Energy Conservation Policies of Japan...The Energy Conservation Law is the basis of all energy conservation policies in Japan. It was established in 1979, triggered by the Oil Crisis

Energy Conservation Policies of Japan

January 2011 Agency of Natural Resources and Energy

Enegy Conservation and Renewable Energy Department

1. Conditions surrounding energy …Page 2 2. Energy conservation policies of Japan …Page 6 (1) Industrial sector …Page 10 (2) Consumer sector (including Top Runner Program) …Page 19 (3) Transportation sector …Page 39

3. Budgetary provisions …Page 42

Contents

1. Conditions surrounding energy 2. Energy conservation policies of Japan (1) Industrial sector (2) Consumer sector (including Top Runner Program) (3) Transportation sector

3. Budgetary provisions

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

2008 2030

その他

アフリカ

中東

中南米

インド

中国

アジア（日中印韓除く）

ロシア

東欧・中央アジア

日本

米国

OECD(日米除く）

Principally in Asia, but the energy demands of the world are expected to rise rapidly to about 1.3 times the current amounts by 2030. The energy supply structure will be hard pressed, due to the intensification of the competition to acquire resources among the countries of consumption, such as China. Japan has the lowest self sufficiency rate among the major industrialized nations.

3

Outlook of global energy

India Approx. 1.9

times

China Approx. 1.7

times

Source: World Energy Outlook 2010.

14% 4%

25% 8%

47% 61%

85%

0%

20%

40%

60%

80%

100%

イタリア日本ドイツフランスイギリスアメリカ中国

International comparison of energy self sufficiency rates (FY2009)

(19%)

(35%) (44%)

(70%)

(53%)

(85%) * The self sufficiency rate is for instances where atomic power is imported. (Figures inside brackets are for instances where atomic power is considered to be produced domestically.)

Overall Approx. 1.3

times

2008 12,271

2030 16,014

Current global conditions surrounding energy and energy supply structure of Japan

(Petroleum equivalent in million tons)

Others

Africa

Middle East

Central and South America

India

China

Asia (excluding Japan, China, India and Korea) Russia

Eastern Europe and Central Asia Japan

USA

OECD (excluding Japan and USA)

China

USA

UK

France

Germany

Japan

Italy

Source: Calculated from statistics published by IEA.

0

100

200

300

400

500

600

0

50

100

150

200

250

300

350

400

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

産業民生運輸 GDP Source: Comprehensive Energy Statistics and Annual Report on National Accounts.


The final energy consumption of Japan has basically consistently increased, except for periods immediately following the two oil crises and the economic downturn in recent years.

The GDP kept on increasing to about 2.3 times from 1973 to 2009 and the consumption of energy for individual sectors significantly increased with the consumer sector increasing to about 2.4 times, while the transportation sector increased to about 1.9 times, whereas the industrial sector increased about 0.85 times.

Transportation sector

Consumer sector

Industrial sector

(JPY trillion) Final energy consumption

1973→2009

1.3 times

Transportation

1973→2009

1.9 times

Consumer

1973→2009

2.4 times

Industrial

1973→2009

0.85 times

23.7%

33.6%

42.7%

4

Transition of Final Energy Consumption in Japan

Real GDP 1973→2009

2.3 times

Industry Consumer Transportation

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

1973

1976

1979

1982

1985

1988

1991

1994

1997

2000

2003

2006

2009

GDPあたり一次エネルギー供給量

Source: "Comprehensive Energy Statistics" of EDMC/Agency for Natural Resources and Energy, estimates of EDMC and the "Annual Report on National Accounts" of the Cabinet.

Primary energy consumption per real GDP in Japan

Source: Calculated from statistics published by IEA.

Comparison of primary energy supply per unit GDP of respective countries (2009)

Since the Oil Crisis in the 1970s, Japan has been conducting energetic activities involving both the public and private sectors, resulting in improvements in energy efficiency by about 33% in the 30 years from 1979 to 2009.

Through various energy conservation strategies the highest energy efficiency in the world was realized. Since the latter part of the 1980s, however, the efficiency per GDP has been sluggish in performance, requiring the implementation of further strategies.

5

1.0 1.9 1.7

2.4 3.0 3.0

5.9 7.5 7.8 7.2 7.7

16.3

3.1

0

2

4

6

8

10

12

14

16

18

日本

米国

EU27

豪州

カナダ

韓国

タイ

中東

インドネシア

中国

インド

ロシア

世界

(Petroleum equivalent in tons /JPY trillion) (Petroleum equivalent in tons / US$100, at 2000 price)

Approx. 33% improvement

Energy Conservation Efforts in Japan Since Oil Crisis

Primary energy supply per GDP

World

Russia

India

China

Indonesia

Middle East

Thailand

Korea

Canada

Australia

Eu27

USA

Japan



Regulatory measures Support measures

Industrial sector Consumer sector Transportation sector

Business operators (energy consumption of at least 1,500kl): Energy conservation measures (periodical reports) and reduction efforts of 1% per year.

Residential buildings and structures (at least 300m2): Observation of Energy Conservation Standards at the time of construction (submission of notification).

Automobiles and household electrical appliances: Regulation by Top Runner Program, etc.

Household electrical appliances: Display of energy conservation performance, etc.

Cargo owners and carriers (of specific minimum size): Energy conservation measures (periodical reports), etc.

Provision of subsidies and supplement of interests, etc., for implementation of energy conserving facilities.

Tax system (accelerated depreciation) for implementation of energy conserving facilities or construction of energy conserving buildings.

Residential Eco Points,

etc.

Residential rennovation tax reductions, etc.

Provision of subsidies for implementation of Clean Energy cars, etc.

Eco Car tax reductions, etc.

Provision of subsidies for development of energy conserving technologies (high performance heat pumps, high performance thremal insulation materials, etc.)

Provision of information and promotion of nationwide activities (such as forum activities) intended to improve energy conservation awareness, etc.

(Energy Conservation Law) (Budget and tax system, etc.)

Programs for energy conservation policies in Japan are classified roughly into categories of "industrial sector", "consumer sector (commercial and household)" and "transportation sector".

Strategies implemented from both aspects of regulation and support (budget, tax programs, etc.) in the respective sectors are according to the Energy Conservation Law.

Development of energy conserving technologies and nationwide activities intended to improve energy awareness have been implemented as support across fields.

7

Commercial sector Household sector

Overall Image for Energy Conservation Policies of Japan

The Energy Conservation Law is the basis of all energy conservation policies in Japan. It was established in 1979, triggered by the Oil Crisis.

(1) Manufacturing plants & business stablishments

(2) Transportation

(3) Residential buildings and structures

(4) Machinery and equipment

◆ Business operators with an annual energy consumption of at least 1,500kl (equivalent crude oil) at manufacturing plants and business establishments.

◆ Freight carriers with a transportation capacity of a minimum certain scale, such as 200 trucks or 300 railway cars for railroads, etc., (currently 637 companies).

◆ Cargo owners with an annual freight transport order of at least 30 million tons (currently 874 companies).

◆ Structures on a large scale with a total floor areas of at least 2000m2. ◆ Small to mid size structures with a total floor area of at least 300m2. ◆ Business operators who build and sell residential buildings (annually supplying at

least 150 units).

◆ Passenger cars, air conditioners, television sets, etc., 23 items. (Comprises about 70% of household energy consumption.)

8

Fields Subject to Regulations Under Energy Conservation Law

Manufacturing plants & business locations

Obligation for business operators to make an effort and public disclosure of judgment standards

○ Specified business operators and specified

chain business operators (Energy consumption of 1,500kl per year) ・ Obligation to appoint Energy Managers, etc. ・ Obligation to periodically report on energy

consumption status. ・ Obligation to submit medium and long term plans.

Transportation

Obligation for business operators to make an effort and public disclosure of judgment standards

○ Specified carriers (freight and passengers) (Fleet of vehicles: At least 200 trucks or at least 300

railway cars for railroads, etc.) ・ Obligation to submit medium and long term plans. ・ Obligation to periodically report energy consumption

status. ○ Specified consigners (Annual transport volume of at least 30 million ton-km.) ・ Obligation to submit plans. ・ Obligation to periodically report consumption of

energy related to consigned transportation.

Provisions relating to machinery and equipment

Obligation for manufacturers and import business operators of energy consuming equipment to make an effort Top Runner Standards (23 units) ・ Standards for energy conservation of passenger cars, air conditioners, television sets, etc. To exceed the performance of most superior products that have been commercialized at the present time is required of each type of unit.

Obligation to make effort in providing information to general consumers ・ Provision of information on energy conservation (annual electric power

consumption, fuel economy, etc.) that is easy to understand at storefronts of retailers who sell household electrical appliances, etc.

