Japan starts TSE carbon credit trading trial

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TOKYO: Japan began trading carbon credits on the Tokyo Stock Exchange (TSE) on Thursday as the world’s fifth largest carbon emitter aims to create a nationwide market mechanism to help achieve carbon neutrality by 2050.

The TSE, a part of Japan Exchange Group Inc, has been tasked by the Ministry of Economy, Trade and Industry to conduct the pilot project as the Ministry prepares to establish the first exchange-based market for trading in carbon credits, to help participants offset their emissions or monetize the reduced emissions.

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Under the trial, registered members, numbering 145 as of Thursday, will be able to 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 the holder’s emission reductions of greenhouse gases such as carbon dioxide as credits, as well as emission prevention or removal through energy-saving devices, forest management, and other methods.

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On the TSE, trading hours are 9:00am-11:29am and 12:30pm-2:59pm (0000-0229 and 0330-0559 GMT). Transaction prices are set twice a day and published after trading hours.

The trial will run until the end of January, followed by a government review and possible improvements to the system before its formal launch.

“If all goes well, we aim to be fully operational by April next year,” said an official from the Ministry of Industry.

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