Tokyo Stock Exchange to start carbon credit trading on October 11

The Tokyo Stock Exchange (TSE) announced on Friday that it will commence trading carbon credits on October 11. This move marks Japan’s first exchange-based carbon market as the country, which is the world’s fifth-largest emitter of carbon dioxide (CO2), takes steps to combat climate change. In April of this year, Japan began implementing a carbon pricing scheme in stages in order to encourage companies and cities to reduce emissions and work towards achieving its goal of carbon neutrality by 2050.

The purpose of the government’s plan is to expedite the decarbonization process in order to address climate change. Japan is currently behind other major economies that have already implemented similar policies. Through the new market, registered members will be able to trade existing carbon credits, referred to as J-Credit, on the TSE, which is a division of Japan Exchange Group Inc.

Under the J-Credit system, the government certifies the reduction or removal of greenhouse gas emissions, such as CO2, through the implementation of energy-saving devices and forest management efforts. Previously, these credits were traded individually between companies and organizations, making it challenging for them to find buyers or sellers independently.

The new TSE market will facilitate the buying and selling of credits for companies and enhance transparency in carbon pricing, according to a TSE official. The exchange began accepting registration applications in July, and as of September 19, a total of 188 entities had registered as participants.

Trading hours for the market will be from 9:00 am to 11:29 am and from 12:30 pm to 2:59 pm. Transaction prices will be determined twice daily and published after trading hours.