Japan Energy Conservation
Handbook
2001

Contents
1 World Energy Situation
1.1
Energy resource reserves (1999)
1.2
Primary energy consumption by energy resources
1.3
Primary energy consumption by regions
1.4
Trend of primary energy consumption
1.5
Energy supply composition in major countries (1998)
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
Global warming 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
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
Guidelines of factories for rationalization of energy use
4.4
Guidelines of buildings for rationalization of energy use
4.5
Guidelines of equipment for rationalization of energy use
4.6
Energy Conservation Assistance Law
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 (1999)

Note 1) As to uranium, the annual production is below the annual demand (62,000 tons),
because of stock on hand. 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 resources(Unit: 1 million tons in terms of oil; figures in parenthesis show ratio (%))Note) Others (new energy, etc.) are omitted, as the numbers are small.
Source) Prepared based on the "2001 EDMC Handbook of Energy & Economic Statistics in Japan"

1.3 Primary energy consumption by regions(Unit: 1 million tons in terms of oil)

Note) Figures in parenthesis show ratio (%).
Source) Prepared based on the "2001 EDMC Handbook of Energy & Economic Statistics in Japan"

1.4 Trend of primary energy consumption(1) Primary energy consumption per person(2) Change in primary energy consumption per GDP(3) Trend of world energy consumption (1998)

1.5 Energy supply composition in major countries (1998)(1) Supply volume of primary energy (TPES) and composition ratio by energy source

Note)1) The import and export of electric power are also included in the primary energy supply ( - in the graphindicates excess of export).
2) Coal includes other solid fuels.
Source) OECD ENERGY BALANCES (1997-1998/ I EA)(Comment)
1) The above seven countries consume slightly more than 46% of the world's energy.
2) The ratio of petroleum is especially high in Japan and Italy, accounting for 50%.
3) In U.S.A. and Germany, the percentage of coal is high.
4) In Canada, the percentage of hydraulic power is high.
5) In France, the percentage of nuclear power is especially high.

(2) Import dependence (1998)

Note) * indicates exports.
Source) Energy Balances of OECD Countries 1997-1998 (IEA)

(3) Final energy consumption and composition ratio by sectors (1998)(4) Electricity production and composition ratio by power sources (1998)

Source) OECD ENERGY BALANCES (1997-1998)

1.6 Status of energy consumption in advanced countries(1) Trend of energy consumption(Unit: %)Source) OECD ENERGY BALANCES(1997-1998)(2) Comparison of energy intensity per GDP(oil equivalent ton/million US$ of GDP)

Note) Dollars are in reference to US$ in 1990
Source) OECD ENERGY BALANCES (1997-1998)

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 Global warming and energy consumption(1) Changes in annual average ground temperature in the worldNote) Bar graph shows the value of respective fiscal year. Line graph shows 5-year runningaverages and straight line shows the trend of long-term period.
Source) IPCC(1995)
Source) Environmental white paper 2000 edition (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 the dotted line
becomes larger. This causes the rise of atmospheric temperature. It is said that if there were no carbon dioxide orvapor at all in the global atmosphere, the global temperature would be as low as -19 degC.
Source) "Metorological Research Notes No. 160, Carbon Dioxide Special", Taro Matsuno, 1987, MeteorologicalSociety of Japan (partial corrections made).

(3) Increase of the carbon dioxide level and change in fossil energy consumptionNote) CO2 levels in the past 1000 years, based on ice sheet core records (D47, D57, Siple station, South Pole point), and CO2 levels since1958, measured at Mauna Loa Observatory in Hawaii. Ice sheet cores were all collected on the Antarctic Continent. The smooth curve is a100-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 (1999)(5) CO2 per-capita emissions (1999)

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 internationalcountermeasures have been made in COP (Conference of the Parties) of UNFCC (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 Meteorological Organization)and UNEP (United Nations Environment Program) founded jointly as a place of the study about the
global warming problem of a government level in November, 1988. In the report compiled for 1995,
IPCC analyzed the climate change since the 19th century to find that global warming has been alreadyoccurring due to increasing amount of emitted greenhouse gases after the Industrial Revolution etc.

(2) UNFCC : Study of international countermeasures
As IPCC being a place to accumulate scientific knowledge, on one hand we have UNFCC as a place
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 UNFCC.
The purpose of this treaty is stabilizing the concentration of greenhouse gases in the atmosphere,accordingly it is required that the amount of emitted greenhouse gases should be controlled or cut
down. UNFCC was ratified by 50 countries and went into effect in March, 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 of greenhouse gases in the period from2008 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 degree Celsius has risen over the past 100 years.
* 1.4 - 5.8 degree Celsius will rise between 1990 - 2100.