・ Popularization of energy conserving equipment and the provision of information, etc., by electric power and gas companies.

Provision of information

Residential buildings and structures

Obligation for construction clients and owners to make an effort and public disclosure of judgment standards ○ Specified buildings (Total floor area of at least 300m2.) ・ Obligations relating to the submission of notifications pertaining to energy conserving measures implemented by construction clients in relation to large scale modifications and obligations relating to reporting the status of overall maintenance. ○ Housing providers (Annual supply of at least 150 units.) ・ Obligation to observe targets for improving energy conservation performance of supplied ready built residential housing.

Summary of Energy Conservation Law

9



Iron and steel, as well as chemical industries, comprise 60% of energy consumption in the overall industrial sector. Energy unit consumption rapidly improved since the Oil Crisis and until the middle of 1980s, however, it has been in a levelled

off trend since the 1990s.

●Regulation: Thorough implementation of energy conservation activities by individual businesses and the formulation of benchmarks for each sector, etc. ●Support: Support for the implemenation of highly efficient energy conserving facilities, support for the development of innovative technologies, the provision of low-

interest loans, etc.

Current measures

11

(Note 1) Added value weighting is used for mining and manufacturing production indices (standards for 2000). (Note 2) It is necessary to consider that the mining and manufacturing indices are impacted by sales prices and therefore reductions can be greater than the reductions of the production volume when the sales prices are sinking.

Energy consumption amounts and proportions in manufacturing industry (FY2009)

鉄鋼 26%

化学 35%

窯業土石 6%

紙・パルプ 5%

食品・煙草 4%

繊維 1%

非鉄金属 2%

金属機械 7%

その他 14%

Index (FY1973 = 100)

(Fiscal year)

Transition of energy unit consumption per mining and manufacturing production indices in manufacturing

industry

0

20

40

60

80

100

120

73 75 80 85 90 95 2000 2005 2009

61.4

Source: "Comprehensive Energy Statistics" of EDMC/Agency for Natural Resources and Energy and estimates of EDMC.

Current Status and Countermeasures for Energy Consumption in Industrial Sector

Iron and steel

26%

Chemicals

35%

Others

14%

Textile 1%

Non-ferrous metals 2%

Metal working machinery

7%

Ceramic products and earthenware

6%

Paper and pulp

5%

Food and tobacco 4%

○Obligation to report periodically ① Transition of energy unit consumption ② Status of activities relating to energy conserving measures ③ Obligation to annually report on status of benchmark indices (for subject

business lines only), etc.

(Flow of measure implementation)

Business operator

Submission of periodical reports.

Implementation of onsite investigations.

Ministry of Economy, Trade and Industry (Note)

Rationalization plan instruction

Guidance Onsite inspections

Evaluation on details of reports and investigations.

When activities are significantly inadequate.

When instructions are not followed.

* Fines imposed for instances when orders are not followed.

○ Guidelines pertaining to energy conservation measures: Stipulation of judgment standards (guidelines) based on the Energy Conservation Law as

observance items for energy management.

Energy conservation measures for business operators overall ・ Maintenance of energy management organization. ・ Allocation of persons in charge. ・ Formulation of policies for activities pertaining to energy conservation targets, etc.

Energy conservation measures at individual manufacturing plants and business establishments

(Example: Air conditioning systems.) Preparation and implementation of management standards (manuals) pertaining to the

following measures: ・ Operational management (operating time, set temperature, etc.). ・ Periodical measurement and recording of temperature, humidity, etc. ・ Periodical maintenance and inspection of facilities.

On the basis of energy consumption, about 90% of the industrial sector and about 50% (estimated) of the commercial sector are covered, as they are subject to regulations.

○ New numerical targets to include in addition to existing targets Benchmark indices and standards to be targeted

Currently set business lines: Iron and steel, electric power, cement, paper manufacturing, petroleum refining and chemical.

Standards to be aimed for: Levels satisfied by most superior business operators in respective industries (10 to 20%).

○ Numerical targets: Reduction of annual average by at least 1%.

Current Regulatory Scheme at Manufacturing Plants, etc.

Business operators with overall annual energy consumption (head office, manufacturing plants, branch offices, sales offices, etc.) of at least 1,500kl in crude oil equivalent are subject to regulations.

Business modes, such as franchized chain of stores, are also considered single business operators and those consuming at least 1,500kl for the whole chain are subject to regulations.

Public disclosures and issuance of orders

12

Measures, such as instructions, public disclosures and orders (fines in case of violation against orders) implemented when energy conservation activities of a

business operator is significantly inadequate.

Annual energy consumption (crude oil converted amount kl）

At least 1,500kl Under 1,500kl

Classification of business operator Specified business operator or specified chain business operator －

Items to be observed Judgment standards for manufacturing plants, etc. (standards components) ・ Set management standards, operational standards based on management standards, measurement

records, maintenance inspections, etc.

Target Judgment standards for manufacturing plants, etc. (target components) ・ Reduce energy unit consumption by 1% or more in the medium to long term ・ Attain benchmark indices (only for applicable business lines), etc.

Obligations

Person to be appointed Energy Management Control Officer and Energy Management Planning Promoter －

Documents to be submitted

Medium to long term plans, periodical reports and notification on appointment of energy management control officers, etc.

Administrative checks

Guidance and advice, collection of reports and onsite inspections.

Instructions for preparation of rationalization plan (failure to follow such instruction resulting in public disclosure or issuance of an order), etc. －

Annual energy consumption (crude oil converted amount kl）

At least 3,000kl At least 1,500kl to under 3,000kl

Type designation Type 1 Designated Energy Management Factory, etc. Type 2 Designated Energy Management Factory, etc.

Obligations and persons to be appointed

Manufacturing business, mining business, as well as electric

power supply, gas supply and heat supply businesses

Other than those described on the left (hotels, schools, etc.)

All business lines

Energy Manager Energy Management Officer

1. Business operators overall

Measures Pertaining to Manufacturing Plants According to Energy Conservation Law

13

2. For each manufacturing plant of installation

Energy unit consumption = (A - B) / C

A = Energy consumption (consumption of fuel, consumption of heat supplied by others, as well as the consumption of electric power supplied by others) B = Amount of energy sold externally C = Value that is closely related to the consumption of energy * "A" and "B" are calculated in crude oil equivalent kiloliters.

Status on setting "Value that is closely related to the consumption of energy" (C).

Unit Number of business establishments

Weight 4,146

Amount 2,139

Count 1,540

Area 728

Volume 424

Unit Number of business establishments

Area 2,435

Area × time 1,054

Volume 508

Weight 377

Number of people 182

① Manufacturing sector (subject sites: 9,597 business establishments) ② Commercial sector (subject sites: 5,186 business establishments)

Source: FY2009 periodical reports

Energy Unit Consumption

14

Business operators must manage the energy unit consumption at manufacturing plants, as well as other installations and they must set targets to reduce the unit consumption, from a medium to long term perspective, with an annual average of at least 1% (judgment standards).

Background for implementation of benchmarks: More impartial evaluations on the efforts of business operators under the Energy Conservation Law. Supportive efforts by business operators through the visualization of energy conservation efforts. The spread of information pertaining to the practice of the sectoral approach to the world.

More specifically, for each specific business line (sector): Indices that can be used to compare the energy conservation status of business operators in each

business line. The spread of information pertaining to the practice of the sectoral approach to the world.

Determine benchmark indices and set standards to be attained in the medium to long term. The achievement of numerical targets (reducing energy unit consumption by an annual average of at least 1%), as set under the Energy

Conservation Law, had been difficult to sustain for business operators who already had progressed with considerable energy conservation activities.

For this reason, a more impartial evaluation on the efforts of business operators is made possible by establishing an index (benchmark index), which can be used to compare the energy conservation status of business operators, so that business operators lagging behind in taking action are promted to put in more effort.

Standards to be targeted are to be levels satisfied by most superior business operators in their respective industries (10 to 20%).

[Concept for setting business lines subject to benchmarks] Three business lines of iron and steel, cement and electric power were set in FY2008. These were set with a consideration for the

amount of energy used and the progress of international debates in the respective business lines. The setting was further expanded to include paper manufacturing, petroleum refining and chemical industries in FY2009. The coverage rate of energy consumption in the industrial sector: About 40% for the three business lines set in FY2008, which increased

to about 60% with the addition of three more business lines considered in FY2009. Expansion to include the commercial sector, such as offices and retailers, is also being considered.

Implementation of Benchmarks by Sectors Image of benchmark

96

97

98

99

100

101

0.5

Target

15

With regards to benchmarks, it has been determined that "In order to support voluntary efforts by business operators, the average values and standard deviations for the business operators of reported benchmark indices are publicly disclosed by the Government. Furthermore, the names of the business operators whose energy conservation efforts have been particularly advanced, are publicly disclosed by the Government."

