JP Amended Energy Conservation Act — Shift to Non-Fossil Energy and Optimized Electricity Demand (2023)
ENFORCEMENT TIMELINE
Effective April 1, 2023
Overview
The amended Act on Rationalizing Energy Use and Shifting to Non-Fossil Energy (Energy Conservation Act), which took effect in April 2023, marks a fundamental shift from the traditional focus on rationalizing the use of fossil energy to optimizing energy use across the board, including a shift to non-fossil energy and optimization of electricity demand. Specified business operators are now required to set targets for introducing non-fossil energy and to work on optimizing electricity demand, including demand response (DR), and to revise the format and calculation basis of their periodic reports accordingly.
Enforcement Timeline
1979: The original Energy Conservation Act is enacted.
May 2022: The amendment is promulgated, renaming the law to the Act on Rationalizing Energy Use and Shifting to Non-Fossil Energy.
April 1, 2023: The amended Energy Conservation Act takes full effect, introducing non-fossil energy conversion targets and an electricity demand optimization evaluation.
From fiscal 2024 onward: Specified business operators begin submitting medium- to long-term plans and periodic reports covering their non-fossil energy conversion efforts.
Business Impact
Specified business operators that operate a factory or business site (with energy use of 1,500 kl or more per year in crude oil equivalent) must, in addition to the existing target of reducing energy consumption intensity by 1% annually, prepare and submit a medium- to long-term plan that includes a target for increasing the proportion of non-fossil energy used. They are also required to report on their performance in shifting electricity use in response to factors such as curtailment of renewable energy output (demand optimization), requiring a fundamental review of power procurement strategy and production line operating plans.