Japan's Renewable Energy Amendment: Power Consuming Enterprises Enjoy "Discount"

According to Japan’s “Daily News” report on August 14, on the 12th of this month, the Democratic Party of Japan and the Liberal Democratic Party reached consensus on the amendment to the Special Measures for Renewable Energy Act.

In August this year, the opposition Liberal Democratic Party proposed a revision of the bill in the Special Energy Policy Special Committee. This amendment will increase the cost of purchasing renewable energy and increase electricity charges. Only those companies that involve large amounts of electricity such as steel and chemicals will enjoy "discounting discounts." At the same time, the amendment also stressed that depending on the nature of the energy source, the price will be different. Based on the specific circumstances, there will be different levels of cost increases.

It is expected that this bill will be passed in the 26th House of Representatives meeting and will be implemented in July next year. In order not to affect the post-disaster reconstruction of businesses and families in the earthquake-affected areas of the Great East Japan Earthquake, the addition of electricity charges will be abolished in March 2013.

When negotiating amendments, the handling of power-consuming manufacturing has become a major problem. The Federation of Economic Organizations believes that the additional electricity charges will become a major expense for some enterprises that consume a great deal of electricity, which will have an adverse effect on competition among enterprises. Therefore, the amendment proposes that companies that use electric power more than 8 times the average electric power required by the manufacturing industry will enjoy preferential policies of “20% discount” on additional expenses.