This excerpt taken from the HMC 20-F filed Jul 11, 2005.
2. Fuel Economy / CO2
In 1998, an amendment was made to the Law Concerning Rationalization of Energy Usage that established in Japan a fuel efficiency standard based on weight class. This standard was tightened in 2005 for diesel-fueled automobiles. For gasoline automobiles, tighter standards, to be implemented in 2010, have also been established.
In light of the CO2 reduction targets promulgated in the Kyoto protocol, the Japanese government issued a fuel regulation for an interim ethanol blending limit (less than 5%) which became effective in 2003. The Japanese government intends to further increase this limit until the final target of 10% is achieved within a decade.
In 2005, discussions about the POST 2010 standard began among applicable ministries and industries.
Ethanol blended fuel is a Biomass fuel. Biomass fuel is regarded as an effective countermeasure for CO2 reduction. CO2 emissions after burning ethanol fuel produced with biomass resources (such as plants or wood) are not counted as CO2 emissions under the Kyoto protocol.