May 3, 2017 — Government efforts to increase energy efficiency and conservation prompted Japan’s House of Representatives to pass a record 1.394 billion yen budget for energy subsidies for the 2017-2018 fiscal year.
This new budget is intended to encourage more foreign investment in energy-efficient buildings and next-generation, clean-energy vehicles. Companies that replace older equipment in their workplaces with more energy-efficient upgrades can expect subsidies for one-third to one-half of their expenses. Businesses that hit the target of net zero energy in their buildings will be subsidized a full two-thirds of their expenses.
In the residential market, the Ministry of Economy, Trade and Industry (METI) aims to make net zero energy homes (ZEH) more attractive for both builders and buyers. The government will offer fixed-amount subsidies for new ZEH builders and will underwrite the costs of retrofitting existing houses by one third. The Ministry seeks to have more than half of all new construction meet the net zero energy standard by 2020 as well as double the number of renovations that improve energy efficiency.
METI has set similarly ambitious goals for the transportation sector. More than half of all new cars sold in 2030 are to be next-generation, clean-energy vehicles (such as electric cars). To jumpstart the market for these ‘green’ vehicles, for the next three years the government will offer fixed-amount subsidies for the purchase of new vehicles that meet environmental standards. Growth in this sector offers Japan multiple benefits: most important, it will reduce Japan’s carbon emissions, as mandated by the 2015 Paris Agreement, to fight climate change. It will also give the local auto industry a competitive advantage in a market viewed as having huge potential.
In the residential market, METI aims to make net zero energy homes (ZEH) more attractive for both builders and buyers. The government will offer fixed-amount subsidies for new ZEH builders and will underwrite the costs of retrofitting existing houses by one third. The Ministry seeks to have more than half of all new construction meet the net zero energy standard by 2020 as well as double the number of renovations that improve energy efficiency.
METI will also subsidize programs to promote the use of residential fuel cells and lower the costs of solar power. Meanwhile, the Ministry of the Environment will subsidize projects that promote the installation of household water-treatment tanks, along with more energy-efficient refrigeration and air conditioning.
All of these measures will contribute to Japan’s goal of cutting its 2013 level of greenhouse gas emissions by 26 percent by 2030, with a more long-term goal of an 80 percent cut in emissions by 2050. The subsidies announced for fiscal year 2017 reflect the government’s conviction that by supporting innovations in the energy field, Japan can meet its emissions targets while fostering economic growth.
For more information on energy subsidies, contact your regional JETRO office.