) In the case of 1), values obtained by multiplying the above values by the scale correction factor
shall be standard ones.
(Scale correction factor: a factor for correcting standard values to deregulate against small scalebuildings, etc.)

b. Residence
The owner of a residence (from a single house to an apartment house) shall make the following values in1) or 2) lower than those mentioned in the following attached table.

4.5 Evaluation criteria of equipment for rationalizationof energy use(based on Article 18 of "Energy Conservation Law")

a. Gasoline-fueled passenger car1) Target range
Gasoline-fueled car with riding capacity of 10 or under which received model designation

3) Target fiscal year
Fiscal 20104) Energy conservation effect *In fiscal 2010, improvement of efficiency by about 23% relative to fiscal 1995
* Note: Energy conservation effect is the weighted mean value based on current shipping ratios.
b. Diesel-powered passenger car1) Target range
Diesel-powered car with riding capacity of 10 or under which received model designation

3) Target fiscal year
Fiscal year 2005
4) Energy conservation effect *In fiscal year 2005, improvement of efficiency by about 15% relative to fiscal year 1995
* Note: Energy conservation effect is the weighted mean value based on current shipping ratios.

4.6 Law for Energy Conservation and Recycling Support
The spirit of this law is to take actions for assisting businesses who voluntarily tackle such activities as rational useof energy and utilization of recycled resources. The Contents concerned with the rational use of energy in the law
are described below. In the law, "the rational use of energy " is considered as a concept covering the utilization ofoil-substituted energy.
(1)Guidelines for efforts
The competent minister shall establish guidelines for voluntary efforts of businesses and building owners for therational use of energy.
(2)Specific business activities
The following three categories of activities are defined as "specific business activities", and any businesses, etc. whois going to execute these activities can prepare and submit an business plan to the competent minister, to obtainhis approval:
a. to install or improve the equipment contributing to the rational use of energy in a factory or other businesslocation belonging to any specific business category Note),b. to use any building material or to install or improve any equipment respectively contributing to the rational useof energy in the construction of a buildingc. to conduct R&D on the manufacturing technique of an industrial product contributing to the rational use ofenergy.
Note: The same business categories as covered by the designated energy management factory scheme (Section 1,
Article 6, Energy Conservation Law)
(3)Approval of activity plan
The competent minister shall approve the business plan if he recognizes that it satisfies the requirements properly
in reference to the guidelines for efforts stated in (1).
(4)Assistance measures
For the specific business activities conducted in conformity with the approved business plan, such assistancemeasures asa. very low interest finance Note 1),
b. bond under Industrial Foundation Improvement Fund
can be taken.
Note 1: Financial institutions (Development Bank of Japan, etc.) who lend the necessary funds have the interests
partially covered by Oil Special Account (budgetary action without any legal provision). The interest is far lower
than the lowest interest for the fiscal investments and loans (a. 1.8% for the specific activities of factories, etc, b.
1.85% for those of buildings, as of March 14, 2000).
(5)) Specific facilities
Heat supply facilities required for regionally constructing an effective energy utilization system such as large-scalecogeneration regional heat supply system or cascade heat utilization type industrial complex are defined as"specific facilities", and the borrowed funds required for installing or improving those facilities are covered by thebonds of the Industrial Foundation Improvement Fund.
(6)Enforcement of the law
The law was enforced on June 25, 1993, and remains in force for only 10 years.

4.7 Tax incentives for energy conservation(1) Tax system for promotion of investment in reformation of energy supply anddemand structure
Where businesses acquire equipment which contributes to efficient energy use and applies it tohis/her business within a year, he/she can choose either of the followings:
1) Tax exemption equivalent to 7% of the equipment acquisition cost (which should be not morethan 20% of the income tax or corporate tax payable.)2) Special depreciation of 30% of the equipment acquisition cost in the year of acquisition, in
addition to ordinary depreciation.
*Energy-conserving equipment*Equipment for general industries 91 units*Equipment for small and medium enterprises: 52 units(2) Certification system of specifications for equipment which promotes reform ofenergy supply and demand4.8 Financial assistance for energy conservation*1 Energy conservation promotion projects for the industrial sector are provided with interest subsidies from Oil
Special Account in Category (2). The preferential rate I is applied only to the projects that are given a loan during the period
when an application for interest subsidy is accepted.
*2 Energy conservation promotion projects for buildings are provided with interest subsidies from Oil Special Account in
Category (2). The preferential rate II is applied only to the projects that are given a loan during the period when an application
for interest subsidy is accepted.
*3 These projects are provided with interest subsidies from Oil Special Account.
DBJ: Japan Development BankODFC: The Okinawa Development Finance Corporation
NEF: North East Finance of Japan
JFS: Japan Finance Corporation for Small Business
PFC: People's Finance Corporation

4.9 Commendation system for energy conservation efforts

4.10 Publicity activities for dissemination of energy
conservation- Energy conservation day, energy conservation month, and general check-up day
for energy conservation
In order to promote energy conservation as a nationwide movement, the government hasestablished "Energy Conservation Day" on the 1st of every month, "Energy Conservation
Month" in February and "General Check-up Day for Energy Conservation" on the 1st ofAugust and December and has been continuing educational and publicity activities incooperation.

