The utilities have sites for 15 new reactors, but the lead times for construction are long. The report concludes that Japan's nuclear energy production target is achievable, making possible the expected contribution of the nuclear industry to the achievement of Japan's Kyoto target for reducing carbon dioxide emissions, provided capacity utilisation can be improved and public acceptance maintained. There is scope for bringing the periodic inspection regime into line with current trends in other OECD countries. Whether the planned nuclear output will contribute enough to meet Japan's Kyoto target will depend on the rate of growth in electricity consumption which, in turn, depends on the effectiveness of energy efficiency policies. Additional reactors could be needed, beyond those planned.
Oil remains a critically important energy source for Japan.
On both energy security and environmental grounds, reducing oil consumption and diversifying supply are appropriate goals for the Government. The report draws particular attention to the structure of petroleum taxes, which appears to offer protection to the refining industry, in competition with imports. The report also examines the liberalisation of the market for petroleum products in Japan. Gasoline prices have been lowered by liberalisation, and a major restructuring has resulted in the distribution of petroleum products. We think that further change is inevitable as retail margins are too low to support the number of retail outlets.