1. Japan’s Policy Measures for Promoting Development and Investments
Asia-Pacific Low Carbon Technology Summit
October 19, 2016
Japan’s Policy Measures for Promoting
Low Carbon Technology
Development and Investments
Xianbing LIU
Senior Policy Researcher
Institute for Global Environmental Strategies (IGES), Japan 1

2. The joint crediting mechanism (JCM) L2-tech Japan initiative
Japan’s policy measures for low carbon technology development and investment, and the examples
The joint crediting mechanism (JCM)
L2-tech Japan initiative 2

3. Japan’s mitigation target in the INDCs
GHG emissions per GDP: More than 40% ↓
GHG emissions per capita: About 20% ↓
Energy efficiency: 35% ↑
Share of renewable energy in total power generation: Approx %
Overall target: A reduction of 26.0% of GHG emissions by FY 2030 compared to FY 2013 (25.4% reduction compared to FY 2005) (approx billion t-CO2eq as 2030 emissions)
1278 TWh
Geothermal: %
Economic growth:
1.7%/a
Energy savings: 17%
Biomass: %
1065 TWh
Energy
savings +
renewable
energies:
40%
Wind: 1.7%
Renewables:
19-20%
Renewables:
22-24%
966.6
TWh
Energy savings: TWh
(-17% from the case w/o savings)
980.8
TWh
Solar: 7.0%
Hydropower: %
Nuclear:
17-18%
Nuclear:
20-22%
Power generation mix in FY2030
LNG: 22%
LNG: 27%
Electricity demand
Electricity generation
Coal: 25%
Coal: 26%
Oil: 3%
Oil: 2%
FY 2013
FY 2030
FY 2030 3 3

4. A mix of policy measures for de-carbonization
Other Budget
Renewables
Approx. JPY 100 trillion through 2030 (cumulative)
Investment for de-carbonization
Approx. JPY 1 trillion in 2015
Feed-in tariff scheme
Taxation
incl. tax reduction measures
Regulation and standard
Special account for energy policy
[METI] JPY 3677 bill. mainly for industry and energy conversion
[MOEJ] JPY 1564 bill. mainly for commercial and residential sectors
e.g., Energy Conservation Law, top-runner program
JPY 289*
“Carbon Tax as Global Warming Countermeasures”
Add. carbon tax rate
Petroleum and coal
tax
JPY 779
Crude oil/
Oil products
JPY 400
Gaseous hydrocarbon
(LPG/LNG)
Energy tax rate
JPY 301
Coal
Tax rate: JPY 289/t-CO2 for all fossil fuels; Enforcement: Since Oct. 2012, increasing over 3.5 years (Apr. 1, 2014 and Apr. 1, 2016); Revenue: JPY 39 bill. (1st year); JPY 260 bill. (since Apr., 2016); Tax use: Earmarked for curbing energy-related emissions. 4

5. MOEJ’s measures for renewable energy development
For the maximal introduction, measures are taken in all phases of RD&D
→ Demonstration of floating offshore wind power generation
→ Gathering info of EIA regarding wind and geothermal
Wind
Geothermal
→ Promotion of low-carbon society utilizing geothermal power
→ Promotion of communities using wood-based biomass power and heat
→ Building a regional-recycling biogas system
→ Promotion of low emission waste -to-energy system
Biomass
→ Promotion of hydropower generation utilizing in waterworks
Hydropower
→ Demonstration of tidal power generation
Maximum usage of regional-based renewable energy resources
Ocean
Utilization of renewables with hydrogen and battery
Utilize residual renewables to produce and utilize hydrogen for fuel cell and FCVs.
Utilize batteries to normalize fluctuations of solar and wind power generation.
Financial support for local municipalities
‘Green New Deal’ fund; Create leading low-carbon and renewable-oriented communities. 5

