Policy status:Planned
Date Effective:2008
Policy Type:Voluntary Approaches>Negotiated Agreements (Public-private sector), Economic Instruments>Market-based instruments
Policy Target:Small and Medium sized Enterprises (SMEs), Energy Sector>Electricity Generation
Agency:Ministry of Environment (MOE)
Description:Japans Global Warming Prevention Headquarters (GWPH) is planning a pilot voluntary emissions trading scheme, for which applications were accepted between October and December 2008. The scheme will have businesses set voluntary reduction targets and trade surplus credits and debits among them. Companies will also outline the form of tradable credits to be used by businesses to meet their goals. Participation in the trial ETS will be voluntary, and incorporate existing targets under the Voluntary Emissions Trading Scheme (J-VETS) and the Keidanren Voluntary Action Plan. Targets will therefore limit either the total volume of energy-related CO2 emissions or the amount of CO2 per unit of production (intensity based target). The extensive monitoring, reporting and verification tools already in place under J-VETS will be used and enhanced for the new trial emissions trading scheme. Tradable units under the scheme will include excess units accumulated under the Keidanren Voluntary Action Plan; units tradable under the JVETS; credits from a domestic offset system. The latter would grant credits for emissions reductions through voluntarily undertaken projects to small and medium-sized enterprises not covered in the ETS, particularly in the manufacturing sector. Large companies under the emissions trading scheme will be able to purchase emission credits and use them for their own compliance, should they offer technical and financial assistance to help SMEs implement greenhouse gas (GHG) reduction projects. In addition to the manufacturing sector, the planned domestic offset system will be utilised to promote GHG emission reductions in agriculture and transport sectors though such means as switching from oil to biofuels in farming and from trucks to trains and ships in long-distance cargo transportation. Businesses are to set annual reduction targets for fiscal year 2008 to 2012, so as to begin achieving remissions reductions by fiscal 2010. Targets will be submitted to the government, which will assess them and then issue CO2 emission targets for the applicants based on these. Between 12 October and 12 December 2008, METI received 501 applications for participation. Of these 446 applied for setting voluntary targets, 50 for emissions trading, and five to become intermediaries for trading. Participants include nine electric power utilities, 41 chemical producers, 16 electric and electronic companies, 58 auto and auto parts manufacturers (that have applied as 2 industry lobbies) and 73 steel makers (applied as an iron and steel lobby). METI says the applicants represent 70% of the industrial sectors CO2 emissions. Emissions data in the year to March will be available around August, with trading expected to start in the fall of 2009.

Last modified: Thu, 26 Jul 2012 11:56:23 CEST