Deloitte Tohmatsu Publishes a whitepaper on “Realizing the Carbon Reduction Potential of the Cloud in Japan”

TOKYO, JAPAN, 19 April 2021

Deloitte Tohmatsu Consulting LLC., a member of the Deloitte Tohmatsu Group, published a white paper entitled " Realizing the Carbon Reduction Potential of the Cloud in Japan " commissioned by Amazon Web Services Japan, Inc. that outlines recommendations and issues to promote the adoption of cloud computing as one of the measures to achieve carbon neutrality by 2050.

The cloud is chosen by users for its agility, cost benefits, the convenience of broad network access, fast scalability, and security. However, the environmental benefits of moving to the cloud have not received as much attention as they could have.

The white paper discusses the efficiency of cloud computing, noting that cloud computing offers significant energy efficiency advantages over traditional on-premise computing in terms of structural efficiency, operational efficiency, and spillover effects on the grid as a whole, as well as the ability to achieve carbon neutrality by using renewable energy to power cloud services.

First of all, it makes the following recommendations on measures necessary to expand the adoption of cloud computing for improving energy efficiency.

Recommendations for policies and opportunities relevant to the private sector’s cloud adoption

• Consider cloud adoption as a qualified energy-saving solution
• Promote cloud-based smart grids, real-time energy management, and VPP solutions
• Include cloud adoption in the scope of prefectural and municipal programs to encourage energy efficiency
• Expand tax incentives to include corporation filing blue form tax return and include cloud services costs of qualified data centers as an eligible cost

Recommendations for policies and initiatives relevant to the public sector’s cloud adoption

• Set a more ambitious cloud adoption goal and a timeline for ministries and government agencies
• Redesign the operating budget expenditures of ministries and government agencies to accelerate digitalization
• Ensure the harmonization between the national government’s carbon neutral objectives and prefectures’ initiatives
• Increase the number of cloud-based products and services in the list set out by the Green Purchasing Act
• Review of expenditure budgets to promote digitalization
• Enable disaster recovery and climate pattern projection through cloud technology
• Support the business continuity operation of the cloud infrastructure as it provides the important infrastructure in case of natural disaster

In addition, the white paper presents the following summary of possible points of discussion on "Improving Access to Renewable Energy," which is required to apply renewable energy to the operation of cloud services.

• Be ambitious in setting out higher renewable energy targets for 2030
• Review the current first-come, first-served system and increase grid-loading capacity
• Maintain FIP (Feed-in Premium) reference price close to market rates
• Consider adjustment of the FIT (Feed-in Tariff) levy payment on non-FIT renewable energy
• Enable consumers contracting via PPA to directly source renewable energy from energy generators and ensure the bilateral transferability of non-FIT non-fossil fuel certificates (NFCs)
• Diversify environmental value trade methods in the form of RECs (renewable energy certificates) including NFCs (Non-Fossil Fuel Certificates), such as direct transfer of non-FIT NFCs between generators and consumers

Please refer to the white paper released on April 19, 2021, for more details on specific proposals and issues.