Japan has three systems a buyer may meet: a national emissions trading scheme for large emitters, a domestic crediting scheme (J-Credits) and a bilateral mechanism with partner countries (the JCM). Anyone can also buy voluntary credits from international providers. This guide explains each, plus the tax and claims rules. For other countries, see our countries hub.
Japan’s compliance market (GX-ETS)
Emissions trading began on a trial basis in the GX League from FY2023 and started full-scale operation in FY2026Source 6. The revised GX Promotion Act, enacted in May 2025, makes participation mandatory from FY2026 for businesses that emit carbon dioxide above a certain scaleSource 6.
Scrolls sideways to show every column.
| Item | Detail |
|---|---|
| Who is covered | Corporations with direct CO₂ emissions over 100,000 tonnes (3-year average, FY2023–FY2025) |
| Expected scale | About 300–400 companies, close to 60% of Japan’s emissions |
| Allocation | Allowances allocated without charge at the start |
| Paid auctions | For power generation companies from FY2033 |
| GX surcharge | A levy on fossil fuel importers from FY2028 |
As of Oct 2026
The coverage, scale and timeline figures come from METI’s emissions trading subcommittee reportSource 6. The bill approved by Cabinet in February 2025 allows the government to allocate allowances without compensationSource 5. The surcharge on importers of fossil fuels such as oil and coal will start low and increase graduallySource 7.
Japan’s NDC, submitted in February 2025, aims to cut greenhouse gas emissions by 60% in FY2035 and 73% in FY2040 from FY2013 levelsSource 4.
J-Credits: Japan’s own carbon credits
The J-Credit Scheme certifies greenhouse gas reductions and removals within Japan, for example from energy-saving equipment and forest managementSource 8. The Ministry of the Environment, METI and the Ministry of Agriculture, Forestry and Fisheries run it as a baseline-and-credit schemeSource 22, and it keeps a registry for the creditsSource 9.
Scheme named here
J-Credit Scheme
Logos identify the organisations named; no endorsement is implied.
You can buy J-Credits in three main ways:
- Through a J-Credit Provider. These intermediaries sell credits at a price agreed bilaterallySource 10. You don’t need your own registry account: a provider can cancel credits on your behalfSource 11.
- From the official list of credits for sale, published by the schemeSource 10.
- On the Tokyo Stock Exchange. The carbon credit market opened on 11 October 2023Source 16. It trades J-Credits and, since 7 November 2025, GX credits, by call auction in units of 1 t-CO₂Source 17.
The scheme secretariat no longer runs tender sales, though METI still sells J-Credits it holdsSource 12.
The TSE market is not open to individuals
To register on the TSE carbon credit market you must be a corporation, a government or local government, or a voluntary organisation, with a Japan-based account, and participants may not act as agents for other people’s ordersSource 18. Individuals can use a J-Credit Provider instead.
Buying voluntary credits in Japan
Besides J-Credits, you can buy credits from international projects through online retailers, marketplaces and brokers. Compare them on registry serials and certificates in where to buy. Whichever route you choose, ask which registry holds the credits and check that they are cancelled or retired in your name.
Reduce first, then offset
The Ministry of the Environment describes carbon offsetting as first making every effort to reduce emissions, then compensating for the emissions that cannot be avoidedSource 22. Our guide for individuals shows how to size a purchase. Not sure how compliance and voluntary credits differ? Read voluntary vs compliance markets.
Claims and tax notes
Consumption tax and corporate tax
The National Tax Agency has ruled that a paid transfer of offset credits (J-VER) or JCM credits between domestic corporations is subject to consumption tax, and that the buyer’s purchase qualifies for input tax creditSource 14Source 15. The same treatment for J-Credits was confirmed with the National Tax Agency in February 2014Source 13.
For corporate tax, the value of credits moved to a cancellation account can be treated as a donation to the national governmentSource 14. We found no guidance aimed at individuals. Get professional advice.
What you can say about offsets
The Consumer Affairs Agency says that if an environmental label leads consumers to believe a product or service is far more environmentally friendly than it is, that can be a misleading representation under the Act against Unjustifiable Premiums and Misleading RepresentationsSource 21. The Ministry of the Environment publishes guidelines on carbon offsetting in JapanSource 22.
Whatever label you use, the evidence that matters is the same: which credits were cancelled or retired, how many, and where the registry record is. Ask for it before you rely on a claim, and give it when you make one.
How to check quality before you buy
Each Verra credit represents one tonne of CO₂e reduced or removedSource 1, and registries such as Gold Standard’s track every credit from issuance to retirementSource 2. That makes three checks possible before you pay:
- Is it in a public registry? Ask for the registry and serial numbers, and check the credits are retired in your name.
- Is the method credible? The ICVCM’s Core Carbon Principles set a quality threshold, and credits that meet it can carry the CCP labelSource 3.
- Is the seller clear? A good seller says what you are buying, what it charges and how and in whose name it retires credits.
Our guide to how to verify carbon credits shows the steps, and carbon credit scams lists the warning signs.
Article 6 deals: the Joint Crediting Mechanism
Under the JCM, Japan and a partner country share the resulting reductions and removals in proportion to each country’s contribution, and Japan describes the mechanism as consistent with Article 6 of the Paris AgreementSource 20. As of April 2026, 32 countries had signed a memorandum of cooperationSource 19.
- Mongolia was the first partner, on 8 January 2013Source 19.
- India signed on 7 August 2025, as the 31st partnerSource 20. See our India guide.
- The United Arab Emirates signed on 16 April 2023Source 19. See our UAE guide.
- Oman signed on 9 April 2026Source 19.
Singapore uses a different model, with Implementation Agreements that let its carbon tax payers use credits; see our Singapore guide.
How to buy, step by step
Step 1: Work out what to cover
Estimate your footprint and cut what you can first.
Step 2: Choose a route
Buy J-Credits through a J-Credit Provider, or international credits from a provider.
Step 3: Pick a provider or project
Compare providers on registry serials, certificates and fees.
Step 4: Check the registry record
Confirm the credits are cancelled or retired in your name.