Tokyo Stock Exchange begins trade in carbon credits (updated)
11/10/2023 05:28
(Adds details, quotes)
TOKYO, Oct 11 (Reuters) - Japan's Tokyo Stock Exchange
(TSE) started trading carbon credits on Wednesday, as the
world's fifth-largest carbon dioxide (CO2) emitter put in place
a key element of its strategy to tackle climate change.
Seeking to become carbon neutral by 2050, Japan is following
a similar path to other major economies. In April, it began the
phased introduction of a carbon pricing scheme to encourage
companies and cities to curb emissions.
"Japan's industry ministry has been cautious about
implementing emissions trading, but we have made a major turn to
utilize the carbon credit market to achieve our carbon neutral
goal," Yasutoshi Nishimura, the minister of economy, trade and
industry, said after the opening ceremony at the TSE.
"We will leverage the power of the new market to encourage
companies to cut emissions and invest in decarbonisation, with
an aim to achieve both carbon neutrality and economic growth,"
he told reporters.
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 8697.T .
Under the J-Credit system, the government certifies as a
"credit" the amount of greenhouse gas emissions, such as CO2,
reduced or removed through efforts to introduce renewable energy
or energy-saving equipment or managing forests.
The credit had been traded individually between companies
and other organisations, but it was difficult for them to find
buyers or sellers on their own.
The new TSE market will make it easier for companies to buy
and sell credits and provide transparency in carbon pricing,
according to a TSE official.
A total of 188 entities had registered as participants as of
Sept. 19, with the number still growing, according to the TSE.
Trading hours are 9:00-11:29 a.m. (0000-0229 GMT) and
12:30-2:59 p.m. (0330-0559 GMT). Transaction prices are set
twice a day and published after trading hours.
To boost trade liquidity, the TSE, with support from the
government, will introduce a market maker mechanism later this
year, it said.
Under the scheme, designated securities firms, banks or
trading companies have obligations to quote a certain volume of
simultaneous buy and sell orders within a certain price range
during a pre-determined time period, the TSE said, adding
details will be decided soon.
(Reporting by Yuka Obayashi
Editing by Katya Golubkova and Michael Perry & Simon
Cameron-Moore)
((Yuka.Obayashi@thomsonreuters.com; +813-4520-1265;))