Japanese companies are increasingly looking for overseas carbon credit projects, as demand for carbon offsets is expected to rise further towards the country's 2050 net zero greenhouse gas emissions goal.
Japanese energy firm Iwatani said on 31 July it aims to secure Australian Carbon Credit Units (ACCUs) through an afforestation programme in Western Australia with co-operation with the state government-appointed Forest Products Commission (FPC). FPC in July began planting radiata pine trees in Nanapu, using land owned by Iwatani.
Iwatani expects to generate 19,000t of credits via the afforestation project over 19 years during 2023-41. The company will take all the potentially issued ACCUs, initially aiming to use them in Australia. But it is hoping to utilise the credits in Japan, once the cross-border trading of such credits between Japan and Australia is allowed in the future.
Japanese trading house Itochu said on 28 July it will finance a Kenyan clean cooking stove project to secure carbon credits. A cross-sector group of Japanese firms have also invested in a forestry fund created by Japan's Sumitomo Forestry, which could eventually issue carbon credits through forest management mainly in North America.
Japan is piloting a voluntary carbon credit trading scheme among companies that support the government's green transformation (GX) league, a cross-industry collaboration to achieve carbon neutrality, over the April 2023-March 2026 fiscal years. The voluntary carbon credit exchange market begins with credits generated by members of the GX, as well as credits such as J-Credits and those through the Joint Crediting Mechanism.
Tokyo aims to start an official carbon credit market from 2026-27, then gradually adopt an auction system for emissions allowances, first for the power sector, from 2033-34.
The Tokyo Stock Exchange is to launch a carbon credit market to trade J-Credits in October, after completing test trading over September 2022-January 2023.
