ESG

Tokyo Stock Exchange (TSE) has begun accepting applications from companies to participate in a carbon dioxide (CO2) emissions trading demonstration experiment that will begin in September (announced on June 23). Trading will take place on the newly opened "carbon credit market." Emissions are bought and sold in one-ton units, and the Tokyo Stock Exchange will act as an intermediary for fund settlement and other transactions. No conditions are set for participating companies.

The "J-Credits," in which the government certifies the reduction of CO2 emissions through the use of renewable energy and forest development, are bought and sold. Orders will be accepted in the morning and afternoon and executed at 11:30 a.m. and 3:00 p.m. with price priority. The only order method is limit order. The market will be open until January 2023. It aims for full-scale operation in cooperation with the Ministry of Economy, Trade and Industry (METI), which commissioned the demonstration experiment.

The bidding results (April 11-18th) for J-credits held by the government show that, Credits derived from renewable energy averaged 3,278 yen per ton, while emissions derived from the installation of energy-saving equipment averaged 1,607 yen per ton. In market transactions, past bidding results are used as reference values.

The government has "The GX League" initiative consisting of companies committed to decarbonization. Participating companies will set emission reduction targets through 2030, and the government will certify as carbon credits the portion of emissions that exceed the targets. This credit will also be handled by the new market in the future, but the timing has not yet been determined.