TOKYO (Reuters) – Japanese government on Wednesday proposed to introduce a carbon levy on fossil fuel importers in 2028-29 fiscal year to encourage the companies to curb carbon dioxide (CO2) emissions.
The plan, which is part of a new carbon pricing scheme, was suggested by the industry ministry to an expert panel to discuss about clean energy.
The carbon pricing scheme, which requires companies to bear the burden of CO2 emissions, will come in two formats – a levy on companies and an emissions trading between companies.
The carbon levy will be introduced from around the fiscal year which starts in April 2028 on fossil fuel importers such as refiners, trading houses and electric utilities, while the emissions trading market will start full-scale operation from around the 2026/27 fiscal year, following a trial in 2023/24.
Emission credits to be allocated by the government to electric power companies will be charged from around the 2033/34 fiscal year to further encourage them to move away from fossil fuels.
The government estimates that the public and private sectors will need to invest more than 150 trillion yen ($1.1 trillion) in the decarbonisation sector over the next 10 years.
Out of the total, 20 trillion yen will be provided by the government.
Details of the scheme, including the financial support framework, will be discussed with the finance ministry, the industry ministry said.
($1 = 134.8000 yen)
(Reporting by Miho Uranaka, Writing by Yuka Obayashi; Editing by Arun Koyyur)
