Recently, the Ministry of Economy and Industry of Japan proposed to launch a national demonstration carbon credit trading market in the fiscal year 2022-2023, but there are still differences between it and the Ministry of Environment of Japan on how to price carbon. The industry generally believes that Japan has not yet found the best way to achieve large-scale emission reduction without adding additional economic burden to enterprises. & nbsp; & nbsp;
Plan to launch in 2022-2023 & nbsp; & nbsp;
Japan's Ministry of Economy and Industry said that as part of achieving the goal of carbon neutrality by 2050, it plans to launch a national demonstration carbon credit trading market from April 2022 to March 2023 in order to vigorously promote the monetization of carbon emission reduction, encourage more local enterprises to reduce emissions independently, and also open up to multinational corporations. It is expected that 400-500 companies will participate.
The carbon credit trading market will also be open to ASEAN countries, as well as companies from other countries such as Europe and the United States. Participants can buy carbon credits to reduce their emissions, and they can also sell unused credits. However, participating companies must disclose their emissions and allow the government to review them annually.
It is reported that Japan plans to design a carbon credit trading system and develop a carbon footprint monitoring infrastructure under the framework of the carbon credit trading market to better manage and process carbon credit trading. Further discussions are needed to clarify the overall structure and implementation details of the carbon credit trading market, which may involve carbon neutral products, said Wenbo Sakagawa, director of the Environmental Economy Office of
Japan's Ministry of Economy and Industry. "We will introduce carbon neutral products on a voluntary basis, such as carbon neutral LNG, which is becoming more and more popular." "However, it will take several stages of discussion before a conclusion can be reached," he said. Argus, an
energy consultancy, points out that Japan is considering a carbon credit trading market in the hope of reducing greenhouse gas emissions through an appropriate domestic carbon pricing mechanism, while promoting Japan to become one of the important carbon emissions trading centers in Asia. & nbsp; & nbsp;
Many Japanese companies have tested the carbon price on their own & nbsp; & nbsp; The industry generally believes that if Japan wants to achieve its emission reduction target, it will need to start with enterprises, especially those carbon-intensive or high-emission enterprises. In fact, more and more Japanese enterprises have begun to implement internal carbon pricing or introduce carbon neutral products, which provides support for the establishment of Japan's national carbon credit trading market.
Japan's Kyodo News Agency recently reported that more and more Japanese companies have introduced internal carbon pricing mechanisms as part of decarbonization measures, which is a measure to convert the cost of carbon dioxide emissions generated by business activities. It is becoming more and more common for Japanese enterprises to use this measure to judge investment criteria, which lays the foundation for the full development of Japan's carbon mechanism.
It is understood that Japan's Teijin Corporation, the world's second largest carbon fiber manufacturer, introduced internal carbon pricing earlier this year. Shuichi Osaki, head of the company's corporate social responsibility planning and promotion department, said, "We set the price of carbon dioxide emissions per ton at 6000 yen (about $54)." As a reference for investment decision-making, even if the initial investment is small, if the carbon dioxide emissions are large, the cost will double in the future, thus affecting the investment. Kuraray, the
Japanese chemical industry conglomerate, plans to introduce internal carbon pricing in March next year. The Carbon Disclosure Project, an international non-profit organization, surveyed more than 300 major Japanese companies and found that 31% of the companies surveyed had introduced internal carbon pricing and 33% planned to do so within two years. & nbsp; & nbsp;
Obstacles to implementation & nbsp; & nbsp;
S & P Global Prussian pointed out that Japan's brewing national demonstration carbon credit trading market, the most needed is trading volume and liquidity, although the country said it would gain experience from existing carbon tax, carbon pricing, carbon trading and other mechanisms, but considering that the effectiveness of Japan's operation of such mechanisms has been unsatisfactory. The implementation of the carbon credit trading market still faces many obstacles.
It is understood that after several iterations in the carbon pricing mechanism, Japan has implemented a nationwide carbon tax measure and experimented with a variety of institution-led carbon emissions trading and carbon offset project systems at the national level, but the results are uneven. These include voluntary carbon emissions trading system JVETS, carbon emissions credit system J-Credit, joint credit mechanism and so on.
Among them, JVETS was born in 2005. Based on the principle of cap-and-trade, the system covers all direct carbon dioxide emissions and indirect emissions from power enterprises. Due to low participation, low trading quantity and frequency, and low trading price year by year, JVETS ended its operation in 2012.
It is noteworthy that industry groups such as the Japan Federation of Economic Organizations and the Japan Petroleum Association have generally questioned the effectiveness of the carbon mechanism. They regard emissions trading or carbon tax as a single mitigation tool, saying that both are based on the polluter-pays principle, transferring the cost of pollution to the polluter, increasing the burden on enterprises and reducing the cost of pollution. It indirectly lowers the global competitiveness of Japan's industrial manufacturing industry.
In addition, Japan began to levy a carbon tax on the oil and gas industry in 2012, with a tax of 2,800 yen (about $25) per ton on crude oil and petroleum products and 1,370 yen (about $12) per ton on liquefied natural gas and liquefied petroleum gas. Some Japanese tax and energy experts pointed out that Japan needs to substantially increase carbon pricing, otherwise it will be difficult to achieve medium-term emission reduction targets, and the level of carbon tax alone needs to be increased by at least 30 times.
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