(Summary of Manufacturing Plant Judgment Standards Subcommission, Energy Efficiency Standards Subcommittee, Advisory Committee on Energy and Natural Resource (March 31, 2009))

Periodical reports from last fiscal year provided reports on the results for FY2009 from formulations of the stipulations in FY2008 regarding five business industries, steel manufacturing with blast furnaces, ordinary steel manufacturing with electric furnaces, special steel manufacturing with electric furnaces, electric powr supplies and cement manufacturing. The results are shown below:

<Public disclosure of results from benchmark reports>

Public Disclosure of Results from Benchmark Reports

16 * Business operators who succeeded in achieving their targets and who agreed to be listed on a public disclosure are listed in phonetic order.

(4) Electric power supplier

Average: 99.2% Standard deviation: 1.1% Attaining business operators: Kansai Electric Power Co., Inc. Electric Power Development Co., Ltd. Tohoku Electric Power Co., Inc.

(5) Cement manufacturer

Average: 4089MJ/t Standard deviation: 250MJ/t Attaining business operators: DC Co., Ltd. Sumitomo Osaka Cement Co., Ltd. Taiheiyo Cement Corporation Chichibu Taiheiyo Cement Corporation Denki Kagaku Kogyo Kabushiki Kaisha Myojo Cement Corporation

(1) Steel manufacturer using blast furnaces

Average: 0.597kl/t Standard deviation: 0.044kl/t Attaining business operators: None.

(2) Ordinary steel manufacturer using electric furnaces

Average: 0.184kl/t Standard deviation: 0.032kl/t Attaining business operators: Jonan Steel Corporation Tokai Steel Corporation Tohoku Steel Corporation Yamaguchi Kogyo Co., Ltd.

(3) Special steel manufacturer using electric furnaces

Average: 0.58kl/t Standard deviation: 0.31kl/t Attaining business operators: Sintokogio, Ltd. KYB Cadac Co., Ltd.

The amendment of the law in 2007 stipulated that the Government will make appropriate considerations in order to promote activities relating to joint energy conservation projects (project for contributions towards the support of rationalization for the energy used by other parties).

Business operators implementing joint energy conservation projects may report the relevant activity status to the Government and the Government will take that into consideration when evaluating the business operator.

Specified business operators Specified chain business

operators Other parties

Provision of technology and advice, as well as

collaboration of projects, etc. Amount of energy jointly

conserved Periodical

reports

Status of joint energy conservation project attached

Central Government Status of joint energy conservation projects taken into consideration for evaluation.

Attached documents

Submission

Amount necessary to achieve target (reduction of unit consumption by 1%) can be evaluated in a comprehensive manner, if a report on the amount of energy jointly conserved is reported.

Activities that realize further energy conservation are supported through a collaboration of multiple business operators.

Promotion of Joint Energy Conservation Project

17

18

Business operator

Acceptance

Grant of opportunity for providing explanations

In case particular explanations are to be offered (explanation document) In case no explanations are to be offered (no procedure necessary)

Designation

Acceptance

Acceptance

Acceptance

Submission

Notification

Designation notification issued after a certain period

Submission

Report

Submission

Appointment of energy management control officers and energy management planning promoters, energy managers and energy management officers.

Energy management control officer and energy management planning promoter, energy manager and energy management officer appointment notification

Acceptance and individually dealt

Minister of Economy, Trade and Industry

Explanation demand notice

Business operator receives designation of specified business, specified chain business operator, designated energy management factory, etc.

Competent minister project

Acceptance

Acceptance

Periodical reports

Medium- to long-term plan

Notification on Status of Energy Consumption

Flow of Necessary Procedures According to the Energy Conservation Law

18



Final energy consumption

1990→2009

1.04 times

Transportation

1990→2009

1.06 times

Consumer

Commercial 1990→2009

1.38 times

Household 1990→2009

1.23 times

Industrial

1990→2009

0.88 times

Proportion of energy consumptions according to applications in household sector (FY2009)

暖房用 25%

冷房用 2%

給湯用 29%

動力他 36%

厨房用 8%

Lighting, computers, refrigerators, etc.

Hot water dispensers, etc.

Gas stove, etc. External walls, windows, air conditioners, etc.

Approx. 30%

●Regulation: Thorough implementation of energy management by individual businesses, TR programs, etc., (comprising about 70% of household energy consumption). ●Support: Implementation of "visualization" equipment, Tax Program for Promotion of Residential Building Refurbishments, household electrical appliance labeling, etc.

Looking at the transition of the final energy consumption in Japan reveals that in comparison with the industrial or transport sectors, the consumer sector (commercial and households), which comprise 30% of the overall energy consumption, had a notable increase and this sector requires enhancements to energy conservation strategies more than others.

20

Source: EDMC estimates

Current Status and Countermeasures for Energy Consumption in Consumer Sector (commercial and households)

0

100

200

300

400

500

600

0

50

100

150

200

250

300

350

400

1990

19

91

1992

19

93

1994

19

95

1996

19

97

1998

19

99

2000

20

01

2002

20

03

2004

20

05

2006

20

07

2008

20

09

産業民生運輸 GDP


(JPY trillion) GDP

Real GDP 1990→2009

1.16 times

Transition of final energy consumption and real GDP

33.6%

Transportation sector

Consumer (commercial) sector

Industrial sector

23.7%

14.2%

42.7%

Consumer (household) sector

19.4%

Industry Consumer Transportation

Heating

25%

Kitchens

8%

Hot water supply

29%

Motive energy, etc.

36%

Cooling

2%

Source: Comprehensive Energy Statistics and Annual Report on National Accounts.

The consumer sector, which is comprised of commercial and household consumers, has the highest growth in energy consumption of all sectors.

Since entering into the 2000s, however, the trend has practically flattened out. This occurred because on one hand areas and business hours increased for the commercial sector and the number of households, as well as the use of electrical appliances for the household sector increased, whereas on the other hand the efficiency of household electrical appliances also improved, due to the impact of the Top Runner Program under the Energy Conservation Law, etc.

Transition of Energy Consumption in Commercial and Household Sectors

Transition of total floor area and energy consumption in commercial sector

0.9

1

1.1

1.2

1.3

1.4

1.5

1.6

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

エネルギー消費量

床面積

エネルギー消費量/床面積


床面積

エネルギー消費量/床面積

Transition of energy consumption and number of households in household sector

0.95

1

1.05

1.1

1.15

1.2

1.25

1.3

1.35

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008


世帯数

エネルギー消費量/世帯数


世帯数

エネルギー消費量/世帯数

(Vertical axis represents indices with FY1990 set to 1.)

21

Energy consumption

Floor area

Energy consumption / floor area

Energy consumption

Floor area

Energy consumption / floor area

Energy consumption

Number of households

Energy consumption / number of households

Source: Prepared by the Agency of Natural Resources and Energy based on the Energy Supply and Demand Records of FY2008.

Energy consumption

Number of households Energy consumption / number of households

Energy conservation standards for building structures are comprised of the standards relating to the thermal insulation performance of such items as the external wall design (specifications of glass, thickness of the thermal insulation materials, etc.), "Perimeter Annual Load" (PAL) and Standards of Judgement for Energy Conservation of Buildings, "Coefficient of Energy Consumption" (CEC).

The "CEC" stipulates standards for each building facility. [CEC/AC (air conditioning facilities), CEC/V (mechanical ventilation facilities), CEC/L (lighting facilities), CEC/HW (hot water supply equipment) and CEC/E (elevators)]

Energy conservation standards of "PAL" and "CEC" are stipuated for specific building uses. [Clerical offices, hotels, hospitals, sales outlets, dining and drinking establishments, schools, assembly halls and manufacturing plants.] The Energy Conservation Standards were established in 1980 (Year of Showa 55) and sequentially enhanced in 1993 (Year of Heisei 5) and

1999 (Year of Heisei 11).

Image of energy conservation strategies for building structures Comparison of energy consumption by building structures covered by respective Energy Conservation Standards

* Amount of energy consumption (energy consumption index) necessary to achieve the same levels of indoor environments, when the energy consumption for building structures, prior to the 1980 standards (conventional types), is set to 1.

◇ Thermal insulation of external walls, etc.

◇ Elevators ・ Adoption of energy

conserving type equipment

◇ Hot water dispensers ・ Adoption of energy

conserving type equipment (heat pumps, etc.).

・ Thermal insulation of piping.

◇ Air conditioning ・Air flow controls, etc.

