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Japan’s climate change policy - Innovative Strategy for Energy and the Environment - 18 th October, 2012 Naoya Tsukamoto (Mr.) International Strategy Division Global Environment Bureau Ministry of the Environment, Japan (MOEJ) IGES-ERI Policy Research Workshop

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Page 1: Japan’s climate change policy - Innovative Strategy for ... · Japan’s climate change policy - Innovative Strategy for Energy and the Environment - 18th October, 2012 Naoya Tsukamoto

Japan’s climate change policy- Innovative Strategy for

Energy and the Environment -18th October, 2012

Naoya Tsukamoto (Mr.)International Strategy Division

Global Environment BureauMinistry of the Environment, Japan (MOEJ)

IGES-ERI Policy Research Workshop

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Agenda

1. Update of three major policies since previous workshop (January 2012)

2. Energy and Environment Council

Past Process Policy Revision

3. Innovative Strategy for Energy and Environment (Outline)

Steady Implementation of Global Warming Countermeasures

(Reference) Image of expansion of energy saving, renewable energy, and cogeneration

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Update since previous workshop (January 2012)

The Bill of the Basic Act on Global Warming Countermeasures

(Was approved by the Cabinet in March 2010 and is still under discussion at the Diet)

[3] Domestic emission trading scheme> Still deliberately consider, taking account of burdens on domestic industry and influences on employment

[1] Feed-in tariff (FIT) for renewable energy> Started to be implemented from July 2012

[2] Environmental taxation reform> Enacted from October 2012

Three major

policies

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After open examination at the third party committee, the purchase price and the purchase period shall be decided.

Source: “Feed-in Tariff Scheme for Renewable Energy” (MITI, October 2011)

How to decide purchase price/period

Purchase rate and period shall be decided every year corresponding to the type, form of installation and scale of RE sources.

Appointment requires consent by the Diet

[Reference]: Comparison examples of current power generation costs

While considering:•Power generation cost•Profit to be received by those who installed facilities•Services life•Premium price for three years from the launch of the scheme

Source: Geothermal Generation Workshop (June 2009)LNG: Subcommittee to Study Costs and Other Issues, Electricity Industry Committee (January, 2004)

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[1] FIT: Purchase price period (1/2)

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April 2012

Source Capacity or Category Rate, tax incl. (JPY per kWh) Period (year)

PV> 10 kW 42.00 yen 20< 10 kW 42.00 yen 10

Wind> 20 kW 23.10 yen

20< 20 kW 57.75 yen

Geothermal> 15000 kW 27.30 yen

15< 15000 kW 42.00 yen

Hydropower1000 - 30000 kW 25.20 yen

20200 - 1000 kW 30.45 yen < 200 kW 35.70 yen

Biomass

Biogas 40.95 yen

20Lumber, unused 33.60 yen Lumber, general 25.20 yenWaste biomass 17.85 yen

Lumber, recycled 13.65 yen

(1 yen ≈ 1 euro cent)

[1] Reference: Draft FIT rate and period (2/2)Feed-in tariff (FIT) rate and period was proposed by the Assessment Committee on FIT Rate and Period.

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Tax Rate per t‐CO2 of “Carbon Tax as Climate Change Countermeasure”

“Carbon Tax as Global Warming Countermeasure”JPY 289*

Additional tax rate

Petroleumand CoalTax Crude oil/

Oil products

JPY 779

Gaseoushydrocarbon(LPG/LNG)

JPY 400

CoalJPY 301

Current tax rate

Tax rate corresponding to the amount of CO2 emissions for all fossil fuels (JPY 289/t‐CO2) Enforced from Oct. 2012 and increases in the tax rate gradually over 3 and a half years All the tax revenue will be allocated for curbing energy‐oriented CO2 emissions

Tax Rate 

* Approx.US$3.64 (The rate of May 22, 2012)

To be used for introduction of renewable energy and enhancement of energy‐saving measures, etc. 

[1st year] JPY 39.1 billion ;  [Normal year] JPY 262.3 billion (about US$3.31 billion) 

Enforcement Stage

Object of Taxation Current Tax Rate From Oct. 1, 2012 From Apr. 1, 2014 From Apr. 1, 2016Crude oil/Oil products 

[per 1 kl] (JPY 2,040)+ JPY 250 + JPY 250 + JPY 260

(JPY 2,290) (JPY 2,540) (JPY 2,800)Gaseous hydrocarbon

[per 1 t] (JPY 1,080)+ JPY 260 + JPY 260 + JPY 260

(JPY 1,340) (JPY 1,600) (JPY 1,860)

Coal  [per 1 t] (JPY 700)+ JPY 220 + JPY 220 + JPY 230(JPY 920) (JPY 1,140) (JPY 1,370)

Tax Revenue 

[2] Carbon Tax to cope with global warming

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Agenda

1. Update of three major policies since previous workshop (January 2012)

2. Energy and Environment Council

Past Process Policy Revision

3. Innovative Strategy for Energy and Environment (Outline)

Steady Implementation of Global Warming Countermeasures

(Reference) Image of expansion of energy saving, renewable energy, and cogeneration

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The Council on the Realization of the New Growth Strategy set up the Energy and Environment Council in June 2011 under the leadership of the Prime Minister’s Office.

