First "Green Procurement" of Electricity in Japan

October 27, 2004
Bureau of Environment

The Tokyo Metropolitan Government (TMG) has conducted environmentally friendly procurement according to the TMG Policy for Green Procurement Promotion, and campaigned to reduce strain on the environment arising from day-to-day work operations.

In an effort to promote the use of renewable energies, TMG has designated "electricity" as an item subject to green procurement, and mandated that large metropolitan facilities that consume more than a set amount of power arrange electricity procurement with consideration to global warming.

As the first step, in November, the Edo Tokyo Museum will become the nation's first public facility to make "Green Procurement" of electricity.

The program will continue to be expanded.

* What is the TMG Policy for Green Procurement Promotion (effected in April 2003)?

The Policy stipulates that TMG bureaus procure environmentally friendly goods, with the aim of reducing strain on the environment arising from day-to-day operations.

The Green Procurement program generally covers the purchase of consumables / fixtures and arrangement of printing / document binding. However, TMG takes the stance of applying the Policy to services, leases and other areas as much as possible. "Electricity" has been added to the list in FY2004.

* The significance of making Green Procurement of Electricity

TMG will seek the use of renewable energies for at least 5% of overall power consumption to promote the use of such energy. (The RPS [Renewable Portfolio Standard] Law stipulates that electric power businesses use renewable energies for at least 1.35% of total power generation).

* What are renewable energies?

(1) Solar energy, (2) wind energy, (3) biomass energy, (4) small- mid-level hydro energy and (5) geothermal energy.

[Reference]

Overview of TMG's Green Procurement

Promotion of green procurement by TMG, Tokyo's largest business entity and consumer, will expand the market for environmentally friendly products; support manufacturers' initiatives in product development / distribution for lower environmental strain; encourage Tokyo residents, businesses and other local governments to purchase such products, thereby contributing to the achievement of a sustainable society.

(1) In FY2002, TMG integrated the "Guide for Environmentally Friendly Goods Procurement (April 2002)" and "Policy for Promoting Green Procurement in TMG Goods (August 1999), to develop the TMG Policy for Green Procurement Promotion (April 2003), setting out how TMG must conduct green procurement.

(2) Every year, TMG issues the TMG Green Procurement Guide, listing specific items and requirements.

The revision in FY2004 added "electricity as an item subject to measures against global warming.

Subject facilities: Facilities with access to the liberalized retail electricity market*. The provision applies to competitive electricity purchase.

*Facilities with access to the liberalized retail electricity market: Large facilities receiving at least 500kW of high-voltage electricity (6,000V or over). Such facilities are designated under the Electricity Utilities Industry Law.

For details, see the TMG Policy for Green Procurement Promotion and TMG Green Procurement Guide.

URL http://www2.kankyo.metro.tokyo.jp/kikaku/green-guide/index.htm (Japanese only)

Since 2000, Japan's retail electricity market has been partially liberalized, setting off a price competition in this sector. This is expected to reduce electricity costs.

However, the process of competitive electricity procurement does not take environmental concerns into account. As part of its measures to counter global warming, TMG has introduced Green Procurement in electricity, with a requirement on environmental consideration as well as cost, with the aim of reducing strains on the environment.