Green IT Initiative in Japan

1. Green IT Initiative in Japan Ministry of Economy, Trande and Industry Japan

2. 1. Basic concept of Japan’s “Green IT” Traditional concept of “Green IT” focuses mainly on how to reduce energy consumption of IT equipment and systems including data centers. Japan’s “Green IT” concept focuses on both “Saving energy of IT” and “Energy-efficient society by IT”. Saving energy of IT Energy-efficient society by IT • Energy consumption factories was successfully cut 20% by introducing energy optimum management systems. • Electric appliances are getting more energy-efficient year by year. • (e.g.) Energy consumption of fridges has decreased by 40-50% over the past decade. • Introduction of electronic measurement technologies lead to a 60% improvement in CO2 emissions rate over the last 15 years. • The advent of a information society has lead to skyrocketing energy consumption by IT devices. More efforts for our society to be energy efficient • Halving energy consumption of data centers • Optimum control of industrial complex by IT • Reduction in energy consumption for communication to 1/100 by using photonic technologies • Visualization of environmental contribution by using IT including measurement devices

3. 2. 2% vs. 98% issue: IT is more contributor than polluter While CO2 emission by IT industry is less than 2% of that of whole Japan, IT contributes to reduction of CO2 emissions in other 98% areas. Total CO2 emissions of Japan in each sector 1.3 billion t Others 7% Transportation 20% IT4% Energy Cony Others10% 6% Home 13% Steel 43% Cement5% Paper5% Industry 34% Business 18% Elec.power 8% Petroleu 9% Chemical 16% ＩＴ 1.5%

4. 3. Overall Energy Savings to Society Created by IT IT will make an enormous contribution to conserving energy and raising efficiencies across a broad spectrum of social activities. • Use of energy-saving home appliances and LED illumination • HEMS and BEMS (IT is used to manage energy use) Consumer areas (homes, appliances, etc.) • Advanced automotive electronics improves fuel mileage Business areas (office buildings) • Telecommuting, videoconferencing, online sales, and other Internet applications make society more efficient • Ecological driving with the use of ITS, ETC, and other technologies Transportation areas (cars, trains, etc.) Industrial areas (factories) • RFID tags lead to more efficient distribution • Power electronic devices • IT control systems reduce energy consumption • More energy efficient IT devices and systems Public infrastructure: IT energy conservation

5. 4. Development of the Green IT Initiative The first Green IT Initiative Conference was held in December 2007. At the conference, METI proposed that industry, academic, and government bodies join together in a national partnership to push forward Japan-originated Green IT along two axes: reduce energy consumption in the IT sector itself and harness IT to reduce energy consumption in society at large. Strengthen Cooperation among Industry, Academia, and Government ■ Establishment of the Green IT Promotion Council Created as a venue where IT-related industry groups, technology development bodies, universities, government bodies, and others can come together to work on Green IT International Partnerships and Collaborations Goverment’s Role ■ Assist the development of innovative technologies ■ Promote the widespread use of energy-efficient technologies and products ■ Study ways of measuring environmental contributions • ■ Hold international symposiums • ■ Form partnerships with overseas bodies • • Western corporations and consortiums • • Collaborations with Asian industries and governments

6. 5. Promote the Development of Innovative Technologies METI intends to realize green cloud computing as the next-generation IT infrastructure, which will make it possible to slash energy consumption while significantly raising the efficiency of IT usage in the service industry, the manufacturing industry, and the IT user industry. Green Cloud Computing Project (Requested a budget of ¥6.8 billion for FY 2009 (FY 2008 budget was ¥3.0 billion)) Energy savings at the data-center level Energy savings at the semiconductor level Energy savings in IT devices and systems • Innovative energy-saving semiconductors (many-core technology, etc.) • Power electronic devices • Optimization of data traffic and storage on networks • High-efficiency cooling/heat-removal technologies • Device-level cooling technologies • High-density storage technologies • Ultra-efficient routers

