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“The Basic Policies for the Project for the Green Innovation Fund” Formulated

March 12, 2021

The Ministry of Economy, Trade and Industry (METI) formulated the Basic Policies for the Project for the Green Innovation Fund in order to optimize the results of the Green Innovation Fund.

1. Background and purpose

Toward the goal of achieving carbon neutrality by 2050, METI decided to develop a Green Innovation Fund at the level of 2 trillion yen under the FY2020 Tertiary Supplementary Budget as part of the New Energy and Industrial Technology Development Organization (NEDO). The plan, based on the specific goals shared by public and private sectors, is to continuously support companies and other organizations for the coming ten years, which show their commitment to challenge such ambitious goals as their business issues ranging from research and development (R&D) to demonstrations to social implementation of the outcomes.

METI inaugurated the Committee on the Green Innovation Project in February 2021. Thanks to the attendance of experts, the committee has aimed to efficiently and effectively make use of funds. Since then, the committee has held discussions on basic policies for managing and operating the fund project as a whole.

Against this backdrop, METI formulated the Basic Policies for the Project for the Green Innovation Fund” based on the discussion results of the committee.

2. Overview of the Basic Policies

The basic policies stipulate the policies for implementation of the fund project which are commonly applied to the respective R&D fields, including the target companies for support measures under the fund project, the frameworks for maximizing the results of the fund and the system for operating the fund. METI, NEDO and other related organizations will operate the fund project in accordance with the Basic Policies.

The Basic Policies mainly provide two sections: “the target companies for support measures” and “the frameworks for maximizing the results of the fund.” The former explains that the fund should place full emphasis on companies engaging in the fields having high policy effects and requiring long-term, continuous funding support measures focusing on R&D projects, including social implementation, among the priority fields on which the Green Growth Strategy stipulates action plans. The latter presents the following two frameworks for requesting the managers of companies and other organizations to show their commitment to challenge goals as business issues: [i] cancellation of the fund project and partial refund of the commission fees if target companies are not sufficiently committed to efforts and [ii] introduction of incentive measures, e.g., contingent fees, in which the ratio of the national expenditure in total expenditures changes depending on goal achievement levels and other criteria.

3. Future schedule

METI will establish the fund as part of NEDO by the end of March 2021. Moreover, it will inaugurate field-based working groups under the the Committee on the Green Innovation Project, and the working groups will hold discussions on R&D goals and other initiatives to be achieved by respective R&D projects.

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Division in Charge

Environmental Policy Division, Industrial Science and Technology Policy and Environment Bureau

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