◇ Control of solar radiation amount

Louvers (sun shades)

Energy Conservation Standards for Building Structures

22

0.75

0.85

0.925

1

0.5

0.6

0.7

0.8

0.9

1

Prior to 1980 standards 1980 standards 1993 standards 1999 standards

◇ Lighting ・ fReduction in lighting energy

using brightness of daylight. ・ Adoption of highly efficient

lighting.

25%点灯 50%点灯 70%点灯

750lx

昼光

750lx 750lx750lx

25%点灯 50%点灯 70%点灯

750lx

昼光

750lx 750lx750lx

Japan was sectioned into six regions and the standards pertaining to the thermal insulation, air tightness and sunlight shielding were stipulated for each region.

Established in 1980 (Year of Showa 55). Enhanced in 1992 (Year of Heisei 4) and 1999 (Year of Heisei 11). Items pertaining to common building facilities in 2006.

Image of thermal insulation for residential buildings of timber construction Provisional calculation for annual energy consumption*

Comparison of thermal insulation specifications by standards Item Pre-1980 standards 1980 standards 1992 standards 1999 standards (current standards)

Performance standards Heat loss coefficient － Up to 5.2 W/(㎡K) Up to 4.2 W / (㎡K) Up to 2.7 W / (㎡K)

Specification standards

Thermal insulation materials (external walls) None Glass wool 30㎜ Glass wool 55㎜ Glass wool 100㎜

Thermal insulation materials (ceilings) None Glass wool 40㎜ Glass wool 85㎜ Glass wool 180㎜

Openings (windows) Aluminum sash + single pane

Aluminum sash + single pane

Aluminum sash + single pane

Aluminum double sash or aluminum single sash + multi-layered glass

Annual heating and cooling costs* Approx. 133,000 yen / year Approx. 92,000 yen / year Approx. 75,000 yen / year Approx. 5,000 yen / year

Annual heating and cooling energy consumption* Approx. 56GJ Approx. 39GJ Approx. 32GJ Approx. 22GJ

* Provisional calculation based on certain assumptions by the Ministry of Land, Infrastructure and Transportation.

Energy Conservation Standards for Residential Buildings

23

Ⅳ Regional specifications

56

39 32

22

0

10

20

30

40

50

60

Non-thermally insulated 1980 standards 1992 standards 1999 standards

(GJ/year-unit) Ceiling thermal

insulation 180mm

Continuous ventilation

system

Louvers on southside

window eaves

double glazed glass windows

(thermal insulating sash also, if possible)

Floor thermal

insulation 100mm

Sun shades for windows facing

east and west

Heating and cooling by air conditioners

External wall thermal

insulation 100mm

Continuous damp-proofing air-tight layers

Top Runner Standards (standards for judgment by construction clients of residential housing businesses). Targets for improving energy conservation performance of ready built residential housing supplied by building owners (construction

clients of residential housing businesses) engaged in the business of building residential housing in order to induce further improvements to energy conservation performances through such means as securing thermal insulation or implementing highly efficient building facilities.

In cases where substantial improvements in the energy conservation performance are considered necessary, such as a status of insufficient attainment of targets by the targeted fiscal year (five years (FY2013) set as the target year), the Minister of Land, Infrastructure and Tranposrtation issues a recommendation to the applicable construction client of the residential housing business to improve their performance by showing the targets and if such a recommendation is not adhered to, then public disclosures are made or orders (with penal provisions) are issued.

Energy Conservation Standards (judgment standards for construction owners and owners of specified building structures pertaining to the rationalization of the use of energy for residential housing (announced in 1999)).

Top Runner Standards (standards for judgments by construction clients of residential housing businesses (announced in 2009)).

Evaluation of thermal insulation performance for externall walls,

windows, etc.

No evaluation for energy conservation performance of facilities

Heating and

cooling facilities

Ventilating facilities

Lighting facilities

Hot water supply facility

Solar power

generating facilities

The thermal insulation performance of external walls and windows were evaluated in a comprehensive manner, based on energy consumption (facilities with a high energy conservation performance were evaluated positively, whereas facilities with a low energy conservation performance were evaluated negatively.）

Activities for a total reduction of 10% for energy consumption in comparison with installing standard

facilities.

Standard heating

and coolig

facilities

Standard ventilatin

g facilities

Standard lighting facilities

Standard hot water

supply equipme

nt

Top Runner Standards (Standards for Judgment by Construction Clients of Residential Housing Businesses)

24

Transition of Compliance Rates of Energy Conservation Standards for Residential Housing and Building Structures

The compliance rate for the Energy Conservation Standards of new buildings is about 90%, which is quite high, but the compliance rate of newly built residential housing is only about 40%.

(The reason for the rise in the compliance rate for residential housing from 2009 to 2010 was due to the impact of the Residential Eco Point program.)

25

Transition of compliance rate* with Energy Conservation Judgment Standards for newly constructed residential housing

(1999 standards)

3 7 9 12 15 15 15 16 18

26

39

0

10

20

30

40

50

60

70

80

90

100

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

(Unit: %)

* Estimated values, based on a survey for the distribution of residential housing units according to the levels of thermal insulation, were used as the figures up to FY2009 and estimated values (tentative values), based on the number of units for which residential housing Eco Points were issued (single dwelling residential housing) and the number of notifications submitted (for multiple dwelling residential buildings, etc.) under the Energy Conservation Law, were used as the figures for FY2010.

Submission of notice for energy conservation measures made obligatory from April 2006.

Coverage of energy conservation measures subject to submission of notices expanded from April 2010.

* Proportion of floor areas in building structures, which complied with the Energy Conservation Standards (1999 standards), for building structures (at least 2,000㎡) constructed and verified in the applicable year .

Transition of compliance rate* with Energy Conservation Judgment Standards for newly constructed building structures

(1999 standards)

Submission of notice for energy conservation measures made obligatory from April 2003.

(Unit: %)

34 34 35

50

70 74

85 87 85 83 85 88

0

10

20

30

40

50

60

70

80

90

100

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Coverage of energy conservation measures subject to submission of notices expanded from April 2010.

[Definition of ZEB]

Building structures that have an annual primary energy consumption of net zero or almost zero through a reduction in the consumption of primary energy in building structures with improvements to the energy conservation performance of building structures and facilities, as well as by utilizing renewable energy on site.

Variable flow rate and varible air flow rate control systems

LED lighting Motion sensor control Initial light intensity compensation Day light linkage control

Light duct system (Natural lighting)

Integrated control system

Automatic ventilation control system that responds to concentrations of carbon dioxide Natural ventilation and night purge (external air intake during night time)

Hybrid air conditioning control technology

Solar power generating system

Highly efficient air conditioner heat source equipment Blind control Utilization of unused energy in urban areas (such as river heat and ground heat)

The increase in the commercial sector (office buildings, retail stores, hospitals and schools, etc.) , which comprises the majority of the consumer sector, has been more significant than the household sector and it is the sector that most needs the enhancement of energy conservation strategies.

Activities for ZEB (Net Zero Energy Building), which carry forward fundamental energy conservation in this field, are necessary.

26

ZEB (Net Zero Energy Building)

Double skin Natural flow of air is used during the intermediate period and features high thermal insulation characteristics, even during summer or winter, without the use of air conditioning energy, saving energy and reducing carbon dioxide emissions.

Samsung constructed the first zero energy residential building (Green Tomorrow) in Korea in 2009 and opened its showroom to the public.

Green Tomorrow (total floor area: 420㎡)

[Case examples of constituent technologies for ZEB]

New Toshima City Government Building (planned) Energy conservation and creation is realized through solar power generation, as well as through the installation of planting panels and Eco wood louvers on external walls.

Double sash and double glazed windows

Intelligent lighting system using LEDs

27

Development of Technologies Intended for ZEB and ZEH in Progress of Respective Nations and Regions

Source: Nihon Sekkei (design collaborator: Kengo Kuma)

Direction of most wind Induction based on direction of most wind

Solar radiation

External blinds

Salt damage Over drafting

Ascending current

UK An ambitious target for making "all newly constructed non-residential building structures zero carbon by the year 2019" was announced by the Finance minister in March 2008.

Timeline for ZEH and ZEB 2016 2018 2019

Newly constructed public facilities to become zero carbon

All newly constructed non-residential building structures to become zero carbon

USA Energy Independence and Security Act of 2007 (EISA) stipulates the "Net-Zero Energy Commercial Buildings Initiative", which is intended for the following purposes: • All newly constructed commercial buildings in the United States by the year 2030 • 50% of all existing commercial buildings in the United States by the year 2040 • All commercial buildings in the United States by the year 2050

are to be made ZEB though the development and popularization of technologies, practices and policies.

Policy targets intended for ZEB

○ Realize ZEB for newly constructed public buildings, etc., by the year 2020.

○ Realize ZEB for an average of newly constructed buildings by the year

2030.

