Japan Signals a Measured Path on Hourly Matching: Insights from METI’s Latest Policy Deliberations

Within committees established by the Ministry of Economy, Trade and Industry, active discussions have been underway since the second half of 2025 regarding the appropriateness of introducing hourly matching, an approach closely aligned with emerging requirements for GC-EACs, or Granular Certificates of Energy Attribute Claims.

These discussions have now been consolidated into an interim report, providing a clear indication of Japan’s current policy direction. While the report stops short of endorsing immediate implementation, it explicitly acknowledges the need for continued examination. Public consultation on the report also revealed strong support for adopting hourly matching, to which METI has provided structured responses.

In this article, we examine the substance of these discussions and explore their implications for the future direction of Japan’s electricity and environmental attribute markets.

Institutional Context: Committees Driving the Debate

The Subcommittee on Mass Introduction of Renewable Energy and Next-Generation Power Networks, commonly referred to as the Network Subcommittee, operates under METI’s Advisory Committee for Natural Resources and Energy. It is overseen by the New Energy Systems Division within the Agency for Natural Resources and Energy.

This subcommittee serves as a central forum for discussing a wide range of policy issues, including the expansion of renewable energy as a primary power source, the development of next-generation electricity networks, the strengthening of business discipline, regional integration, and the deployment of distributed energy resources.

In parallel, the Working Group on System Design operates under the Electricity and Gas Basic Policy Subcommittee. It plays a more technical and operational role, focusing on the design and ongoing refinement of Japan’s five electricity markets, namely the baseload market, the indirect transmission rights market, the capacity market, the supply-demand adjustment market, and the non-fossil value trading market.

Key Discussions within the Committees

At the 74th meeting of the Network Subcommittee on June 3, 2025, Committee Member Nagayama emphasized that as RE100 requirements evolve, certificate systems must evolve accordingly.

He explained that “new concepts such as timestamps are being introduced, and Japan should align with international trends that enable non-fossil certificates to carry 30-minute or 15-minute granularity, allowing them to serve as proof of real-time 100 percent renewable energy achievement.”

In response, Mr. Higurashi, Director of the New Energy Systems Division, stated that “the Secretariat will examine these points and, in coordination with relevant councils, organize the issues from the perspectives of decarbonization and electricity pricing.”

At the 76th meeting on September 30, 2025, Committee Member Arashi further argued that “certificates should be designed with finer temporal granularity, ensuring alignment between generation and consumption periods, thereby enhancing willingness to pay among consumers, while enabling a phased and flexible procurement environment.”

Building on these discussions, at the 108th Working Group meeting on October 29, 2025, METI officials explained that “discussions will proceed while closely monitoring developments in the GHG Protocol and broader trends surrounding non-fossil certificates.”

They also indicated that “as international frameworks evolve, Japan may need to align accordingly, and efforts to enhance usability will be pursued while carefully observing developments.”

Positioning within the Interim Report

The interim report consolidates discussions on institutional revisions, reflecting both initial market design and issues that have emerged through implementation.

It is a formal policy document published following a public consultation process and serves as a compass for future market development.

Within this report, hourly matching and timestamping are not treated as standalone policy initiatives. Rather, they are positioned within the broader theme of enhancing the usability of non-fossil certificates.

The report identifies several areas for consideration, including the expansion of tracking information, the review of certificate validity periods, the resale of non-FIT certificates, and alignment with international developments. It also emphasizes the importance of taking into account evolving domestic and global business environments in future discussions.

Public Consultation: Strong Signals from Market Participants

Public comments on the Working Group’s draft report further reinforced the urgency of the issue.

Stakeholders emphasized that Japan must not fall behind in responding to GHG Protocol revisions and that preparation for a global shift toward hourly matching is essential. They also highlighted the need to introduce timestamping for non-fossil certificates, enable time-shifting of green electricity through grid-scale storage, and consider the creation of forward markets as well as the extension of certificate validity periods.

In response, METI stated that “we will continue to closely monitor discussions on the GHG Protocol Scope 2 Guidance and broader developments in environmental attribute markets.”

It further clarified that “enhancements such as expanded tracking, timestamping, and improved certificate usability will be considered, taking into account the views received.”

Policy Outlook: Strategic Caution with Clear Direction

Taken together, these developments indicate that METI and the Agency for Natural Resources and Energy clearly recognize both the importance of hourly matching and its alignment with global trends.

However, Japan is not yet at the stage of incorporating these concepts into binding market design or regulatory requirements.

Instead, the current approach can be characterized as maintaining the existing market structure, in which electricity and environmental attributes are treated separately, while positioning hourly matching within the broader framework of usability enhancements and as a medium- to long-term policy issue.

Looking ahead, Japan is expected to monitor the evolution of the GHG Protocol and RE100 requirements, assess how international rule changes translate into domestic demand, evaluate impacts on market participants, and proceed with phased and adaptive implementation.

This is likely to involve the expansion of tracking systems, the introduction of timestamping mechanisms, and a gradual transition toward time-based matching frameworks.

Way Forward

Japan’s approach reflects neither resistance nor rapid adoption, but rather a calibrated strategy.

By embedding hourly matching within the broader context of certificate usability and aligning it with international developments, METI is laying the groundwork for a transition that is both technically robust and market-responsive.

For international stakeholders exploring entry into Japan’s energy and environmental attribute markets, this signals a system in transition, one that is moving deliberately while maintaining a clear awareness of emerging global standards.