“Innovative Strategy for Energy and Environment”

The Council on the Realization of the New

Growth Strategy

The Energy and Environment

Council

Re-develop Japan’s energy and environmental strategies on the inter-ministerial level

Purpose of establishment

Main organization

Section meeting

ExpectedOutcome

New Energy Basic Plan

New Strategy on Nuclear Energy Policy

Green innovation strategies

New Climate Change Policy8

Energy and Environment Council

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Chairperson

Vice-chairperson

Foreign Minister

Minister of Education, Culture, Sports,

Science and Technology

Minister of Agriculture, Forestry and

Fisheries

Minister of land,

infrastructure and

transportation

Cabinet Office/Minister

of Special Issues

(economic and fiscal policy)

Deputy chief cabinet

secretary

• Minister of economy, trade and industry

• Minister of the Environment

• Minister for National PolicySecretariat

• Cabinet Office/ Vice Minister (National Policy)

As a chairperson, Minister for National Policy was selected and the council consists of Vice-chairperson as well as six members.

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Composition of the Energy and Environment Council

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December

End of June

Provided Principles for new policies on Nuclear energy, Energy mix and Global Warming

Provided 3 options of energy mix and global warming measures (nuclear power dependency in future: 0%, 15% or 20-25%)

National Debate

Innovative Strategy for Energy and Environment

2011

2012

10

Set up the Energy and Environment Council

Indirectly decided by the Cabinet

Past Process of Energy and Environment Policy Revision

June

July & August

14th

September

19th

September

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Agenda

1. Update of three major policies since previous workshop (January 2012)

2. Energy and Environment Council

Past Process Policy Revision

3. Innovative Strategy for Energy and Environment (Outline)

Steady Implementation of Global Warming Countermeasures

(Reference) Image of expansion of energy saving, renewable energy, and cogeneration

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○Disclose information in a detailed manner through a process that will sufficiently ensure transparency and review and constantly re-examine them

1. Realization of a society not dependent on nuclear power1. 3 guiding principles towards realization of a society not dependent on nuclear power

2. 5 policies towards realisation of a society not dependent on nuclear power

3. Review of the path towards a society not dependent on nuclear power

2. Realization of green energy revolution

3. For ensuring stable supply of energy

4. Bold implementation of reform of electricity power systems (Compose the Strategy for the “Reform of Electricity Power Systems (tentative)” by the end of 2012)

5. Steady implementation of global warming countermeasures(Formulate the “Global Warming Action Plan” for the period from after 2013 by the end of 2012 )

*Source: Innovative Strategy for Energy and the Environment (Outline) (14th September, 2012)

Innovative Strategy for Energy and Environment (Outline)

Next page in detail

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Outline of Global Warming Countermeasures

*Source: Innovative Strategy for Energy and the Environment (14th September, 2012)

• Reduce about 20% of GHG emissions domestically in 2030 compared to 1990, with large-scale introduction of RE and nationwide promotion of EE energy AND drastic measures on GHG other than CO2 from energy sources.

• The domestic GHG emissions in Japan as of 2020 needs some latitude due to uncertainty over the nuclear power reactors’ operation. The emissions as of 2020 could be calculated 5-9% reduction compared to 1990 with a certain assumption.

• (sinks): 3.5% removal amount by forest sinks on average from 2013 to 2020 as the allowed cap (about 3% as of 2020)

• (international cooperation): Promotes global reduction of GHG emissions by the use of mechanisms including the Bilateral Offset Credit Mechanism.

• Japan will formulate overall government efforts as an “Adaptation Plan” with the view to reacting (adaptation) to the unavoidable impact of climate change.

Taking into account the contents mentioned above, the Government will formulate its “Global Warming Action Plan” for the period from 2013 by the end of this year for presentation to its people and the international community.

