Last Updated July 22, 2019

Law and Practice

Authors



Nagashima Ohno & Tsunematsu is one of the foremost providers of international and commercial legal services based in Tokyo. The firm has over 450 lawyers, including over 30 experienced foreign attorneys from various jurisdictions, and its overseas network includes offices in New York, Singapore, Bangkok, Ho Chi Minh City, Hanoi and Shanghai, and collaborative relationships with prominent local law firms throughout Asia and other regions. The firm regularly advises leading power utilities, trading companies and investors on their energy projects as well as regulatory matters, and financial institutions on financing on those projects. The firm has dealt with a number of renewable power projects since the introduction of the feed-in tariff in Japan. The firm represented Tokyo Electric Power Company Group on establishing an alliance platform with Chubu Electric Power Co, Ltd in the fuel and power business (including the establishment of a joint venture company, JERA).

The Act on Promotion of Global Warming Countermeasures (Act No 117 of 1998, as amended) (amendments of 2008 and thereafter are not reflected) requires all business operators to endeavour to take actions to reduce greenhouse gas emissions.

As a signatory of the Kyoto Protocol, Japan achieved its commitment to reduce its greenhouse gas emissions by 6% (below 1990 levels) in the first commitment period (2008-12) within the framework under the Kyoto Protocol. While Japan did not participate in the second commitment period (2013-20), Japan signed the Paris Agreement.

While submitting its Nationally Determined Contributions in accordance with the Paris Agreement that it will target a 26% reduction in its greenhouse gas emissions (below 2013 levels) by 2030, the Japanese government adopted the Plan of Global Warming Countermeasures in 2016 that refers to the same target. The Plan also states that Japan will target an 80% reduction in its greenhouse gas emissions (below 2013 levels) by 2050.

In Japan, thermal power plants, including coal-fired generations, are still considered an important source of energy and are classified as a 'base-load' electricity source, as shown in the 2030 energy mix target (see 2.3 Supply Mix for the Entire Market). However, in order to reduce the amount of emission of carbon dioxide, the power industry in Japan strives to develop and introduce high-efficiency and low carbon coal-fired power plants under the Act on Rationalising Energy Use (Act No 49 of 1979, as amended)  (amendments of 2018 are not reflected)

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As an action taken by the government to facilitate the retirement of aged coal-fired power plants, the government issued a guideline in 2012 where a simpler and less time-consuming environmental impact assessment will be available if it is confirmed that the replacement will reduce carbon dioxide emissions.

The Act on the Promotion of Use of Non-fossil Energy Sources and Effective Use of Fossil Energy Materials by Energy Suppliers (Act No 72 of 2009, as amended) was promulgated with recognition of the importance of developing non-fossil energy sources.

Pursuant to the Act, the government published the basic policy to achieve its purpose, whereby it targets an increase in the share of non-fossil energy sources to 44% by 2030, and electricity suppliers of 500,000 MWh or more are required to prepare and submit an implementation plan to achieve such target and a progress report every year.

In order to achieve the above target, the Act on Special Measures Concerning Procurement of Electricity from Renewable Energy Sources by Electricity Utilities (Act No 108 of 2011, as amended, or the FiT Act) was promulgated in 2011, while the feed-in tariff regime (FiT Regime) was introduced in 2012. The FiT Act boosted the development of alternative energy sources as the feed-in tariff was very generous to developers.

Under the FiT Act, renewable energy that meets statutory and regulatory requirements is sold at a fixed price for 20 years to transmission and distribution network operators, and transmission and distribution network operators are not allowed to refuse to purchase such renewable energy, with very limited exceptions.

The renewable energy that can benefit from the FiT Regime is electricity generated by solar, wind, hydro, geothermal or biomass generation.

In order to promote investment in renewable energy, the feed-in tariff – ie, the price of renewable energy – is set at a rate higher than the market rate, and any additional cost incurred by transmission and distribution network operators in relation to the purchase of the renewable energy is transferred to and assumed by consumers through a surcharge being imposed on consumers. Electricity retailers are required to transfer funds collected from their customers as a surcharge to the Green Investment Promotion Organization (GIO), and GIO pools such funds received from electricity retailers. GIO distributes those pooled funds to the purchasers of energy sold in the FiT regime so that additional costs incurred by those purchasers will be compensated.

Also, in order to promote the development of renewable energy, the government has introduced a reduced rate of property tax for certain qualified renewable energy facilities during the first three years.

See the following:

https://elaws.e-gov.go.jp/search/elawsSearch/elaws_search/lsg0500/detail?lawId=421AC0000000072 (currently there is no English translation of the entire law)

Nagashima Ohno & Tsunematsu

JP Tower
2-7-2 Marunouchi
Chiyoda-ku
Tokyo
Japan
100-7036

+81 3 6889 7000

+81 3 6889 8000

info@noandt.com www.noandt.com
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Authors



Nagashima Ohno & Tsunematsu is one of the foremost providers of international and commercial legal services based in Tokyo. The firm has over 450 lawyers, including over 30 experienced foreign attorneys from various jurisdictions, and its overseas network includes offices in New York, Singapore, Bangkok, Ho Chi Minh City, Hanoi and Shanghai, and collaborative relationships with prominent local law firms throughout Asia and other regions. The firm regularly advises leading power utilities, trading companies and investors on their energy projects as well as regulatory matters, and financial institutions on financing on those projects. The firm has dealt with a number of renewable power projects since the introduction of the feed-in tariff in Japan. The firm represented Tokyo Electric Power Company Group on establishing an alliance platform with Chubu Electric Power Co, Ltd in the fuel and power business (including the establishment of a joint venture company, JERA).

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