4.11 Energy audit(1) Energy audit for small and medium-sized companies
Energy conservation assessments of small and medium-sized companies began in 1955 andapproximately 5,600 assessments have been carried out nationwide.
a. Target companies
A capital of less than 100 million yen or a total number of employees of less than 300 persons
b. CostFree of chargec. Details of advising
Number of assessors: 1-2; number of days: 1-2
d. Items to be assessed
1) Advice on heat energy2) Advice on electric energy
e. Institutional organization: The Energy Conservation Center, Japan(2) Detailed energy audit
a. Target companies
Large and medium-sized companies
b. CostA fee is charged.
c. Details of assessment
Two to three experts perform a preliminary survey, which is then followed up by a detailed
survey of the production process. A list of areas in need of improvement is drawn up andprioritized. Concrete measures are suggested to address the priority of improvement plan, and a
proposal is set forth which presents the expected benefits of these measures as well as theinvestment required to implement them.
d. Institutional organization: The Energy Conservation Center, Japan

4.12 The International Energy Star Program
The international energy star program is intended for using common energy conservation standards
and a common logo in the approved countries (Japan and the USA). This has a form of mutual
attestation that the products satisfying the standards and having the logo stuck to them are also
effective in the other approved country.
Japan enforced it on October 1,1995.
(1) Object products
Personal computers, monitors, printers, fax machines, copying machines, scanners and multifunction
devices.
Japanese products satisfying the standards can have the international energy star logo stuck in theother approved country.
(2) Logo(3) Scheme

5 Energy Conservation in Each Sector
5.1 Energy conservation in the industrial sector(1) Energy consumption by manufacturing industries

Source) "Energy Production, Supply and Demand Statistics"(2) Energy intensity in major industries

Source) Prepared based on the 2002 Directory of EDMC Energy and Economic Statistics

5.2 Energy conservation in the commercial /residential sector(1) Energy consumption by energy sources(Unit: 1012kcal)

Source) Prepared based on the 2001 Directory of EDMC Energy and Economic Statistics
Source) Prepared based on the 2002 Directory of EDMC Energy and Economic Statistics

Note) Values stated below in the indicate percentage.
Source) "Household Energy Statistics Annual 2000", Residential Environment Planning & Research Center5.3 Energy conservation in the transportation sector(1) Energy consumption by major transportation means(2) Energy consumption share rate and transportation volume share rate by transportationmeans (2000)(A) Energy consumption share rate and transportation volume share rate in the passenger sector

Source) Prepared based on "2002 EDMC Energy/Economy Statistics Summary"(B) Energy consumption share rate and transportation volume share rate in the cargo sector

Source) Prepared based on "2002 EDMC Energy/Economy Statistics Summary"5.4 Recent status and development for energy conservation(1) BackgroundAt the Third Conference of the Parties to the UN Framework Convention on Climate Change (COP3), held in Kyoto in
December 1997, an agreement was reached on greenhouse gas emissions reduction targets for developed countries.
As part of this agreement, Japan pledged a 6% reduction in greenhouse gas emissions from the 1990 level (U.S.A. 7%
reduction and EU 8% reduction), to be achieved in terms of the average annual value for the 2008-2012 period. Japan's
target for energy-related carbon dioxide emissions, which account for about 80% of all greenhouse gas emissions, is theachievement of stabilization at the FY 1990 level by FY 2010.
On the heels of COP3, the current Long-term Energy Supply-Demand Outlook was revised in June 1998. The main
points of this document are as follows:
Demand side: Cutting energy consumption by 56 million kL of crude oil
equivalent through energy conservation(456 million kL 400 million kL)
Supply side:
Oil
Reduction of oil dependence to 47% from 52%
NuclearIntroduction of 16 - 20 more nuclear power plants(current number 51)
New energy
Expansion of use to the tune of a three-fold increase(2) Recent status
Since the revision of the current Long-term Energy Supply-Demand Outlook, large changes have occurred on theenergy supply-demand side as discussed below.
Demand side
Economic stagnation
Amid a deepening economic recession, annual energy consumption fell in FY 1998 for the first time in 16 years mostly
due to a substantial fall in energy consumption in the industrial sector, with the previous negative growth traced backto the aftermath of the second oil crisis.
Energy Conservation
Despite the economic recession mentioned above, energy demand in the residential & commercial and transportation
sectors kept growing rapidly. Besides, it is expected that energy conservation in the industrial sector will fall short of
expectations in the future because of a slow down of capital investment in energy-conserving facilities.
Supply side
Nuclear power
At present, four nuclear power plants are under construction, and two more have submitted to the Electric Power
Development Coordination Council for deliberation since last year. Despite progress with these projects, however,there have been a few setbacks, including last year's criticality accident at a nuclear fuel processing facility, which has
deeply shaken public confidence in nuclear power. Although nuclear safety and disaster control measures have beentightened, delays in introduction of nuclear power plants seem unavoidable. (According to the Electricity Supply Plan
released on March 31 this year, the plan for introducing nuclear power plants by FY 2010 was revised, with the numberof nuclear power plants to be built by FY 2010 reduced from 20 to 13.)