6. An example: Support for building low-carbon society
Realize an autonomous, distributed and disaster resilient low-carbon communities by: Full demonstration of renewables, storage, and interchange with micro-grids
Scheme
MOEJ
Nonprofit
Organization
Municipalities/
Private firms
Period: Up to three years;
Grant: Up to 75%
Sites
Period
Renewables
Nanao,
Ishikawa FY
PV, BDF, binary cycle power
Higashi-matsushima, Miyagi
PV, BDF
Suita,
Osaka FY PV
Nagoya, Aichi
PV, biomass, gas-CHP 6

7. Another example: Demon. floating offshore wind turbine
More potential of offshore wind turbines than that of onshore in Japan
Stable and efficient power generation by offshore wind turbines
Expectation to floating turbines introduced in deep sea areas (50 m or deeper)
Started in FY2010, pilot scale and commercial scale models installed in FY 2012 and 2013
Associated technologies and systems established by FY 2015 toward practical application
Full-fledged demonstration off the coast of Kabashima, Goto City, Nagasaki
The world’s first hybrid spar model
[Significant cost reduction by Japanese technologies]
2 MW demonstration model
Design and construction of a floating structure resistant to typhoons, etc.
Coordination with the fishing industry/system in harmony with fisheries
Environmental assessment method
In addition, demonstrate technologies and systems to produce hydrogen using surplus electricity 7

8. One more case: Hydrogen demonstration and deployment
Low-carbon hydrogen supply chain image:
Production
Storage
Transportation
Application
FCV H2 H2 H2
FC bus
FCV
Tube trailer/Liquid tanker
Compressed-gas and liquefied-gas storage
Renewable energy
Unutilized energy
Fuel cells
Rep. entity
Demonstration site
Energy source
Application
Toyota
Yokohama, Kanagawa
(incl. Kawasaki)
Renewables (Wind)
FC forklifts, etc.
Air Water
Shikaoi town, Hokkaido
Renewables (Biogas)
FC, etc.
Tokuyama
Shunan, Yamaguchi;
Shimonoseki, Yamaguchi
Unutilized energy
(Byproduct hydrogen)
FC, FCV, etc.
Showa Denko
Kawasaki, Kanagawa
Unutilized energy (used plastics)
Toshiba
Shiranuka town, Hokkaido
Renewables (micro hydropower) 8

9. The joint crediting mechanism (JCM) L2-tech Japan initiative
Japan’s policy measures for low carbon technology development and investment, and the examples
The joint crediting mechanism (JCM)
L2-tech Japan initiative 9

10. The joint crediting mechanism (JCM): Scheme
Japan
Partner Country
Joint Committee
(Secretariat)
Notifies issuance of credits
Notifies issuance of credits
Development/revision of the rules, guidelines and methodologies
Registration of projects
Discusses the JCM implementation
Issuance of credits
Government
Issuance of credits
Government
Reports issuance of credits
Reports issuance of credits
Conduct policy consultations
Request
registration of projects
Request issuance of credits
Request
registration of projects
Request issuance of credits
Submit PDD /monitoring report
Submit PDD /monitoring report
Project participants
Implementation & monitoring of projects
Project validation
Verification of emission reductions or removals
Third party entities
Project participants
Implementation & monitoring of projects
Inform results of validation
/verification
Inform results of validation
/verification
JCM website: 10

11. JCM partner countries (16 as of July 15, 2016)
Mongolia
Jan. 8, 2013
（Ulaanbaatar）
Bangladesh
Mar. 19, 2013
(Dhaka)
Ethiopia
May 27, 2013
(Addis Ababa)
Kenya
Jun. 12,2013
(Nairobi)
Maldives
Jun. 29, 2013
(Okinawa)
Viet Nam
Jul. 2, 2013
(Hanoi)
Lao PDR
Aug. 7, 2013
(Vientiane)
Indonesia
Aug. 26, 2013
(Jakarta)
Costa Rica
Dec. 9, 2013
(Tokyo)
Palau
Jan. 13, 2014
(Ngerulmud)
Cambodia
Apr. 11, 2014
(Phnom Penh)
Mexico
Jul. 25, 2014
(Mexico City)
Saudi Arabia
May 13, 2015
Chile
May 26, 2015
(Santiago)
Myanmar
Sep. 16, 2015
(Nay Pyi Taw)
Thailand
Nov. 19, 2015
(Tokyo) 11

