Regulation on Energy Efficiency and Conservation for the Industry and Commercial Sectors (under the Act on Rational Use of Energy : Energy Efficiency Act)

Country / jurisdiction: Japan · Year: 1979 · Status: In force · Level: National · Type: Voluntary

The Act on the Rational Use of Energy (Energy Efficiency Act) passed in 1979, revised in 1993, 1998, 2002, 2005, 2009, 2013 and 2018 sets the foundation for industrial energy efficiency and energy management regulations. The 1979 act set regulatory energy efficiency and management standards “Judgment of Standard” for prevention of heat loss and recovery and utilization of waste heat in industrial processes. Concurrently, a set of quantitative goals for energy efficiency improvements in individual factories were established. Energy efficiency in industrial and commercial sector are clearly stipulated in the latest Basic Energy Plan of 2014 with the key measures such as the continued assistance for investing energy efficient facility, creating the optimal environment for company’s implementation of energy efficiency measures, and ISO 50001 promotion, etc. Besides, the regulatory measures are as follows:

“Designated Energy Management Factories”

The regulated factory and business are as follows: “Designated Energy Management Factories (“Type 1”): In terms of energy using volume of high or medium energy use in “Designated Energy Management Factories”, referred to as “Type 1” (annual energy use of 3,000 kl or more in crude oil equivalent) and “Type 2” (annual energy use of 1,500 kl or more in crude oil equivalent).The “factories, etc.” means not only factories subject to the regulation, but offices, supermarkets, hotels, schools, and other groups of workplaces (both profit or non-profit) are subject to the regulation if their energy using volume reaches the standards).

Regulation for “Type 1” and “Type 2” Designated Energy Management Factories

The energy efficiency and management requirements of the act are as follows:

- “Type 1”: Appoint a qualified “Type 1 Energy Manager”

- “Type 2”: Appoint a qualified “Type 1 Energy Manger”, or instead, appoint a “Type 2 Energy Manager” who participates in a designated energy management seminar/training course (once every three years)

- Appoint an “Energy Management Control Officer” and an “Energy Management Planning Promoter”

- Develop and submit mid-and long-term energy management plans which include the company’s energy conservation goal of reducing energy intensity by an annual average of 1% or more

- Annual reporting to government on energy consumption and investment plans. Approximately 9,000 factories are covered under the act as of 2009.

Company-level Energy Management Regulation

The Energy Efficiency Act was revised in 2009 and a new concept for energy management was introduced. Before the revision of the Act, the regulation was targeted for a factory and facility level, but by this revision, the concept of “Company-level” energy management was introduced. This means even if the factory’s energy using volume does not reach the energy using standard volume as set in the Act, if the sum of the factories’ energy using volume reach the standard volume, the company is subject to the regulation.

The revision in 2018 allows the reporting not only by the individual business entities but also by the group company for implement energy efficiency efforts among themselves.

The Industry and Commercial Sector Benchmark System

In 2009, revisions to the Energy Efficiency Act were made to establish new national energy efficiency benchmarks for selected sectors. Sectors covered include iron and steel, cement, and thermal power plants, pulp-papers, petroleum refinery, petrochemicals and soda chemicals. The benchmarks are set and used as the target standard of the best performing companies (top 10%–20%) in each subsector. Companies in these subsectors are subject to annual mandatory reporting on the status of their performance on the benchmarks. This has to be included in the mid-term reporting to the government required by the Energy Efficiency Act.

In 2016, the benchmark system was expanded to the commercial sector, starting from the convenience stores. Continually, the government plans to gradually expand the benchmark system to the other commercial sub-sector, such as department stores and tenant offices. Additionally, the benchmark levels for cement, thermal power plants and paper and pulp industry were amended in 2016.

After 2017, the benchmark system was expanded to the commercial sector, such as hotel, department store (since 2017), supermarket, shopping center, rental office businesses (since 2018). The government plans to introduce the benchmark system for university, pachinko parlor and national government building in 2019. Altogether, the benchmark system will cover 70% of energy consumption in industry/commercial sectors.

Follow-up and Evaluation

As for evaluation, survey forms sent in advance to factories are completed by them, and then METI and the Energy Conservation Center carry out an on-site survey at each factory and cross-check the evaluations. If the evaluation shows results are below a certain level, an on-the-spot inspection is carried out, and if the situation is not satisfactory, the factory will be instructed to draw up a rationalization plan in accordance with the article 12 of the law. The on-site surveys based on the new guidelines start in April 2001. All designated energy management factories are to be checked within about five years.

SABC evaluation system (S rank, A rank, B rank, C rank evaluation system)

In 2016, the government established a new evaluation system for all Specified Business Operators, which categorizes business operators in accordance with the progress of energy intensity improvement. Under this evaluation system, the names of S rank companies will be publicized for honor. On the other hand, for the C rank companies, government will provide guidance and advice to identify the areas for improvement.

Government provides incentive scheme related to SABC evaluation system. If company is evaluated as the S rank in two consecutive years, the company can use 1) tax credit for energy efficiency investment and 2) exemption on submission of middle and long-term energy efficiency investment plan.

Official source: https://www.enecho.meti.go.jp/category/saving_and_new/saving/summary/pdf/20181227_001_gaiyo.pdf