Compare ETS

Japan combines several carbon pricing instruments to help meet net zero by 2050: an existing carbon tax, a voluntary emission trading system named “GX-ETS”, and a carbon levy to be introduced from 2028. Plans for this are outlined in the Basic Plan for the “Green Transformation (GX) Policy”, Japan’s ten-year decarbonization strategy.
The GX-ETS started as a voluntary baseline-and-credit system in 2023. Almost 570 companies, making up more than 50% of national emissions, participate. Under the GX-ETS, J-Credits (see below) are traded on the Tokyo Stock Exchange.

The GX-ETS is expected to transition to a mandatory ETS from 2026 after its first compliance deadline. Upper and lower price limits are planned to be introduced. From 2033, auctioning will be introduced for high-emitting entities in the power sector. Separately, a carbon levy will be introduced from 2028 on fossil fuel importers.
Japan is actively participating in international carbon markets. Its Joint Crediting Mechanism (JCM) is a bilateral scheme to incentivize decarbonizing technologies and mitigation actions in 28 partner countries.  JCM credits will also be eligible for use in the GX-ETS. Separately, over 100 countries and organizations have joined Japan’s global capacity-building initiative, the Article 6 Implementation Partnership.