The Tokyo Stock Exchange (TSE) will open its carbon credit market on October 11, a day on which it expects 188 currently registered entities to participate and will be open to receiving further participant applications.

Major Japanese business corporations, financial institutions and local governments, the TSE notes, are among the list of current registered participants.

The carbon credit market will be separate from the financial instruments markets operated by TSE where stocks and other financial products are listed, and trading on the carbon credit market will be conducted by auction.

Among the items eligible for trading will be J-Credits, an amount of greenhouse gas (GHG) emission reduction or removal that is certified based on rules for global warming countermeasures in Japan, which are administered by three of Japan’s government ministries – the Ministry of Economy, Trade and Industry, the Ministry of the Environment, and the Ministry of Agriculture, Forestry and Fisheries.

The opening of the market is intended to enable the Japan Exchange (JPX) Group to play a role in supporting the reduction of GHG emissions and sustainable economic development in Japan.

Japan has set its 2030 GHG emission reduction target at 46% from its 2013 levels, an ambitious target that is aligned with the country’s long-term goal of achieving net-zero by 2050.

Moriyuki Iwanaga, TSE president and chief executive, says: “We will open the carbon credit market as an official market of the JPX Group, from the perspective of providing a place to trade carbon credits in Japan and to publicly announce the price of carbon credits, taking advantage of the knowledge gained from the Carbon Credit Market Technical Demonstration Project implemented in 2022.”