Japan Emission Trading System Begins

Tokyo, April 2 (Jiji Press)--Japan has begun an emission trading system in which companies that emit large amounts of carbon dioxide must participate.

Under the system, launched at the start of fiscal 2026 on Wednesday, such companies are allocated emission allowances for free by the government and are allowed to sell their surpluses if they emit less than their quotas. Actual trading is expected to begin next year.

The system is aimed at curbing CO2 emissions to within allocated limits to achieve a decarbonized society.

Companies that have emitted an average of more than 100,000 tons of CO2 over the past three years are obliged to take part in the system. Some 300 to 400 companies, such as steelmakers, power suppliers and automakers, are expected to participate, accounting for nearly 60 pct of all domestic greenhouse gas emissions.

Companies are allocated emission allowances based on their past emission amounts, and those that emit CO2 in excess of their quotas must buy surplus allowances from other participants to make up for their shortfalls in allowances.

[Copyright The Jiji Press, Ltd.]