METI, the Japanese ministry of economy, trade and industry, is planning to levy a new CO2 emissions tax on the electricity sector effective from the next fiscal year. The new tax will be applied to coal and LNG, based on their proportional emissions. A similar tax on oil already exists, amounting to 2040 JPY (yen) per kilolitre, along with a fuel tax on LNG of 720 JPY. About half the revenues from these taxes are allocated to subsidise oil substitution measures, including measures to develop new enerby production and conservation technologies. Half the LNG tax goes towards improving physical security measures, and this proportion will be maintained, to which will be added the new carbon tax. In the case of coal, ‘carbon-converted’ tax will be calculated and applied.
The effect will be an increase in tax revenue for the government, to be collected in a special account set aside to support funding for new energy sources, and a newly created energy account. An existing tax for power source development will in fact be reduced, to the tune overall of 50 billion JPY, but the net effect of the two taxes will be an increase in the tax burden of some 10 billion JPY.
Nuclear officials are saying that while the tax can be seen as favouring the economics of nuclear power, its introduction is certain to meet with opposition from the energy industry because it increases the total tax burden.