Influences of Green House Gases 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 was held 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, Russian Federation, Slovakia, Slovenia, Spain,
Sweden, Switzerland, Ukraine, United Kingdom, USA and 15 EU member states combined.

2.3 The Japanese policy framework to promote global warming measures
In Japan, related councils' joint conference reports on global warming issues, which indicate the basic plans for
global warming measures, were compiled in November 1997, toward COP3. Based on the results of COP
conducted in the following month, December, the Headquarters to Promote Global Warming Measures, headedby 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 invarious 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 thesystem of the policy 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 the General Principles.

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

3.2 Primary energy supply componentNote) The values of year 2010 are based on the prospects for long-term
energy supply and demand of General Resource Energy Investigation
Committee (2001).(In case of counter measures)
The composition of fiscal year 1999 is:
Nuclear power
13.0%
Natural gas
12.7%
Hydro/geothermal 3.8%
New energy, etc.
1.1%
Coal
17.4%
Oil
52.0%

3.3 Primary energy intensity per GDP

3.4 Trends in final energy consumption

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 the promotion of energy conservation since the first oil crisis
and as a result the energy intensity per GNP was 30% better than it had been during the first oil crisis (FY 1973), which
was a remarkable achievement.
However, in recent years, due to low level stabilization of energy 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 andtransportation 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 of energy supply and its energy supply is mainly supported byfossil fuels, whose reserves are limited. Because of these reasons, 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 (here-inafter referred toas the Energy Conservation Law)" with a recent change of economic and social situation taken into account, and at thesame 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 have been established (low interest loans by the Japan Development Bank and Smaller Business FinanceCorporation, 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 EnergyStar Program which is an energy conservation standard for office automation equipment from personal computers andthe program was enforced on October 1, 1995. Each of the industrial, residential and commercial, and transportation
sectors is endeavoring to promote 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 experi-ences, excellent
technologies, and know-hows in energy conservation to the developing countries.
(1) For bilateral cooperations
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 of energy are consumed, such as iron and steel works and power stations.
(2) For multilateral cooperations
Use of the opportunity to exchange information and opinions through international organizations, such as IEA and APEC,
to establish 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 ofgreenhouse gases by 6% as compared with the 1990 level during the 2008-2012 period. To realize this international
pledge, Japan established in December 1997 the Headquarters of Task Force to Cope with Global Warming with theprime 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 thePromotion 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 from energy 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 thethree 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 toconserve energy according to this policy.

4.2 Law concerning rational use of energy(1) Objective
The objective of the Law is to specify the actions required for rational use of energy in factories, buildings andequipment and other actions necessary for comprehensively promoting the rationalization of energy use, for ensuring
the efficient utilization of fuel resources adapted to the socioeconomic environment at home and abroad, thereby
contributing to the sound development of the nation.
(2) Energy covered by the Law
For the purpose of the Law, "energy" refers to such fuels as oil, inflammable natural gas, and coal, as well as heat andelectricity produced using these fuels as heat sources.
(3) Basic policies and obligations of energy users
The Minister of International Trade and Industry shall establish and announce basic policies aimed at comprehensively
promoting the rationalization of energy use in respective fields, and that general ener-gy users must make efforts torationalize their energy use with the basic policies in mind. The intention is to comprehensively promoterationalization of energy use by systematically compiling and announcing the basic matters concerning the measures
to be taken by energy users, etc. and the basic matters concerning the measures for promotion of rational use ofenergy.
(4) Measures for factories
A characteristic feature of the energy consumption structure in Japan is that the industrial sector consumes large
amounts of energy compared to Europe and USA, accounting for over 50% of the total energy consumption.
Accordingly, it is important to aggressively promote the rationalization of energy use in factories and other industrial
establishments (hereinafter referred to as "factories"). To this end, the Law provides for the following.
1)Guidelines for business operators
The Minister of International Trade and Industry shall establish and announce guidelines for business operators who
use energy in their factories and other business locations, concerning the rationalization of fuel combustion, mattersrelating to the recovery and utilization of waste, and the targets in the rationalization of energy use, and measures toattain the targets, for proper and effective rationalization of energy use in factories.
It is intended that the basic matters stated in the basic policies serve as guidelines, to be referred to by business
operators when they formulate concrete measures for proper and effective rationalization of energy use in factories.
2)Guidance and advice
When deciding that guidance or advice is necessary to ensure effective implementation of rational ener-gy use infactories, the Minister of International Trade and Industry or the minister with regulatory authority over the sector towhich the factory belongs may give its operator such guidance or advice while taking into consideration the guidelines.
3)1st class designated energy management factories
Concerning the factories which are used for manufacturing or other businesses listed in Government Ordinance(mining, and supply of electric power, gas or heat) and which consume large amounts of fuel or electric power(consuming more than 3,000 kL of fuel per year in terms of crude oil or more than 12 GWh of electric power per year),the Minister of International Trade and Industry may designate any of them as a "1st class designated energy
management factory" since the promotion of rational energy use is particularly important in such factories. The
operator of a designated factory shall appoint a certain number of energy managers in charge of activities for rationalenergy use, formulate a medium-to-long termplan and submit such a plan every year to the competent minister andreport the status of energy consumption every year to the competent minister.
4)Instructions, announcement and order to make rationalization plans
If a 1st class designated energy management factory is judged to be in egregious breach of energy ratio-nalization
guidelines, the competent minister may instruct the factory operator to prepare a rationaliza-tion plan, and if theoperator 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)2nd class designated energy management factories
As for those factories other than the 1st class 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 andwhose annual electric consumption is 6 million kWh or more), there is the need for promoting the rational use ofenergy in the same way as 1st class designated energy man-agement factories. Thus the Law provides that the Ministerof International Trade and Industry may designate these factories as 2nd class designated energy management
factories. The Law prescribes that those who manage 2nd class designated energy management factories shall appoint
energy managers, cause those appointed energy managers to take an energy conservation course, and keep the recordof the conditions of energy use, etc.
6)Recommendation
If a 2nd class designated energy management factory is judged to be in egregious of energy rationalization guidelines,
the competent minister may recommend necessary measures for the rational use of energy.

