Economic and Environment Ministries to Promote Greening of Petroleum Revenue Spending

The Ministry of Economy, Trade and Industry (METI) and the Ministry of the Environment (MOE) announced on November 15, 2002 that they would jointly collaborate to address global warming by reviewing Japan's energy policy. In a move advocated by the MOE, the two ministries agreed to promote environmental protection-related use of the nation's special budget of petroleum tax revenues, which has always been kept separate from the general national budget and heretofore used mainly for government spending on petroleum supply infrastructure, etc.

To promote the greening of the special petroleum-revenue budget, not only METI but also MOE will be able to make allocations from this account.

At the same time, the energy taxation code will be amended to promote environmental protection uses of these funds. An energy tax will be newly imposed on coal at the rate of 700 yen (about U.S. $5.9) per tonne. Also, the rate of the energy tax on LPG (liquefied petroleum gas) and LNG (liquefied natural gas) will be raised to a uniform level of 1,080 yen (about U.S. $9.1) per tonne, from 670 yen (about U.S. $5.6) and 720 yen (about U.S. $6.1) respectively. These tax reforms will take effect on October 1, 2003, but the tax rates will be raised in two steps: first on April 1, 2005, and then again on April 1, 2007.

These tax reforms will be implemented as part of the greening of the special petroleum budget. However, the objective of these energy taxes is different from that of a separate pending environment tax, the primary aim of which is to reduce carbon dioxide emissions.



Posted: 2003/07/01 09:26:22 AM
Japanese version