Japan’s own emissions trading

It is well known that our country’s own emissions trading system sells some of the credits certified by the government to companies through biannual tenders. The latest tenders status in August (enforced in April) were published, showing an average of 2,536 yen per tonne of renewable energy credits, an increase of 34% compared to the June 2020 tender. This increase seems to have been driven by the Solar Power Generation Facility subsidy project for individuals. However, since credits are initially a bilateral transaction between the seller and the buyer, the domestic credit generation business would be limited. Even if the price per ton rises, emissions trading can not be expected to supply to the market.

On the other hand, the EU Emissions Trading (EU-ETS) price reached 50 euros/t-CO2 in May 2021, over 6,500 JPY (1 euro = 130 yen). I would say that the background of this increase is that the EU set their Greenhouse Gas Emission Reduction Target to 55% in 2030 at the summit meeting in December 2020.

The practice of decarbonisation, and The Emissions Trading on the international stage

Thus, the current price difference between Japan’s own emissions trading and that of the EU, which can be on the international stage, shows that Japan’s emissions trading price is about 1/3 of that of the EU. This figure alone cannot refer to the future of decarbonisation that Japan has set out. Still, if companies take the initiative to promote decarbonisation, there is no mobility to encourage it. Therefore, We can state that the mechanism to make decarbonisation profitable doesn’t exist there yet.

In light of this, we need to find a way to move quickly to the international stage to make a stronger push for decarbonisation. I would say that It is the proper technology that will guarantee true decarbonisation.