12. JCM project flow and support from MOEJ
JCM Support by MOEJ
*USD1=JPY110
F/S Support
Capacity building and feasibility studies
FY2015: JPY 2.6 Bill. (USD 23 Mill.)
FY2016: JPY 1.1 Bill. (USD 10 Mill.)
Project Formation
・　Includes City-to-City Collaboration Program
Small/medium-scale projects (JPY several tens of million to several hundreds of million)
Model projects (over 3 years)
FY2015: JPY 2.4 Bill. (USD 22 Mill.), JPY 7.2 Bill. (USD 65 Mill.)
FY2016: JPY 2.2 Bill. (USD 20 Mill.), JPY 6.7 Bill. (USD 61 Mill.)
Project Development
Financial Support
Project Implementation
Infrastructure (ADB pipeline projects) (JPY several billion to over 10 billion)
ADB Trust Fund (JFJCM: Japan Fund for JCM)
FY2015: JPY 1.8 Bill. (USD 16 Mill.)
FY2016: JPY1.2 Bill. (USD 11 Mill.)
Acquisition of JCM Credits
Emission reductions acquired by Japan under the JCM will be appropriately counted as Japan’s reduction in accordance with the Paris Agreement.
Accumulated reductions by FY2030 via governmental JCM programs: 50 to 100 million t-CO2. 12 12

13. Examples of JCM model projects
Indonesia
Vietnam
Vietnam
Waste heat recovery in cement plant
Eco-driving with digital tachograph
High efficient transformers in power distribution
Mongolia
Palau
Indonesia
High efficient boiler
for heating
Solar PV on the top of building roof
Gas engine co-generation at the automobile assembly plant 13

14. The joint crediting mechanism (JCM) L2-tech Japan initiative
Japan’s policy measures for low carbon technology development and investment, and the examples
The joint crediting mechanism (JCM)
L2-tech Japan initiative 14

15. L2-tech Japan initiative Technologies in the list
Enhance public awareness and ensure producer reliability by offering information
 Announced by MOEJ in March 2014
 Refers to ‘Leading Low-carbon Technologies’
 Compiling information on leading low-carbon technologies for reference when spreading them at home and abroad
Merits
Possible support: 1) Subsidy from carbon tax revenue; 2) Support for tech. development
Field
Technologies in the list
Industry and commercial 　
Air conditioning, heat sources, etc.　　
Industry (sector-specific manufacturing equipment etc.)
Industries, including iron and steel, chemical, paper and pulp manufacturing, petrochemical, automobile manufacturing, construction machinery, agricultural instruments (for cultivation), agriculture (horticultural facility)
Transportation　
Automobiles (passenger cars, commercial vehicles, heavy vehicles), two-wheeled vehicles, railways, shipping, aircraft
Residential　
Domestic electrical appliances, water heaters, window glass, etc.
Energy conversion　
Renewable energy, natural gas-fired power plants, etc.
Waste treatment and recycling
General wastes treatment, industrial wastes treatment, material recycling, sewage treatment, sewage sludge treatment, etc. 15

16. Image of L2-tech information structure
Equipment and instruments that contribute to low-carbonization (worldwide)
CO2 reduction
High
Low A B C G H I
Level
Settable
Standard evaluation
Disable
Select important ones
【L2-Tech List】
Includes equipment and instruments superior in CO2 reduction for attaining target of 80% reduction by 2050
Standard evaluation is settable
【L2-Tech Standard List】
Indicates highest performance of ‘superior products’ commercialized as L2-Tech standard
Certify products used in equipment and instruments
【L2-Tech Certified Product List】
Products certified by MOEJ as presenting highest CO2 reduction efficiency 16

17. Thank you for the attention!17