4.3 Guidelines of factories for rationalization of energy use

4.4 Guidelines of buildings for rationalization of energy use(based on Article 14 of "Energy Conservation Law")(based on Article 14 of "Energy Conservation Law")a. Hotels, hospitals or clinics, commodity merchandising stores, business offices,
schools and restaurants
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 heatgenerated in the ambient indoor space.
The quantity of open air taken in is presumed to be a constant calculated on the basis of the area, 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 (Unit: Mcal/year):
The quantity of open air taken in is presumed to be a constant calculated on the basis of the area, etc. Decrease inload 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 quantity of ventilation on the presumption that standard
values are set for the efficiency, total pressure loss, etc. of a tan 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 for the power oflighting facilities and that there is no control made.

5) Efficient use of energy concerning hot water supply systems;* Virtual hot water supply load:
Quantity of necessary for producing hot water of necessary temperature in necessary amounts at each hot watersupplying place
Quantity of energy consumed for hot water supply:
Quantity of energy consumed by the whole hot water supply system including heat loss in pipes and hot water
storage tanks, quantity of energy consumed by circulating pumps, etc.
6) Efficient use of energy concerning elevators;* Virtual quantity of energy consumed by an elevator:
Quantity of consumed by a given elevator on the presumption that a standard speed control method is adopted.

Note) In the case of 1), values obtained by multiplying the above values by the scale correction factor shall bestandard ones.
(Scale correction factor: a factor for correcting standard values to relax controls of small scale buildings, etc.)

b. Residence
The owner of a residence (from a single house to an apartment house) shall make the following values in 1) or 2)
lower than those mentioned in the following attached table.

4.5 Guidelines of equipment for rationalization of energy use
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
For the entire gasoline-fueled vehicles, improvement of efficiency by about 21%* Note: Energy conservation effect is the weighted mean value based on current shipping ratios.
b. Diesel-powered passenger car (newly added item)
1) Target range
Diesel-powered car with riding capacity of 10 or under which received model designation

3) Target fiscal year
Fiscal 2005
4) Energy conservation effect *In fiscal 2005, improvement of efficiency by about 15% relative to fiscal 1995
For the entire diesel-powered vehicles, improvement of efficiency by about 21%* Note: Energy conservation effect is the weighted mean value based on current shipping ratios.

