Japan aims for increased use of nuclear in latest energy plan

In December, Shimane 2 became the latest Japanese reactor to be restarted (Image: Qurren/CreativeCommons)

Japan is to "make maximum use of nuclear power", with about 20% of the country's total electricity generation in fiscal 2040 coming from nuclear, according to the government's latest Basic Energy Plan. Previous plans have called for a reduction on its dependence on nuclear power.

The Japanese government revises its energy plan about every three years. The plan is formulated based on the Basic Energy Policy Law enacted in June 2002. The latest plan, like its predecessors, recognises the necessity of energy security for the country, which is poor in fossil fuel resources. The policy includes commitments to "clean energy" initiatives but places emphasis on ensuring stable and secure energy supplies. The Advisory Committee for Natural Resources and Energy started discussions on the 7th Basic Energy Plan in May 2024 and presented the draft version of the plan in December. It has since gone through a public comment procedure and other processes.

Adopted on Tuesday by the cabinet, the 7th Basic Energy Plan calls for nuclear electricity generation to increase from 8.5% in fiscal 2023 to about 20% in fiscal 2040. Renewable energy's share of total electricity production, meanwhile, is expected to increase from 22.9% to 40%-50%, with fossil fuels' share dropping from almost 69% to 30%-40%.

Prior to the March 2011 accident at the Fukushima Daiichi plant, Japan's 54 reactors had provided around 30% of the country's electricity. However, within 14 months of the accident, the country's nuclear generation had been brought to a standstill pending regulatory change.

Since then, 14 reactors have gradually resumed operation. The country's policy since 2014 has been to reduce its dependence on nuclear power as much as possible.

To achieve a 20% share for nuclear by fiscal 2040, the majority of Japan's 36 operable nuclear reactors - including those currently under construction - will have to be operational.

"At present, in the Kyushu and Kansai areas where nuclear power plants are being restarted, the proportion of decarbonised energy sources is high, and electricity prices are up to 30% lower than in other areas," the plan notes. "In addition, the benefits of restarting nuclear power plants are being passed on to consumers in the form of lower electricity prices, etc."

In February 2023, Japan's Cabinet approved a policy to allow new nuclear power reactors to be constructed and the operation of existing reactors to be extended from 40 to 60 years.

"Before 2040, more than 3 million kW of existing reactors will reach 60 years of operation, and after that, the supply capacity of existing reactors as decarbonised power sources will be significantly lost," the plan says. "In order to secure the decarbonised power sources necessary for economic growth and improvement of the people's lives in 2040 and beyond, it is necessary to take into account the fact that a fairly long lead time of about 10 to 20 years is necessary.

"In order to utilise nuclear power as a decarbonised power source, we will work on the development and installation of next-generation innovative reactors that incorporate new safety mechanisms, aiming to improve the safety of nuclear power."

The government said it will proceed with the "concrete implementation of next-generation innovative reactors" on the sites of operators who have decided to decommission nuclear power plants, "only if they contribute to the maintenance and development of local industries and employment and can obtain the understanding of the local community".It added: "In addition, we will continue to work on technological development toward the practical application of other next-generation innovative reactors, such as fast reactors, high-temperature gas reactors, and fusion energy." Japan aims for increased use of nuclear in latest energy plan

Read More........ → February 20, 2025

With billions in ‘profit’ exempt from tax, changes to NZ’s charity rules are long overdue

Jirsak/Shutterstock Ranjana Gupta, Auckland University of Technology

The profit made on every breakfast bowl of weet-bix is tax exempt, giving Sanitarium Health Food Company, owned by the Seventh-day Adventist Church, an advantage over other breakfast food companies. But this could be about to change.

Under current rules, New Zealand’s charities are allowed to run businesses as long as the profits are not for personal gain. This means the government gives up millions in tax revenue from charities across the government.

In December, Finance Minister Nicola Willis proposed revising the tax rules for charitable organisations. The changes are set to be announced with this year’s Budget. According to Willis, there was about NZ$2 billion of “profit” in the charitable sector that was not subject to tax.

My new research – to be published later this year – looks at the integrity and fairness of the taxation framework that gives exemptions to charitable organisations competing directly with the for-profit sector.

Striking the right balance between supporting legitimate charitable activities and preventing the abuse of tax concessions is crucial for ensuring a level playing field in the tax system.

My study shows the tax exemption system in New Zealand, as it stands now, is not really fair and equitable. And it is past time for this to change.

For the public benefit

Under New Zealand’s charity law, a charitable organisation must operate for the public benefit and relieve the government of its burden to provide welfare services and assist disadvantaged people.

A paper prepared by the Tax Working Group, an advisory group that looked at New Zealand’s tax system between 2017 and 2019, estimated 30% of registered charities were likely to have some sort of trading activities, such as second-hand stores.

To be eligible for tax exemptions, any gains from businesses must be reinvested in the organisation’s charitable activities.

The traditional justification for granting charitable organisations tax concessions is that they are dedicated to the greater good of society. The concessions are also meant to offset the disadvantages charities face in accessing capital.

But by treating the producers of identical goods and services differently, there is a risk of compromising horizontal equity principles – basically the idea that taxpayers in similar positions should pay similar amounts of tax.

There are concerns for the tax system’s integrity when charitable organisations shift their focus from providing a public good to providing private or unrelated goods (commercial activities).

In these cases, it is clear that tax breaks should be limited.

When governments offer tax breaks, they forego tax revenue. Governments end up having to raise money from other sources to meet their total tax collection targets, such as increasing tax rates on non-exempt firms, items and individuals.

Taxing unrelated activities

Overseas tax systems take a different view of exemptions for charities, offering examples for New Zealand to follow.

In the United Kingdom, for example, charities cannot undertake commercial trading activities unrelated to their charitable purposes while claiming exemption from income tax. This ensures fair competition between commercial activities.

In the United States, “unrelated business income” is subject to tax, restricting concessions to ensure the tax regime matches conventional tax policy or social welfare policy.

In Australia, commercial trading unrelated to the charity’s core purpose is not allowed.

Ensuring transparency

To ensure greater transparency over who gets an exemption, the financial statements of all charities in New Zealand should also be filed on the Charities Register. These statements should be publicly available.

Charities also need to become more responsible and equitable in their operations. There needs to be stricter regulation, and compliance measures should be implemented. These would prevent tax exemption misuse that benefits a specific group or individuals.

The time for reviewing charitable purposes is long overdue in New Zealand, particularly given the UK and Australia have set out their concepts of charitable purposes in recent years.

Ranjana Gupta, Senior Lecturer, Accounting Department, Auckland University of Technology

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Read More........ → February 19, 2025