Tokyo Stock Exchange Inc. on Wednesday opened a platform to trade carbon credits in an effort to accelerate decarbonization in the private sector.
The exchange allows companies to buy and sell "J-Credit," a credit certified by the Japanese government and given to organizations that have reduced carbon emissions through renewable energy use, tree-planting, and other measures.
A company struggling to meet its emissions target can purchase credits to offset the amount by which it has exceeded it, while a firm that has reduced greenhouse gasses by more than it needs can make money by selling extra credits.
More than 180 organizations, including oil firms and regional banks, have decided to participate in the platform, and the TSE expects credits worth 500,000 tons of CO2 to be traded annually.
So far, the credits have largely been traded on a negotiation basis in Japan. TSE expects the open market system will increase transparency in trading.
The move comes as efforts to tap the exchange system to reduce carbon emissions gain momentum in the private sector.
SBI Holdings Inc. and Asuene Inc. have set up a new company to broker carbon credit trading, while domestic venture Shibuya Blend Green Energy has also launched a similar service.
