Japan is experiencing a surge in data center construction primarily driven by AI development. The nation has also committed to achieving carbon neutrality by 2050. Like other jurisdictions, such as the EU, the Japanese government plans to minimize emissions associated with data centers by implementing energy efficiency measures. These include setting a national average PUE limit of 1.4 by 2030 and a PUE of 1.3 for all new data centers built from 2029 onwards. Operators that fail to meet these requirements will face penalties, though enterprise data centers appear to be exempt.

Regulations for data centers

Japan’s energy efficiency legislation is being expanded to include minimum performance standards and information reporting requirements for data centers. The Act on the Rationalization of Energy Use was one of the first nationwide energy efficiency mandates when it was introduced in 1979. It is now commonly referred to as the Energy Conservation Act or Energy Efficiency Act and has been extended to cover all data centers consuming the energy equivalent of 1,500 kiloliters of crude oil per year — roughly 16,000 MWh. A task force led by the Ministry of Economy, Trade and Industry (METI) and the Agency for Natural Resources and Energy, with support from industry groups including the Japan Data Center Council, is developing the regulations. The final version has not yet been published, but the law is scheduled for revision by March 31, 2026, with implementation expected in April 2026.

Japan’s efficiency measures are likely to resemble those applied under the EU’s Energy Efficiency Directive (EED). The draft regulation proposes setting PUE limits for new and existing data centers, requiring operators to develop medium- and long-term plans to reduce operating PUE and energy consumption intensity, and mandating periodic reporting of data, including energy use and energy consumption intensity.

Data center types

The rule addresses four types of data centers:

• Hyperscaler facilities owned by cloud operators — described as “hosting/cloud (owner) type DC” in the translated document.
• Wholesale colocation facilities leased by cloud operators — “hosting/cloud (tenant) type DC”.
• Retail colocation facilities — “housing-type DC”.
• Non-data center — “Non-DC” in the translated document — is defined as an enterprise facility that performs processing “within the company” for “internal management purposes” or to operate a business such as finance and communications. This category appears to encompass enterprise data centers.

Hyperscale, wholesale and retail colocation data centers appear to be subject to the new requirements, as they are defined as data centers under the regulations. Enterprise data centers operated by banks, telecommunications companies and other large businesses seem to be excluded from data center efficiency rules, as they fall under the “Non-DC” category. However, Uptime Intelligence has not been able to obtain verification of its assessment that enterprise data centers are excluded from the regulations.

Performance and reporting requirements

PUE limits: The proposed regulation requires Japan’s data center industry to achieve an average annual PUE value of 1.4 or lower. Data centers that begin operation in 2029 or later must achieve an average annual PUE of 1.3 or lower within two years of commencement.

Medium- and long-term performance plans: Data center operators will be required to submit these plans for their data center portfolios to the appropriate government ministry. The plans must include design and performance limits for the operating PUE of new data centers, an objective for the operator’s portfolio-wide average operating PUE, and a long-term improvement plan for the energy intensity of data center operations. The PUE performance of new data centers and the rate of improvement in energy consumption intensity must be publicly disclosed.

The regulations will require a 1% annual improvement in “energy consumption intensity”; however, the method for measuring this metric has not been specified. It could represent a PUE improvement, but it might also take the form of a work-per-energy value, as required under the ISO 50001 energy management standard. It is expected that this value will be defined in the final regulation.

Information reporting

The regulation will require periodic reporting of data center information as part of submitting the plans described in the previous section:

• Data included in the report, but not reported publicly — owner, location, contracted power capacity, maximum receiving capacity, electricity usage for IT equipment, building and ancillary equipment, and the equipment operation rate for the complete facility.
• Data that must be publicly reported — data center name, data center operator name(s), year operations commenced, business type usage, annual average PUE, and the average improvement rate of energy consumption intensity. These items must be disclosed for all data centers that enter operation in 2025 or later.

The obligation to report energy use will rest with the specific users of the IT equipment or the building and ancillary equipment. This appears intended to ensure that the regulation captures cloud and enterprise operators in facilities owned and/or managed by colocation providers. While this approach may create complications for energy-use reporting, further guidance is expected in the final regulations.

The draft regulations propose a fine of 1,000,000 yen ($6,000) for operators that fail to meet the requirements.

The regulation relies heavily on PUE and an undefined energy intensity metric to set data center efficiency standards. It makes no mention of other metrics, such as water use efficiency (WUE), renewable or carbon-free energy, or the heat reuse factor. These additional metrics are being considered for future regulations.

Observations and actions

As the EU found with its EED, this data can be problematic (see Incomplete data threatens effectiveness of EED), partly because it may be commercially sensitive or covered by non-disclosure agreements. Japan’s draft regulation notes that the issue of competitive data will be “appropriately handled”, but it does not provide further detail.

Alongside PUE targets, the Japanese government plans to identify efficiency technologies, including AI optimization, and encourage their rollout across 40% of new data centers by 2030 and in all new facilities by 2050. The government hopes to reduce power consumption by 40% by 2030, compared with 2021 levels.

The government also aims to use planning controls to steer new data center projects to low-carbon energy hubs.

Note: The regulatory analysis provided in this report is the opinion of Uptime Intelligence. Data center operators should validate the interpretations with their legal staff and any relevant regulatory authorities.

Other related reports published by Uptime Institute include:
EED status update: implications for data centers 
Data center sustainability standards grow globally