Scroll Top

Japan initiates effort to boost liquidity in newly set up carbon market

Chevron Singapore Pte. Ltd., which markets the Caltex® retail brand in Singapore, has launched the Caltex Carbon Offset Programme, the first voluntary carbon offset programme for its Caltex service stations in Singapore.

Japan’s newly launched carbon credit market has initiated a trial scheme, under which it introduced several financial institutions and trading companies as “market makers” to test if they will boost liquidity of this nascent market, Japan Exchange Group or JPX said in a statement on Nov. 27.

This scheme, called the Trial Market Maker Scheme, will be implemented from Nov. 27, 2023, to Feb. 29, 2024. Two types of carbon credits are allowed to be traded by the appointed market makers, including J-Credits generated from energy saving projects and renewable electricity projects, JPX said.

The appointed market makers include Sumitomo Corporation, Daiwa Securities Co. Ltd., Marubeni Corporation, Mizuho Bank, Ltd., and MITSUI & CO., Ltd, according to JPX.

Since its start in October, Japan’s carbon credit market has been facing relatively low liquidity compared with other more mature APAC markets. For instance, on Nov. 24, the trade volume of China emission allowances (CEAs) totaled 1.45 million mtCO2e, and the trade volume of Korean Allowance Units (KAUs) totaled 122,607 mtCO2e, while the trade volume of J-credits totaled 2,500 mtCO2e, official exchange data showed.

This trial scheme is backed by the Ministry of Economy, Trade and Industry (METI), a government body that oversees the Japanese carbon market. This trial scheme followed the “Carbon Credit Market Trading Stimulation Project” organized by METI earlier, JPX said.