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2010 2030

Option Basic Energy Plan (2010)

Scenario 1 Scenario 2 Scenario 3

Nuclear Power 26% 45% 0% 15% 20~25%

Renewable Energy

10% 20% 35% 30% 25~30%

Amount of Electricity

1.1 PWh 1.2 PWh(+9%)

1 PWh(‐10%)

1 PWh(‐10%)

1 PWh(‐10%)

Total Energy Consumption

390 Gl 300 Gl(‐23%)

310 Gl(‐21%)

310 Gl(‐21%)

Coal : LNG 1:1.2 1:1.2 1:1.8 1:1.5 1:1.5

GHG Emissionfrom 1990

(2020)

‐0.3% ‐30%* ‐23% ‐23% ‐25%

(0~‐7%)** (‐9%) (‐10~‐11%)

GDP(trillonJPY)(from BAU)

511 563~628(‐7.6~‐1.3%)

579~634 (‐4.9~‐0.3%)

581~634 (‐4.6~‐0.3%)

• *energy‐related CO2 emission only • ** The emissions as of 2020 could be calculated 5‐9% reduction compared to 1990 with a certain assumption

Japan’s Future Options on Energy and Environment

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(Reference) Image of expansion of energy saving

*Source: Innovative Strategy for Energy and the Environment (14th September, 2012)

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(Ref) Image of expansion of renewable energy

*Source: Innovative Strategy for Energy and the Environment (14th September, 2012)

2010 2015 2020 2030

Output: 110 billion kWh

Output: 140 billion kWhAccumulated investment amount:

¥8 trillion

Output: 300 billion kWhAccumulated investment amount:

¥38 trillion

-2020 Promotion of technology development and development of environment

(1) Feed-in tariff system(2) Expand introduction through development of power grids, etc.

(wind power generation, etc.)(3) Promote investment in wind and geothermal power

generation through reform of location regulations, etc.(4) Put wind power generation on the ocean, etc. into practical

use and expand its introduction(5) Reduce costs for storage batteries which contribute to

stabilizing the system (Goal: ¥23,000/kWh (on a par with pumped storage power generation (¥40,000 to 200,000/kWh at present)))

(6) Expand the effective utilization of unused heat and heat from renewable energy sources

-2030 Expansion of introduction through cost reduction by enhancement of the system and mass

production effect, etc.(1) Expand introduction through development of power

grids, etc. (wind power generation, etc.)(2) Expand introduction through price reduction owing to

mass production effect(3) Expand introduction through utilization of the outcome

of research and development and demonstration

-2015 Expansion of introduction based on the current technology and costs

(1) Launch the development of power grids to promote introduction of wind power generation

(2) Expand introduction by the feed-in tariff system (mainly for photovoltaic power generation, etc.)

(3) Promote investment in wind and geothermal power generation through reform of location regulations, etc.

Average investment amount: ¥1.6 trillion/year Average investment amount: ¥2.3 trillion/year

Prospect for introduction in 2012Photovoltaic power:

2 million kW/yearWind power:

0.38 million kW/year

The following is required annually on average after 2013 until 2030Photovoltaic power: Approx. 3 million kW/yearWind power: Approx. 2 million kW/year Output: 180 billion kWh

Accumulated investment amount: ¥16 trillion

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(Ref) Image of expansion of cogeneration

*Source: Innovative Strategy for Energy and the Environment (14th September, 2012)

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Summary of Future Energy Plan

*Source: Innovative Strategy for Energy and the Environment (14th September, 2012)

Option 2010 2015 2020 2030Total electricity(compared to2010)

1.1 trillion kWh -25 billion kWh(-2%)

-50 billion kWh(-5%)

-110 billion kWh(-10%)

Final energyconsumption(compared to2010)

390 million kl -16 million kl(-4%)

-31 million kl(-8%)

72 million kl(-19%)

Accumulatedinvestmentamount

17 trillion yen 34 trillion yen 84 trillion yen

Output (comparedto 2010)

110 billion kWh +30 billion kWh(1.4 times)

+70 billion kWh(1.7 times)

+190 billion kWh(approx. 3 times)

Accumulatedinvestmentamount

8 trillion yen 16 trillion yen 38 trillion yen

(*Excluding waterpower)Output (comparedto 2010)

25 billion kWh +25 billion kWh(approx. 2 times)

+55 billion kWh(approx. 3 times)

+165 billion kWh(approx. 8 times)

Output (comparedto 2010)

30 billion kWh +10 billion kWh(1.3 times)

+30 billion kWh(approx. 2 times)

+120 billion kWh(approx. 5 times)

Accumulatedinvestmentamount

0.3 trillion yen 2.3 trillion yen 6.0 trillion yen

Electricity savingand energy saving

Cogeneration

Renewable Energy

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Thank you for your kind attention

Further questions:

Naoya TSUKAMOTO (Mr.)[email protected]

Akiko URAKAMI (Ms)[email protected]