● Policy target of Japan (Cabinet Decision in June 2010, the "Basic Energy Plan")

28

Circumstances Surrounding ZEB in Respective Countries

All newly constructed residential housing and schools to become zero carbon

Country / region Legal system Scope Legally binding authority

Japan ○ Law Concerning the Rational Use of Energy (Energy Conservation Law)

・ Residential and non-residential buildings ・ New constructions and extension or renovation work ・ Lower limit exists (at least 300㎡)

○ Obligation to submit notifications * Instructions, public disclosure, orders or penalties (for floor areas of 2,000㎡ or more) or recommendations (for floor areas of at least 300㎡ but under 2,000㎡) issued in cases where implementations are significantly insufficient.

UK ○ Building Act ・ Residential and non-residential buildings ・ New constructions and extension or renovation work ・ Lower limit exists for extensions and renovations (in excess of 1,000㎡)

○ Obligation to comply with standards

Germany ○ Energy Conservation ・ Residential and non-residential buildings ・ New constructions and extension or renovation work ・ No lower limits


USA (State of California)

○ California state law ・ Residential and non-residential buildings ・ New constructions and extensions or renovation work ・ No lower limits

○ Obligation to comply with standards (State level)

Korea ○ Energy Conservation ・ Residential and non-residential buildings ・ New constructions, extension work or changes of use ・ Lower limits exist (commercial buildings with a total floor area of at least 3,000m2 and accommodation facilities with a total floor area of at least 2,000m2) * All residential housing and non-residential buildings with a total floor area of at least 500m2 from 2012.


Some industrialized nations already have legal obligations to comply with energy conservation standards. Japan, on the other hand, does not necessarily require compliance with standards but obligates the submission of notifications pertaining to

building constructions that outline possible strategies for construction.

Comparison of Energy Conservation Related Regulations for Residential Housing and Building Structures with Regulations Overseas

29

http://ord.yahoo.co.jp/o/image/SIG=1249napel/EXP=1318512334;_ylc=X3IDMgRmc3QDMARpZHgDMARvaWQDQU5kOUdjU1Zzc0RMc3lFbEQ3bVBLZUtSY0Q2TEJTdnRBVXVSZHkzV3hySnVWQ2o2XzJwZ0xlaFoxMmNXWV9vBHADNlouVDVadTk1WnU5NXBlWARwb3MDMgRzZWMDc2h3BHNsawNyaQ--/*-http:/www.koreanculture.jp/img/sub/korea_09.gif�

Energy Conservation Effects by Thermal Insulation Materials and Windows in Households and Buildings

In order to promote energy conservation in households and commercial areas, it is essential for the energy conservation performance of building materials (such as thermal insulation materials and windows) to be improved, along with improvements to the energy conservation performance of facilities and equipment.

Complying with the Energy Conservation Standards for residential housing and building structures can be effective for new constructions, but directly improving the energy conservation performance of building materials and the like can promote measures to deal with existing stock in an effective manner.

Energy conservation performance of building

materials (thermal insulation materials and

windows, etc.)

Energy conservation performance of facilities and

equipment (heating and cooling, ventilation, lighting

and hot water supply, etc.)

Deciding factors for energy conservation performance of

residential housing and building structures

Stipulated according to the Energy Conservation Standards for

residential housing and building structures

(primarily for new constructions) → Measures to deal with existing

stock can be made possible through stipulations of the Top Runner

Program.

Contributing to reducing the energy consumption for heating, cooling and hot water supply, which comprise approximately 60% in residential housing and 40% in building structures, by improving the energy conservation performance of building materials. Stipulated by the Top Runner

Standards → A certain level of results already

attained.

暖房用 25%

冷房用 2%

給湯用 29%

厨房用 8%

動力他 36%

暖房用 16%

冷房用 11%

給湯用 15%

厨房用 9%

動力他 49%

Residential housing

Building structures

Source: EDMC estimates

Heating and cooling 27% Hot water supply 29%

Heating and cooling 27% Hot water supply 15%

30

Heating 25%

Cooling 2%

Hot water supply 29%

Kitchens 8%

Motive energy, etc. 36%

Motive energy, etc. 49%

Heating 16%

Cooling 11%

Hot water supply 15%

Kitchens 9%

Necessity of Top Runner Standards Pertaining to Construction Materials

<Newly constructed residential housing> Approx. 800,000 units annually.

Under the current Energy Conservation Law, new constructions and extension constructions and renovations are not subject to submission of notification for residential housing with total floor area of under 300㎡ and are therefore presumed to have low standard compliance rate.

In order to further promote energy conservation in the consumer sector, it is necessary to implement provisions that cover such residential housing (65% of new constructions and existing stock).

Improvement of energy conservation with residential housing can be expected by popularizing high performance construction materials by implementing a contruction material TR system.

About 65% of newly constructed residential housing (based on floor area) are not subject to submission of notification.

<Existing stock> Approx. 50 million units.

From Annual Report of FY2008 Building Construction. From FY2008 Housing and Land Survey.

* Although major repair work such as work done on roofs or walls of large size residential housing is subject to submission of notification, not many construct ion work that are by themselves subject to submission of notification are speculated to exist.

31

Not subject to submission of notification

Subject to submission of notification

プレゼンター

プレゼンテーションのノート

＜新築フロー＞ ①年間着工数　住宅：８１９，０２０戸、建築物：６５，８３３棟・・・建築着工統計（国交省） ②床面積　住宅：７３，８７６千㎡、建築物：３７，４０３千㎡・・・建築着工統計（国交省）　http://www.mlit.go.jp/common/000143275.pdf 　※床面積は、総務省の「平成21年度固定資産の価格等の概要調書新増分家屋に関する調」でのデータもあり　　　http://www.soumu.go.jp/main_sosiki/jichi_zeisei/czaisei/czaisei_seido/ichiran08_h21_00.html ＜既築ストック＞ ①ストック数　住宅：４９５９．８万戸・・・平成２０年度住宅土地統計調査（総務省）　　　　　　　http://www.stat.go.jp/data/jyutaku/2008/nihon/kaisetsu.htm 　建築物：９７．７万件・・・平成20年法人土地基本調査、法人建物調査（国交省）　※２００㎡未満除く　　　　　　　　http://tochi.mlit.go.jp/kihon/h20s/h_index.html ②床面積　住宅：５６．０５億㎡、非住宅：２５．８４億㎡・・・平成２１年度固定資産の価格等の概要調書（総務省）より算出　　　　　　　　　　　　http://www.soumu.go.jp/main_sosiki/jichi_zeisei/czaisei/czaisei_seido/ichiran08_h21_02.html

<Equipment subject to Top Runner Program according to Energy Conservation law> (1)Promotion for further improvment on energy consumption efficiency of machinery and equipment is conducted, by stipulating performance of currently commercialized products with most superior energy consumption efficiencies (Top Runner products) with considerations for future prospects of their perofrmances and technical developments, as fuel economy standards for automobiles and judgment standards (hereinafter referred to as Energy Conservation Standards) of manufacturers for improving performance of specific equipment such as electrical equipment (household electrical appliances and OA equipment). (2) Furthermore, specific equipment that are subject to stipulations of the Top Runner Program are to be machinery and equipment that consume energy and satisfy three of following requirements (Article 78 of Energy Conservation law): ① Machinery and equipment that are used in large quantities in Japan. ② Machinery and equipment that consume significant amount of energy when used. ③ Machinery and equipment for which improvement of energy consumption efficiency is particularly important (those that have room for improving efficiency).

Energy conservation standards according to the Top Runner Program have been implemented for automobiles and household electrical appliances according to the Energy Conservation Law as amended in 1998. As of 2011, 23 equipment are subject to these standards.

Specified equipment (23 equipment)

1. Passenger cars 2. Trucks 3. Air conditioners 4. Television receivers 5. Video tape recorders 6. Lighting apparatuses 7. Copying machines 8. Computers

17. Vending machines 18. Power tansformers 19. Jar rice cookers 20. Microwave ovens 21. DVD recorders 22. Routing equipment 23. Switching equipment

9. Magnetic disk devices 10. Electrical refrigerators 11. Electrical freezers 12. Heaters 13. Gas cooking appliances 14. Gas water heating

appliances 15. Oil water heaters 16. Electric toilet seats

Regulations in Machinery and Equipment Sector (Top Runner Program)

32

Fuel economy (km/L)

Energy Conservation Standards according to Top Runner Program

When standards are set Target fiscal year

19km/L

18km/L

17km/L

15km/L 15km/L

14km/L

13km/L

12km/L

16

Judgment made with weighted average for each product category.