New and renewable energy
There are growing expectations about the greater use of new and renewable energy sources against a background ofrising public interest in environmental issues. Although some progress has been made, meeting the target set for FY2010 will require substantial efforts due to constraints such as high costs and unsteady power output characteristics.
International energy situation centering on oil
The dependence of Japan's oil imports on the Middle East has risen (86% in FY 1998), giving rise to concern over energy
security in the light of factors such as growth of oil demand in other parts of Asia, the recent rise in crude oil prices andthe lapse of Arabian Oil Co., Ltd.'s oil concessions in Saudi Arabia.

(3) Direction of future policy
If Japan maintain these current policy frameworks of energy supply and demand, 20 million ton-c of carbon emission fromenergy origin expect to increase in 2010 FY compare with 1990FY level. The fundamental goal of energy policy "Y ensuring
stable energy supply while meeting environmental conservation and economic efficiency "Y remains unchanged.
Following three policies are applicable to achieve this goal;- Further promotion of energy efficiency and conservation (7 million kL / 6 million ton -C)- Further promotion of new and renewable energy (19.1 million kL / 9 million ton -C)- Fuel switching (5 million ton - C)
Outline of energy efficiency and conservation measures and effects
Total Energy conservation effects:
57 million kL
of which: Existing measures
50 million kL: Additional measures:
7 million kL
Industrial sector
Energy conservation effect: 20.5 million kL
Share of existing measures: 20.1 million kL- Voluntary action program for environment of Keidanren, Japan Federation of
Economic Organization
Share of new additional measures: 0.4 million kL- Introduction of high-performance industrial furnaces for small and medium
Companies
Residential and commercial sector
Energy conservation effect : 18.6 million kL
Share of existing measures: 14 million kL- Improvement of equipment efficiency through Top-Runner Program: 5.4 million kL- Improvement of energy conservation performance of houses and buildings:
8.6 million kL
Share of new additional measures: 4.6 million kL- Widening of equipment subject to Top-Runner Program: 1.2 million kL- Accelerated introduction of high efficiency equipment: 0.5 million kL- Reduction of standby power consumption: 0.4 million kL- Introduction of residential energy management systems : 0.9 million kL- Promotion of energy management systems in commercial demand: 1.6 million kL
Note: Of this, 1 million kL is to be achieved through utilization of ESCOs.
Transportation sector
Energy conservation effects : 16.9 million kL
Share of existing measures : 15.9 million kL- Improving of equipment efficiency through Top-Runner Program : 5.4 million kL- Wider use of clean energy motor vehicles : 0.8 million kL- Energy conservation measures involving transportation systems : 9.7 million kL
Share of new additional measures : 1 million kL- Accelerated introduction of vehicles meeting Top-Runner Program criteria :0.5 million kL- Promotion of widening of lineup of hybrid and other alternative vehicles and like :0.5 million kL
Cross-sector
Energy conservation effects of technological development : 1.0 million kL
High performance boiler
High performance lasers
High efficiency lights
Performance improvement of clean energy vehicles

6 Institutional Organization
6.1 Ministry of Economy, Trade and Industry (METI)(1) Organization of METI(2) Organization of Agency for Natural Resources and Energy (ANRE)6.2 Advisory Committee (As of Oct. 2001)

6.3 The Energy Conservation Center, Japan (ECCJ)

Outline of ECCJ
Legal status :An incorporated foundation under the supervision of METI
Establishment : 1978 (just when hit by the 2nd oil crisis)
Mission :Core organization responsible for promotion of energy conservation
Office location : Head office & 8 branches in Japan
Supporting member : 2,868 members (as of Dec. 2003)
Staff :
153 persons (as of Apr. 2003)
Budget :5,869 million yen in 2003FY (53 million U$)
Fields of activity :Industrial, Residential/Commercial and Transportation sectors
Major activities : Industry sector ;1) Energy conservation audits services for factories
2) Education & training on energy conservation
3) State examination for energy managers
4) Technological development
5) Disseminating excellent energy conserving equipment
6) ISO14001 seminar for environmental inspectors
Residential & Commercial sector ;1) Energy conservation audits services for buildings
2) Energy labeling system
3) Ranking catalogue for energy efficient appliances
4) Energy Saving Navigation (ESN)
5) Establishment of "Energy Conservation Republic"6) Education at primary/middle model schools7) International Energy Star program implementation
8) ESCO research and develop
Cross sector and Transportation sector ;1) Energy conservation campaign & exhibition (ENEX)
2) Conference for presentation of successful cases3) Commendation (grand energy conservation prize)4) Survey and monitoring
5) Information & data base6) Publicity and publishing7) Consulting service through e-mail8) International cooperation and communications

Reference
Energy Calories (Japan)

Source) "Energy Production, Supply and Demand"