Japan's Tokyo Stock Exchange (TSE) has started trading carbon emission credits, as the country aims to cut emissions by 46% from 2013 levels by 2030 and achieve net zero by 2050. A total of 188 entities have so far registered as participants of the TSE carbon credits trading platform. They will be able to trade “J-Credits”, which certifies the amount of greenhouse gas emissions reduced or removed through efforts to introduce renewable energy, energy-saving equipment or forest management. Credits representing a volume of 3,689 tCO2 have been traded on the first day.
Following this initial step, Japan's version of an emissions trading system (ETS) will begin in 2024 and involve the creation of a forum for green transformation called the GX League. It is expected that about 680 companies (accounting for more than 40% of Japan's emissions) will be given emissions allowances and required to set emissions-cutting targets. By 2026, Japan aims to set guidelines for the ETS and introduce a mechanism for third-party certification of companies' targets. From 2033 or 2034, auctions for emission allowances for power producers will begin.
The Japanese government estimates the public and private sectors will need to invest more than JPY150,000bn (US$1,000bn) in decarbonisation measures over the next 10 years.
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