Example of Top Runner Program

○ Passenger cars 2,000 units (350 units for those vehicles with capacity of 11 people)

○ Trucks 2,000 units ○ Air conditioners 500 units ○ Lighting apparatuses 30,000 units ○ Television receivers 10,000 units ○ Copying machines 500 units ○ Computers 200 units ○ Magnetic disk devices 5,000 units ○ Video tape recorders 5,000 units ○ Electric refrigerators 2,000 units ○ Electric freezers 300 units

○ Heaters 300 units ○ Gas cooking appliances 5,000 units ○ Gas water heaters 3,000 units ○ Oil water heaters 600 units ○ Electric toilet seats 2,000 units ○ Vending machines 300 units ○ Power transformers 100 units ○ Jar rice cookers 6,000 units ○ Microwave ovens 3,000 units ○ DVD recorders 4,000 units ○ Routing equipment 2,500 units ○ Switching equipment 1,500 units

Business operators who failed to meet the standards by the targeted fiscal year are required to submit reports indicating reasons why they failed to achieve the targtets and their intended future actions towards improvement of efficiency under the Energy Conservation Law and if improvement of efficiency is still insufficient after implementing applicable actions, then the Minister of Economy, Trade and Industry issues recommendations and if business operators fail to adhere with such recommendation, then provisions, such as public disclosure of such business operators and issuance of orders are conducted. Furthermore, a failure to abide by an order results in the execution of penalty not exceeding one million yen.

The Energy Conservation Law obligates all manufacturers to improve energy consumption efficiencies in order to achieve standards by the targeted fiscal year, but since funding and technical capabilities are necessary to attain such standards, requirements based on annual production or importation volume (only shipments intended for Japan)are stipulated and those manufacturers who do not satisfy such requirements are not subjected to provisions such as recommendations.

Requirements (production or importation volumes) of business operators subject to recommendations and orders

Requirements of Top Runner Program and Surety Provisions

33

<Formulation, operation and flow of Top Runner Standards>

Start formulating standards (subcommittee established by

Standards Committee)

Considered by committee (interim summaries prepared

by respective subcommittees)

Summary of standards (final summary prepared by Standards Subcommittee)

Maintaining laws and regulations

(establishment and amendment of cabinet ordinances, ministerial

ordinances and notifications)

Report collection conducted year after targeted fiscal year (verification on attainment of standards and issuance of

recommendations as required, etc.)

・ Review of standards as targeted fiscal year arrives

Decision made to start formulating standards of new equipment that satisfy

TR applicable requirements (implementation of advance

investigations).

Issuance of public comments and TBT notifications

Enforcement of judgment standards

Formulation, Operation and Flow of Top Runner Standards

34

Manufacturers are required to calculate energy consumption efficiencies and weighted average values of shipment volume of products shipped during targeted fiscal year, which are set for each individual equipment and must exceed standard values set for each individual product category.

Energy consumption efficiency of individual products

Energy consumption efficiency

↑Good

↓Bad

Classification ①

Classification ③

Classification ②

Targeted standard value



Image diagram

Even if products that underrun the standards are shipped, it is acceptable as long as the standards are surpassed based on calculation of energy consumption efficiency that involves weighted average for the shipment volume of products within the same category.

Improvement of Efficiencies by Top Runner Program

35

Implementation of the Top Runner Program led to the improvement of efficiency for equipment, resulting in highly efficient products in comparison to those overseas, thereby contributing to gaining international competitive edge as well.

Comparison of efficiency among top models from overseas countries (cooling capacity of 2.5kW-class) COP

7 6 5

4 3 2 1 0

Japan USA EU China Thailand

34.1

21.2

10.5

0

5

10

15

20

25

30

35

40

日本ＥＵ米国

（％） Comparison of improvement rate for fuel economy performance

（1995→2008）

12.3 12.1 12.4

12.9 13.2 13.5

14.0 14.6 14.7 15.0 15.1

15.5 15.7

16.5

17.8

11.0

12.0

13.0

14.0

15.0

16.0

17.0

18.0

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

年度

（注）走行モード１０・１５モードによる燃費値

燃費(km/L)

47.1%改善

平均新車燃費の推移

1492

1302

1201 1159

1068 1017 990

947 963 945 919 882 865 858 849

700

800

900

1000

1100

1200

1300

1400

1500

1600

（年）

期間消費電力量 (kWh)

（注）壁掛け形冷暖房兼用・冷房能力2.8kWクラス・省エネ型代表機種の単純平均値

75.7%削減

期間消費電力量 [Passenger cars] [Air conditioners]

36

Examples for Improvement of Efficiencies by Top Runner Program

47.1% improvement

Transition in fuel economy of average new cars Electric power consumption for period

(Note) Wall mounted cooling and heating units with cooling capacity of 2.8kW-class model; simple average values for a representative model of energy conserving-type products.

(Note) Fuel economy values for the 10-15 mode.

FY

(Year)

47.1% improvement

Electric power consumption for period (kWh)

Fuel economy (km/L)

Japan USA EU

Energy conservation standard for energy consumption efficiency per unit (example: km/l) is stipulated for those quipment that are marked with an asterisk (*), while energy consumption (example: kWh/year) is stipulated for those equipment that are not marked with an asterisk (*). The "improvement of energy consumption efficiency" described in the table above represent improvement rates according to respective standards (example: When 10km/l becomes 15km/l, then it is considered to be an improvement by 50% (it is not considered 33% improvement because the fuel consumption for driving 100km has improved from 10 liters to 6.7 liters) and if 10kWh/year becomes 5kWh/year then it is considered to be an improvement by 50%).

List of Efficiency Improvement Status Due To Top Runner Program

37

Equipment name Improvement of energy consumption efficiency (actual performance) Details

Air conditioners (room air conditioners) * 67.8% (FY1997 → FY2004 for freezers) COP (3.01 → 5.05)

Electric refrigerators 55.2% (FY1998 → FY2004) Annual electric power consumption (647.3kW/ year → 290.3kW/year)

Electric freezers 29.6% (FY1998 → FY2004) Annual electric power consumption (524.8kW/ year → 369.7kW/year)

Gasoline powered passenger cars * 22.8% (FY1995 → FY2005) Fuel consumption (12.3km/l → 15.1km/l)

Diesel powered trucks * 21.7% (FY1995 → FY2005) Fuel consumption (13.8km/l → 16.8km/l)

Automatic vending machines 37.3% (FY2000 → FY2005) Annual electric power consumption (2,617kW/ year → 1,642kW/year)

Fluorescent lighting apparatus * 35.7% (FY1997 → FY2005) Lumen/Watt (63.1lm/W → 85.6lm/W)

Computers 99.1% (FY1997 → FY2005) Watt／mega operation (0.17 → 0.0015)

Magnetic disk devices 98.2% (FY1997 → FY2005) Watt／gigabyte (1.4 → 0.0255)

Copying machines 72.5% (FY1997 → FY2006) Electric power consumption (155Wh → 42.7Wh)

Electric toilet seats 14.6% (FY2000 → FY2006) Annual electric power consumption (281kW/ year → 240kW/year)

Gas water heaters (gas instantaneous water heaters and gas bath heaters) 5.5% (FY2000 → FY2006) Thermal efficiency (77.7% → 82.0%)

Gas cooking appliances (burner section) 15.7% (FY2000 → FY2006) Thermal efficiency (48.3% → 55.9%)

Gas heaters 1.9% (FY2000 → FY2006) Thermal efficiency (80.9% → 82.4%)

Kerosene heaters 5.4% (FY2000 → FY2006) Thermal efficiency (78.5% → 82.7%)

Television receivers (LCD and plasma television sets) 29.6% (FY2004 → FY2008) Annual electric power consumption (179.7kW/ year → 126.5kW/year)

DVD recorder (landbased digital broadcasting non-supported) 40.9% (FY2004 → FY2008) Annual electric power consumption (66.0kW/ year → 39.0kW/year)

Microwave ovens 10.5% (FY2004 → FY2008) Annual electric power consumption (77.2kW/ year → 69.1kW/year)

Jar rice cookers 16.7% (FY2003 → FY2008) Annual electric power consumption (119.2kW/ year → 99.3kW/year)

"Energy Conservation Label": Stipulated by JIS standards for 18 equpiment, primarily household equiment with a large amount of general consumer usage in particular, among equipment that are subject to Top Runner Standards.

"Unified Energy Conservation Label": A unified energy conservation label that coers air conditioners (for household use), television receivers, electric refrigerators, electric toilet seats and fluorescent lighting apparatuses (for household use) to facilitate recognition and comparison of energy conserving performance by consumers when products are purchased and displayed by retailers in five stage ranking from five stars down to one star (multistage evaluation).

