Tokyo Stock Exchange to start Carbon Credit Trading on Oct. 11

Tokyo Stock Exchange

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The Tokyo Stock Exchange (TSE) will start trading carbon credits on October 11, 2023. The exchange began accepting application for registration from July, and the number of “Carbon Credit Market Participants” at the day of the opening date, is 188 participants. This is Japan’s first exchange-based carbon market as the world’s fifth-largest carbon dioxide (CO2) emitter moves to tackle climate change.

The government’s plan is aimed at speeding up decarbonisation to tackle climate change. Japan lags other major economies that have already implemented similar policies.

Via the new market, registered members can trade the existing carbon credit, known as J-Credit, on the TSE, a unit of Japan Exchange Group Inc 

Under the J-Credit system, the government certifies as “credit” the amount of greenhouse gas emissions, such as CO2, reduced or removed through efforts to introduce energy-saving devices and manage forests

The credit has been traded individually between companies and other organisations, but it was difficult for them to find buyers or sellers on their own.

Related Article: High-Quality, Transparency & Control: Investing in Carbon Credits Before they’ve Entered the Market

The new TSE market will make it easier for companies to buy and sell credits and provide transparency in carbon pricing, a TSE official said.

Mr. Moriyuki Iwanaga, President and CEO of Tokyo Stock Exchange, Inc. said:

“We are pleased to announce that we will open the carbon credit market on October 11 2023 as an official market of the JPX Group, from the perspective of providing a place to trade carbon credits in Japan and to publicly announce the price of carbon credits, taking advantage of the knowledge gained from the “Carbon Credit Market Technical Demonstration Project” implemented in FY2022 and the market operation experience.

In addition, the number of initial registration Participants reached 188, which was higher than the 183 Demonstration Participants in the demonstration project last fiscal year. We receives registrasions from a wide range of industries, including business corporations, financial institutions, and local governments.

The opening of the carbon credit market is intended to enable the JPX Group to play a role in supporting both the reduction of greenhouse gas emissions and sustainable economic development in Japan, and we are committed to work together with all stakeholders to make the carbon credit market more active, taking into account the government’s policy on emissions trading schemes.”