Japan to Introduce Carbon Pricing in 2028

In a move to expedite decarbonisation in the country, Japan is set to usher in carbon pricing from 2028, with the funds collected from carbon dioxide emitters used to support the country’s decarbonisation efforts, according to a Kyodo News report.

The proposed legislation will be presented by the Ministry of Economy, Trade and Industry at a meeting of industry experts and lawmakers today (December 14, 2023).

The regulation involves imposing a tariff on fossil-fuel importers such as oil wholesalers and power companies.

In addition to carbon pricing, the Japanese government also plans to follow other Asian jurisdictions and introduce emissions trading, in which companies buy and sell emission allowances on the market, from next year.

As part of its plans to fast-track decarbonisation the Japanese government estimates that public and private investment of over 150 trillion yen (US$1.1 trillion) will be required over the next 10 years to meet the country's target of net zero emissions by 2050.

It plans to raise about 20 trillion yen by issuing "green transformation" bonds to boost investment in decarbonisation projects, with the revenue from carbon pricing to be used to redeem the bonds.

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