Japan this month began a trial trading of carbon credits at the Tokyo Stock Exchange (TSE) as the world’s fifth-largest carbon emitter aims to create a nationwide market mechanism to meet its goal of becoming carbon neutral by 2050, reported Reuters.
The TSE, a unit of Japan Exchange Group Inc (8697.T), has been commissioned by the Ministry of Economy, Trade and Industry (METI) to carry out the pilot project as the ministry prepares to create the first exchange-based market for trading carbon credits in Japan, to help participants offset their emissions or monetise reduced emissions.
Under the trial, registered members, numbering 145 as of 22 September, can trade existing carbon credits, known as J-Credits, certified by the government. They have been traded over-the-counter on a voluntary basis since 2013.
The J-Credit scheme is designed to certify as credits the holder’s emissions reductions or removal of greenhouse gases such as carbon dioxide through energy-saving devices, forest management and other methods.
The trial will continue through the end of January, followed by a government review and possible improvements to the system before it is formally launched, said Reuters.
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