Examples of unified energy conservation label and simplified version label

(primarily displayed by retailers)

(simplified version label)

(Unified energy conservation label)

Examples of energy conservation labels

(primarily displayed by manufacturers)

Summary of Labelling Programs

38

Article 86 (provision of information to general consumers) of the Energy Conservation Law stipulates that energy supplyers must strive to provide information that contribute to energy conservation conducted by general consumers.

As specific energy conservation information, five items have been stipulated by notifications of the Ministry of Economy, trade and Industry.

Information that contribute to rationalization of energy use conducted by general consumers. Remarks

(1) Provision of information pertaining to values representing energy consumption from the previous month to general consumers. This is currently already provided on meter reading slips.

(2) Provision of information pertaining to consumption amount and utility charges for energy on a monthly basis for the past year to general consumers.

Some of electric power companies are providing informatin provision service on their web sites.

(3) Provision of information pertaining to rough estimates for reductions in energy consumption and utility charge that have been accomplished through devised usage methods for machinery and equipment that consume energy.

Energy conservation advice is currently already provided on meter reading slips, etc. Provision of more quantitative and detailed advice is considered possible along with information on electric power consumption for individual household electrical appliances by the home energy management system (HEMS).

(4) Provision of information pertaining to performance of applicable machinery and equipment with comparison against energy consumption, as well as subsidy programs provided to promote popularization of such machinery and equipment

Information is currently already provided on web pages of respective electric power companies. Provision of more information is considered possible through energy management service made possible by implementing HEMS.

(5) Other than those already cited in preceding sections, provision of information pertaining to rough estimate of energy consumption by contracts or residential housing modes, as well as those that contribute to rationalization of energy use by general consumers, through creative actions implemented by energy suppliers.

Qualitative energy conservation advice is currently already provided on meter reading slips, etc. Provision of qualitative and more detailed information is considered possible through implementation of Smart Meters.

Source: Prepared from Ministry of Economy, Trade and Industry Notification No. 235, "Guidelines to be implemented by business operators engaged in supplying of energy to general consumers".

Provision of Information Stipulated by Energy Conservation Law

39

1. Conditions surrounding energy 2. Energy conservation policies of Japan (1) Industrial sector (2) Consumer sector (including Top Runner Program) (3) Transportation Sector


Energy consumption for the transportation sector in 2008, in comparison with 1990, increased by 8%. It has been generally transitioning into a declining trend (Table 1).

The energy unit consumption for freight consigners, to whom the Energy Conservation Law applies, has been in an improving trend for the past three years.

● Regulations: Automobile fuel consumption standards and a thorough implementation of energy managment by freight carriers and consigners

● Support: Implementation of highly efficient facilities and promotion for the popularization of the Eco Drive.

Current measures

Source: Comprehensive Energy Statistics.

Source: Calculated based on periodical reports submitted according to the Energy Conservation Law.

41

(Table 2) Transition of unit consumption by business lines (Table 1) Transition of energy consumption in transport sector

56.0 57.1 56.8 56.6 56.4 55.0 53.9 52.8 50.8 50.5

37.7 37.4 35.7 35.1 35.1 34.6 34.5 33.5 32.0 30.4

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

旅客部門貨物部門


Current Status and Countermeasures for Energy Consumption in Transportation Sector

0.0

5.0

10.0

15.0

20.0

25.0

30.0

Unit consumption [GJ

/ 10,000 tons-km]

Business type

Unit consumption by business lines

FY2007 FY2008 FY2009 Fy2010

Passenger transport sector

Freight transport sector

○ Numerical target: Reduction of energy unit consumption by an annual average of at least 1%.

Freight carriers with a transportation capacity of a certain minimum scale, such as 200 trucks or 300 railway cars for railroads, etc. Freight consigners with annual freight transport order of at least 30 million tons.

○ Business operators have an obligation to report: ① Transition of energy unit consumption and ② Status on activities of energy conservation measures.

Measures, such as recommendations, public disclosures and orders, as well as fines are implemented when energy conservation activities of a business operator are significantly inadequate.

Reports to the Minister of Land, Transport and Tourism (once a year).

Reports to the competent minister (once a year). (Minister of Economy, Trade and Industry, as well as competent minister for the business establishment)

○ Energy conservation measures • Implementation of low fuel consuming vehicles. ・ Promotion of Eco Drive. ・ Improvement of cargo loading efficiency. ・ Reducton of air freight transport, etc.

○ Energy conservation measures ・Appointment of persons responsible for energy conservation ・ Modal shifting. ・ Activities for joint orders ・ Implementation of corporate internal training, etc.

[Coverge]

42

Regulations in Transport Sector

Freight consigners with freight transport orders of a certain minimum size

Freight carriers with a transport capacity of a certain minimum size

Judgment standards for freight carriers Judgment standards for freight consigners

プレゼンター

プレゼンテーションのノート



Energy Management System (BEMS & HEMS) Implementation Promotion Project Subsidy Proposed amount for the third revised budget of FY2011 30 billion yen.

Energy Countermeasures Section at Agency of Natural Resources and Energy Information Economy Division Commerce and Information Policy Bureau

Environmental Economy Office Industrial Science and technology Policy and Environment Bureau

03-3501-9726 (Energy Conservation Section)

[BEMS (Building Energy Management System*) implementation support] ○ A subsidy is provided for the implementation of BEMS to smaller high voltage conumers, such as

small to medium size businesses, in order to promote activities to inhibit electric power demand by linking up with the implementation of Smart Meters.

○ The following effects are realized by facilitating concentrated support for implementation through this program:

① Fundamental electric power saving is realized with small to medium size buildings, which are falling behind in their electric power conserving measures because they are operated by small to medium size businesses, even though there is a significant amount of electric power consumption per account.

② In addition, a system that makes it possible for information management service business operators, who use energy to trigger emeregency requests in cases where there are shortages in electric power demand, will be built.

③ Significant reductions in the price of BEMS and the expansion of voluntary implementations following completion of the project..

[Support for implementation of HEMS (Home Energy Management System*)] ○ A subsidy is provided for the implementation of HEMS, which raises the effects of implementation for

Smart Meters in households, in rder to promote electric power savings and peak-cut electric power generation in the consumer sector, as aspects for electric power demand and supply measures.

○ Support is provided for products with potential expandability, such as connectivity with storage batteries, provided that the interface that makes it possible to connect products of various manufacturers is disclosed.

* EMS (Energy Management System) Products that offer solutions for energy use by consumers in a smart manner, by advantage is taken of

sensors and information technologies. This is not merely about single units of individual equipment, but also includes system linkups with multiple equipment to manage and control energy in an efficient and smart manner.

Line of business:

Summary and purposes of project

Central Government

Private organizations,

etc.

Private organizations, etc.,

installers

Subsidy (preparation of

funds)

Subsidy (1/3, 1/2, fixed amount)

Conditions (eligible entities, eligible activities, subsidy rates, etc.)

[Support for implementation of BEMS] ○Efficient and effective support is provided by managing the effects of cut backs during

implementation, giving assistance and after implementation, via “energy use information management and operation service providers” (about ten companies; BEMS system companies, volume household electrical appliance retailers and ESCO business operators are expected to participate).

Image of business operations

Implementation of BEMS (commitment to conserve

electric power by 15%) Energy use information

Provision of BEMS system

Small account consumers (mid range, small to medium

size enterprises)

Smart Meter

Energy use information management and operation service provider Subsidy

(half if 15% of electric power saving is achieved, etc.)

[General corporations, etc.] Preparation of funds [Central Government]

[Support for implementing HEMS]

Control of equipment "Visualization" by HEMS terminal

Electric power supplied to household from storage

batteries

Measurement of demand with Smart Meter

Electric power supplied to household from solar panels

Subsidy for Expenses Relating to Refurbishment of Building Structures for Conservation of Electric Power Proposed amount for the third revised budget of FY2011 15 billion yen

Energy Countermeasures Section at Agency of Natural Resources and Energy

03-3501-9726

○ A subsidy is provided for expenses relating to the implementation of facilities in existing building structures that offer a certain level of electric power saving effects, in order to promote electric power savings in the consumer sector, as part of electric power demand and supply measures.

○ More specifically: ① Entities eligible for the subsidy must consider the effects of reducing their electric

power consumption, with the application limited to air conditioning and hot water supply equipment, lighting facilities, thermal insulations, etc., (implementation in terms of single units is also permitted).

② A subsidy is provided even for the implementation of single unit facilities, as long as the results are for the "replacement of more than half of the applicable facility for the entire buidling structure" and "there is electric power savings of at least 10%".

○ The refurbishment of existing building structures in terms of single unit facilities, which had in the past not been eligible under the subsidy program, are promoted to inhibit electric power demand in the consumer sector starting from the approaching summer.