7. 6. Establishment of the Green IT Award The Green IT Award was established this year to accelerate Green IT endeavors by industry and academic bodies. The Minister of Economy, Trade and Industry Award, Commerce and Information Policy Bureau Director-General Award, and the Green IT Promotion Council Chairman Award, among others, were presented on September 30. Energy conservation within the IT field Minister of Economy, Trade and Industry Award ECO CENTER energy-saving server, NEC Corporation Commerce and Information Policy Bureau Director-General Award Xeon processor, Intel Corporation Energy conservation using IT Commerce and Information Policy Bureau Director-General Award Minister of Economy, Trade and Industry Award Lifinity Eco Management System home energy management system, Matsushita Electric Works, Ltd. Construction and operation of the air-conditioning system at the Sony City Building, Sony Corporation and Sony Life Insurance Co., Ltd.

8. 7. Promotion of “Green electronics” by using “Eco Points” Framework 2. Entry of the eco point Order eco friendly products Electronics Maker Reduction of CO2 Delivery of the product Consumer Eco Point Office Home appliance store ・Air conditioner ・Refrigerator ・TV （High Energy efficient product） 1. Purchase of the Product 3. Delivery of Eco friendly products Request for financial support Provide financial support (1)Purchase of high energy efficient products (2)After the entry of the eco point via PC, cell phone, mail, the eco point is available for the purchase of eco friendly products or service. (3)Delivery of Eco-friendly products or service Government - The eco point is available for the purchase of eco-friendly products or service Concept of the Eco Point ＊ " Eco-friendly" means "Environmentally-friendly" - About 5% of the purchase price of “Green electronics “(energy efficient A/C, Refrigerator, TV) is added as the Eco Point - An extra 5% is added in case of TV（for the promotion of the digital broadcast) - A recycling charge is also added to the eco point

9. 8. IT Society in Harmony with the Environment The amount of “energy-savings by IT use” will exceed that of “energy consumption of IT devices” and IT can contribute the reduction of energy consumption of whole society if “Green IT” is actively promoted. 240 Billion kWh 100 *20million t CO2 equivalent Billion kWh 50 140 2006 2025 Year *110million t CO2 equivalent 490 Billion kWh

10. 9. Mechanism to Assess Contributions to Green IT To keep Green IT developments moving forward, we need a mechanism that provides accurate assessments of corporations’ efforts to proactively market energy-efficient products and services. This mechanism must be constructed in tandem with international partnerships. Environmental contributions should be measured with a total lifecycle assessment (LCA) from production to use and finally recycling. Example: Whole society A’s contribution actually reduces the total amount of CO2 Company A In terms of corporate activities (production), A emits much more CO2 Develops a cutting-edge energy-efficient air-conditioning unit Due to market demand, A manufacturers and sells a large number of units Company B In terms of corporate activities (production), B emits much less CO2 than A Produces a standard air-conditioning unit Neither production nor sales increase A mechanism is needed that makes proper assessments like this A’s contribution > B’s contribution

11. 9-1. Mechanism to encourage Green IT activities Production Item: Air conditioner Current Year Last Year Production: 1.5 million units Company A Production: 1 million units Increase in production by 500 thousand units with launching of energy-saving air conditioner which halves CO2 emissions CO2 Emissions CO2 Emissions Production process: 100kt-CO2 Production process: 150kt-CO2 Operation process in homes: 300kt-CO2 Point 1 Production: 500 thousand units Company B Decrease in production by 500 thousand units affected by the boom of energy-saving air conditioner. Production: 1 million units CO2 Emissions CO2 Emissions Production process: 50kt-CO2 Production process: 100kt-CO2 Operation process in homes: 300kt-CO2 Production: 2 million units Total Total Production: 2 million units Production process: 200kt-CO2 Production process: 200kt-CO2 Point 2 Operation process: 375kt-CO2 Operation process: 600kt-CO2 Point 1 Should Company A need to buy emission credit from Company B? Point 2 Is this reduction in CO2 emission allowed to be used by Company A as a credit?