4.6 Energy Conservation Assistance Law

The spirit of this law is to take actions for assisting business operators who voluntarily tackle such activities as
rationalization of energy use and utilization of recycled resources. The contents concerned with the rationalization ofenergy use in the law are described below. In the law, "the rationalization of energy use" is considered as a concept
covering the utilization of oil-substituted energy.
(1)Guidelines for efforts
The competent minister shall establish guidelines for voluntary efforts of business operators and building owners for therationalization of energy use.
(2)Specific business activities
The following three categories of activities are defined as "specific business activities", and any business operator, etc. whois going to execute these activities can prepare and submit an activity plan to the competent minister, to obtain his
approval:a. to install or improve the equipment contributing to the rationalization of energy use 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 rationalization ofenergy use in the construction of a buildingc. to conduct R&D on the manufacturing technique of an industrial product contributing to the rationalization of energy use.
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 activity plan if he recognizes that it satisfies the requirements properly inreference to the guidelines for efforts stated in (1).
(4)Assistance measures
For the specific business activities conducted in conformity with the approved activity plan, such assistance measures asa. very low interest finance Note 1),
b. bond under Industrial Foundation Improvement Fundc. exemptions in taxation Note 2)
can be taken.
Note 1: Financial institutions (Japan Development Bank, etc.) who lend the necessary funds have theinterests 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. 2.0% for the specific activities of factories, etc, b. 2.0% for
those of buildings, as of February 17, 1999).
Note 2: For the acquisition of certain equipment contributing to the rationalization of energy use, a tax exemption of 7% ora specially added depreciation of 30% for the first fiscal year is admitted under the conventional tax system for promotionof investment in reformation of energy supply and demand structure (energy reformation tax system), and in addition, themanagement system type energy conservation investments in factories, etc. not covered by the energy reformation tax
system can also be covered for similar tax exemption by this law subject to approval of activity plans. For technologicaldevelopment, a tax exemption of 6% is admitted.
(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 "specificfacilities", and the borrowed funds required for installing or improving those facilities are covered by the bonds of theIndustrial 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 a business operator acquires equipment which contributes to efficient energy use and applies it to his/herbusiness 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 more than 20% of theincome 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.
o Energy-conserving equipment
Equipment for general industries 120 units
Equipment for small and medium enterprises: 64 units* Recognized by the Minister of International Trade and Industry in discussion with the
Minister of Finance.
* The equipment acquired based on the activity plans approved based on "Temporary Law
concerning the Promotion of Activities for Rationalization in the Use of Energy, etc. and Utilization of Recycled
Resources", specified by the government to remarkably contribute to the rationalization of energy use andapproved by the Minister of International Trade and Industry (subject to discussion with the Minister of Financerequired).
(2) Certification system of specifications for equipment which promotes reform of energy supply and demand4.8 Financial assistance for energy conservation*1 Energy conservation promotion projects for theindustrial 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 aloan during the period when an application forinterest subsidy is accepted.
*2 Energy conservation promotion projects forbuildings are provided with interest subsidies fromOil Special Account in Category (2). The preferential
rate II is applied only to the projects that are givena loan during the period when an application forinterest subsidy is accepted.
*3 These projects are provided with interest
subsidies from Oil Special Account.
JDB: Japan Development BankODFC: The Okinawa Development FinanceCorporation
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 has established "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 of August and December and has been continuing educational andpublicity activities in cooperation.

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 ofthe production process. A list of areas in need of improvement is drawn up and prioritized. Concretemeasures are suggested to address the priority of improvement plan, and a proposal is set forthwhich presents the expected benefits of these measures as well as the investment 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 acommon 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 the otherapproved country(2) Organization designated to do specified business
The Energy Conservation Center, Japan (ECCJ)(3) Logo(4) 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 2001 Directory of EDMC Energy and Economic Statistics

5.2 Energy conservation in the commercial/residential sector(1) Energy consumption by energy sources(2) Energy intensity per household by energy sources

Note) Values stated below in the indicate percentage.
Source) "Household Energy Statistics Annual 1999", 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 transportation means (1999)(A) Energy consumption share rate and transportation
volume share rate in the passenger sector(B) Energy consumption share rate and transportation
volume share rate in the cargo sector

5.4 Recent status and development for energy conservation
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 20082012 period. Japan's target for energy-related carbon dioxide emissions, which account for about 80% of all
greenhouse gas emissions, is the achievement 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 toa substantial fall in energy consumption in the industrial sector, with the previous negative growth traced back to theaftermath 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 been tightened, 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 number of 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 of risingpublic interest in environmental issues. Although some progress has been made, meeting the target set for FY 2010 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 and the 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
from energy origin expect to increase in 2010 FY compare with 1990FY level. The fundamental goal of energy policy ensuring stable energy supply while meeting environmental conservation and economic efficiency - 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- Regulatory control under Energy Conservation Law
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- Introduction of commercial energy management systems: 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 measures
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

6.3 The Energy Conservation Center, Japan (ECCJ)(1) Organization of ECCJ

(2) Outline of ECCJ
Legal status :An incorporated foundation under thesupervision of METI
Establishment : 1978 (just when hit by the 2nd oil crisis)
Mission :Core organization responsible for promotion ofenergy conservation
Office location : Head office & 8 branches in Japan
Supporting member :3,012 members (as of April 2001)
Staff :
190 persons (as of January 2001)
Budget :9,220 million yen in 2001FY (77 million U$)
Fields of activity : Industrial, Residential/Commercial andTransportation 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 schools
7> 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 cases
3> Commendation (grand energy conservation prize)
4> Survey and monitoring
5> Information & data base6> Publicity and publishing
7> Consulting service through e-mail8> International cooperations and communications

Reference
Energy Calories (Japan)