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  5. Cabinet Decision on the Bill for the Act of Partial Revision of the Act on the Rationalization etc. of Energy Use and Other Acts in Order to Establish Stable Energy Supply and Demand Structure

Cabinet Decision on the Bill for the Act of Partial Revision of the Act on the Rationalization etc. of Energy Use and Other Acts in Order to Establish Stable Energy Supply and Demand Structure

Japanese

March 1, 2022

Energy and Environment Policy

The Cabinet decision has been made on the Bill for the Act of Partial Revision of the Act on the Rationalization etc. of Energy Use and Other Acts in Order to Establish Stable Energy Supply and Demand Structure. The bill will be submitted to the ongoing 208th ordinary session of the Diet.

1. Purpose of the bill

In accordance with the 6th Strategic Energy Plan (decided by the Cabinet in October 2021), achieving carbon neutrality by 2050 and the ambitious greenhouse gas reduction goals for FY2030 will require establishing a system to ensure a stable supply of energy while shifting Japan's energy supply and demand structure. For this reason, METI has reviewed the definition of energy under the Act on the Rationalization etc. of Energy Use and established new measures to promote the transition to non-fossil energy, to strengthen support for decarbonized fuels and decarbonization technologies, to change the notification system about power supply suspension or abolition so that notifications should be submitted before the fact rather than after, to include large storage batteries in power generation business, and so on.

2. Outline of the bill

(1) Act on the Rationalization etc. of Energy Use

  1. Expands the Act on the Rationalization of Energy Use (e.g., improving energy consumption per unit) to include non-fossil energy.

  2. Calls for factories to transition from fossil energy to non-fossil energy (increase the ratio of non-fossil energy use). Specifically, it calls for specific operators, etc., to develop medium- to long-term plans to transition to non-fossil fuel energy.

  3. Changes the current leveling of electricity demand to "optimization of electricity demand," and establishes guidelines for businesses that use electricity in order to promote the shift from electricity demand to renewable energy output control, and the reduction of demand when supply and demand are tight. In addition, it calls for electric utility companies to prepare plans for measures that will contribute to the optimization of electricity demand (e.g., plans to establish electricity rates that will encourage efforts to optimize electricity demand).

(2) Act on the Promotion of Use of Non-fossil Energy Sources and Effective Use of Fossil Energy Materials by Energy Suppliers

  1. Promotes the use of decarbonized fuels by including hydrogen and ammonia as non-fossil energy sources.

  2. Promotes the use of thermal power with CCS.

(3) Act on Japan Oil, Gas and Metals National Corporation (JOGMEC Act)

  1. Adds functions of geological structural surveys, etc., for offshore wind power generation.

  2. Adds functions of equity investments in overseas projects on exploration of large-scale geothermal power generation, etc.

  3. Adds functions of equity investments in the production and storage of hydrogen, fuel ammonia, etc.

  4. Adds functions of equity investments, etc. in CCS projects and sub-bottom profiling surveys for that purpose.

  5. Adds functions of equity investments, etc., for domestic processing and smelting of rare metals.

  6. Establishes provisions in accordance with the revisions (1), (2), (4) and (5).

(4) Mining Act

  1. Adds rare earth ore to the list of minerals subject to mining rights.

(5) Electricity Business Act

  1. Changes the notification system so that notifications about suspension or abolition of power plants will be sent before the fact rather than after.
  2. Provides for in the act to include opinions regarding necessary measures to ensure supply capacity in opinions that OCCTOs send to METI in addition to their supply plans, and stipulates that METI shall base its requests to modify supply plans to electric utility companies on those opinions.
  3. Includes large storage batteries within "power generation business" under the Electricity Business Act, and also establish environments for connecting them to systems.

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