12. 10. Proposal for a new framework 1）Quantify impact in an online environment 2）Insentivise manufacturer and user energy efficiency National Credit Board （e.g：10 year use） Old product New product Top runner standard CO2credit CO２ Credit Certification CO2emissions ×5 years (approx 15 years product life) 1/3? 1/6? 1/2? Consumer Contribute to CO2 reduction through product replacement Retail Contribute to CO2 reduction through product sales Manufacturer Contribution through product development and manufacturing Recycle sell Sell or purchase Electronics Recycling Vouchers Operating Body Confirm evidence Management and sales transaction intermediary Net environmental impact CO2 emission amount Environmental contribution = － Confirm recycle via registry defined in household electronics recycling regulation （=Guarantee CO2 reduction） Contribute to industry target Consider relationship with emissions trading schemes

13. （Note 1）Distributing env contribution throughout the supply chain CO2 credit Env. Contribution by manufacturer Set manufacturer A’s contribution Manufacturer 1/2 Manufacturer A= 2/3×1/2 = 1/3 ×1/2= 1/2 • Framework is similar to “carbon neutral” efforts by various corporations. With the new framework, evaluation and measurement methods become standardized and promotes the circulation of reliable information. • Carbon labelling already takes manufacturing and use into account for products. The approach is compatible. We have already began displaying reduction throughout the lifecycle for light bulbs. • The scheme has been presented to OECD, EU, and the united states and have received praise. Retail Parts X （Company A） 1/6 1/6 Company B= 1/6×1/2 = 1/12 Parts Y （Company B） ×1/2= 1/6 Consumer 1/3 Parts Z （Company C) C=1/24 Company C（Tier1） ×1/2= Parts α（Company DTier2） D=1/48 1/6 ×1/2= parts β（Company DTier3） E=･･･ (Note 2) Evolution of net impact approach

14. 11. Widening the scope in the future ・Improvement of recycled materials utilization ratio Row Materials Virgin materials ・Reduction in CO2 emission by efficiency improvement ・R&D (Manufacturing process development, product development, etc.） Manufacturing(Parts) To other industries Environmental impact of IT should be measured not only by the CO2 emission through the use of IT but also by other factors throughout the product life cycle Design ・Environmentally friendly design Recycling ・Improvement of collecting and recycling rate ・Saving natural resources ・Reduction in CO2 emission by efficiency improvement ・R&D (Manufacturing process development, product development, etc.） Manufacturing(Products) ・Enhancement of energy-saving awareness through introducing eco labeling system ・Saving packaging materials Distribution 【Business】 ・Use of eco-friendly IT equipment and system ・Efficiency improvement by use of ＩT (e.g. telework, distribution) 【Home】 ・Reduction in power consumption by use of eco-friendly equipment Use Disposal

15. 12. Overview of Local Efforts to Make Visible the CO2 Emissions of Energy-Saving Home Appliances Overview Supplementary budget of ¥250 million for FY 2008 ●Make the CO2 emissions visible before and after replacing home appliances in environmentally active localities ●Accelerate the adoption of environmental policies by localities through more accurate measurements of the benefits of CO2 reductions; also apply the gained benefits to the Home Appliance CDM (Clean Development Mechanism) System (tentative name), which is now under study Background and Strategic Significance ●Gauging CO2 levels is essential to advancing the Home Appliance CDM System (tentative name) ● This project aims both to accelerate related policies taken by localities and to advance the Home Appliance CDM System (tentative name), which is now under study, by using actual data, which includes local characteristics, in the system Make it possible to see the amount of electricity used in homes Monitors report on the usage of their home appliances ((1) air-conditioning units, (2) refrigerators, and (3) TVs) with energy-saving monitor units that make it easy to see and understand how much home appliances are being used. Apply in the Home Appliance CDM System Use in local measures Apply the benefits of switching to energy-efficient appliances to local measures, such as using them for publicity or community currencies as well as establishing CO2-free zones. *Target localities will be selected by application (expect to select six to 10 localities). The condition on selection is that the locality will use the gained benefits in their environmental policies.