○ Subsidy rate

1/3 (1/2 for small to medium businesses)

Line of business:


Central Government

Private organizations, etc. Installers

Subsidy (preparation of funds)

Subsidy (1/3、1/2)


○ Image of facilities eligible for subsidy


Air conditioning Thermal insulation, etc.

Lighting facilities Hot waer supply (highly efficient heat source)

Example: Highly efficient air conditioner

Example: Multi-layered and highly functional glass

Cross sectional diagram of building structure

Example: Highly efficient lighting (including LEDs),

Light intensity sensors

Example: Highly efficient heat pump Highly efficient boiler Cogeneration systems

Subsidy for support of business operators for rational use of energy Estimated amount from requests for the budget of FY2012 30 billion yen (40.01billion yen)


03-3501-9726

○ Subsidies are provided for facility implementation costs (replacement costs only) for energy conservation

activities, which are considered to be highly politically significant with consideration for the “potential for advanceness of technology”, “energy conservation effects” and “cost effectiveness” planned by business operators.

○ Furthermore, an emphasis is placed on subsidizing the implementation of “advanced facilities and technologies”, etc.

○ Support is provided with an empahsis on energy intensive-type small to medium business enterprises for the purpose of further promoting investments on energy conservation.

○ Support is provided with an emphasis on projects with large electric power saving effects, as electric power demand and supply measures.

○ Entities eligible for receiving subsidy Business operators (must be a corporate entities) from all business lines, installing or owners of the facilities.

○ Subsidy rate ① Individual projects: Up to 1/3. ② Associated projects (*) Up to 1/2. (*) Associated implementation of entities with different capital relations, such as businesses located within an

industrial complex, etc.

Line of business:


Ministry of Economy, Trade

and Industry

Private organizations, etc. Business operator

Subsidy Application



Public offering & subsidy

New turbo chillers

Next-generation coke oven


03-3501-9726

○ Subsidy for Expenses of Implementation Promotion Project for Specific Facilities with Rational Use of Energy

(1) Eligible projects A subsidy is provided towards the interest payments for loans taken out from private financial institutions by

business operators who implement energy conserving facilities or install Top Runner equipment through private organizations to ensure that their interest payments remain low, since increased investments for energy conserving facilities are anticipated, due to heightened needs for energy conservation and electric power savings in the industrial sector, arising from the Great East Japan Earthquake.

(2) Entities eligible for receiving a subsidy and subsidy rate Private financial institutions, fixed amount (interest subsidy 1.0%)

Line of business:




Highly efficient turbo chillers

Top Runner equipment

Central Government

Private organizations,

etc. Business operator

Subsidy (fixed amount (10/10))

Fixed amount (interest subsidy 1.0%)

Private sector business operator, etc.

Loan Repayment

Subsidy for Expenses of Implementation Promotion Project for Specific Facilities with Rational Use of Energy

Estimated amount from requests for the budget of FY2012 3 billion yen (new)


03-3501-9726

○ In order to realize ZEB (*) with newly constructed public building structures in 2020, subsidies amounting to a

maximum of one-third of the project expenditure are provided to projects anticipated to cause certain ripple effects by transforming single buildings into ZEBs and also by multifaceted utilization of energy.

○ Furthermore, in order to promote the popularization of ZEH (*), as an energy conservation strategy for the household sector, subsidies amounting to half of the project expenditure are provided to projects to modify existing residential housing into ZEH and subsidies that amount to one-third of the project expenditure are provided to projects to newly construct ZEH residential housing.

* ZEB: Net Zero Energy Building * ZEH: Net Zero Energy House

Line of business:



Central Government


Subsidy (fixed amount (10/10)) Subsidy (max. 2/3)

[ZEB validation project]

Central Government


Subsidy (fixed amount (10/10)) Subsidy (max. 1/2)

[ZEH modification support project ]

Project for Promotion of Net Zero Energy Conversion of Residential Housing and Building Structures Estimated amount from requests for the budget of FY2012 14 billion yen (new)


ZEB

ZEH

HI lighting and LED lighting Motion sensor control Initial light intensity lighting Daylight linkage control

Light duct system External air conditioning and carbon dioxide control Variable flow rate and varible air flow rate control systems

Automatic ventilation control system Desiccant system

(a cooling system that utilizes dehumidification) Hybrid air conditioning control technology

Solar power generating system

Integrated control system

High performance glass

Energy conservation ventilation system

Highly thermally insulated

Highly efficient air conditioner

Highly efficient hot water dispenser

High efficiency lighting


03-3501-9726

○ Projects effected for providing business operators a diagnosis on the potential of implementing energy conserving technologies. Energy conservation at manufacturing plants and business establishments are promoted through this effort.

○ Eligible entities

Business operators who conduct diagnostic business operations, which include consideration for the potential for implementing energy conserving technologies, at manufacturing plants and office buildings, etc.

* In consideration for changes in the conditions following the earthquake disaster, the scope of eligible business operators that conduct diagnosis is increased from FY2012, along with the acceptance of applications for diagnosis pertaining to electric power savings.

Line of business:



Central Government

Private organizations, etc.

Manufacturing plant Business establishment

Subsidy (fixed amount (10/10)) Dispatch of personnel

Subsidy for Programs to Promote Implementation of Energy Conservation Measures Estimated amount from requests for the budget of FY2012 600 million yen (880 million yen)


Project for providing guidance on implementation of energy conservation measures

Implementation of improvements

Extraction and elimination of waste

Implementation of plan program

Public relations, educationandtraining

Verification of effects

Progress management

Gaining understanding about improvement effects

Measuring and recording

Review

Review of management standards Review of plan program

Plan

Setting objectives and targets Preparation of management standards Improvement plan program

Mangement of unit consumption Understanding consumption by

application Understanding maintenance efficiency

Energy Conservation Diagnosis

(understanding current status)

Seamlessly nurturing support from discovery of promising technologies to their commercialization


03-3501-9726

○ Publicly offered proposal-type research and development, for providing consistent support from the discovery of seeds to commercialization for new and innovative energy conserving technologies, will be carried out in a strategic manner.

○ In order to review the current projects for innovative energy conserving technology developments will be reviewed and further research and development promoted through the collaboration of the industry, academia and government, which are focused on results, the attainment of targets will be thorooughly enforced through the implementation of the stage gate screenings and support for promising topics with the sights trained on commercialization will be promoted in a powerful manner.

○ Consortiums comprised of relevant research and development organizations, as well as users for individual technical domains, are established to set issues for developments pertaining to specific technologies and formulate energy conserving technology strategies, in order to promote technology innovations, efficient technology developments and secure effectiveness of business operations.

Line of business:



Central Government NEDO Enterprises

Universities, etc.

Subsidy fund Subsidy (2/3, 1/2)

Stretegic Energy Conserving Technology Innovation Program (Formerly Project for development of innovative technologies for energy conservation)

Estimated amount from requests for the budget of FY2012 12 billion yen (10.2 billion yen)


Image of project for "Stretegic Energy Conserving Technology Innovation Program"

Energy Conserving Technology Initiative (tentative name) NEDO

Collaboration, etc.

[Investigative research on energy conserving technologies] ○ Formulation of technological strategies ○ Setting of development issues

Reflection Discovery of seeds and commericalization strategies

Establishment of consortium for individual technical domains

Power electronics ZEB

Human factors for comfort and

energy conservation

Next generation-type

heat pump systems

1 year

【Support for research and development of energy conserving technologies] ○ Managementr of research and development ○ Accesptance screening and

stage gate screening

Incubation research

(2/3 subsidy)

Research and development

(2/3 subsidy)

Validation development (1/2 subsidy)

Acceptance screening

Screening

Screening

Screening

Within 1 year Within 2 years Within 2 years

Commercialization

Incubation research

Advance research and formulation of development and implementation scenar ios in o rder to ass ess d e v e l o p m e n t i n v e s tm e n ts f o r p r o m i s i n g e n e r g y c o n s e r v i n g technologies.

Enterprises, universities and research

institutions

Approx. 20 million yen per case

2/3※

Within 1 year

Research and development

Research and development for p ra c t ica l i m p l e men ta t io n a r e conducted. Target attainment is thoroughly implemented through appropriate management of research and development through advice provided by external experts, etc.

Enterprises, universities and research institutions

Approx. 300 million yen per case

2/3※

Within 2 years

Validation development

Further technology developments and validations are conducted in order to overcome inhib i t ing factors for technologies that have undergone practical implementation, but for which drawing in of business opportunities is difficult.

Enterprises, etc.

Approx. 1 billion yen per case

1/2

Within 2 years

Summary

Eligible entities

Upper limit amount

Subsidy rate

Implementation period

* For industry, academia and government collaborations only; 100% subsidy for public research institutions.