Japan / National law
Japan GX-ETS
GX Promotion Act (Act No. 4 of 2023, amended 2025) — GX Emissions Trading Scheme, mandatory phase
In force2026-04-01NewModified
Topic : Climate · Level : National
Today
Mandatory phase 2 started 1 Apr 2026 (FY2026-2032) for emitters >=100,000 tCO2; baselines and rules being finalised.
Summary
Japan's emissions trading scheme became mandatory on 1 April 2026 for companies emitting at least 100,000 tCO2 a year, about 300-400 firms. Allowances are mostly free, based on benchmarks, with a price floor and ceiling.
Who is concerned
- Turnover
- non précisé
- Employees
- non précisé
- Listed company
- cotées et non cotées
- Sectors
- Power
- Steel, chemicals, cement
- Paper, oil refining
- Other large emitters
- Triggering activities
- Avg direct CO2 >=100,000 t/yr (3 yrs)
- Operating in Japan
- Extraterritorial reach
- No
non précisé
- Examples
- Japanese steelmaker
- Chemical plant of a foreign group in Japan
What the law requires
- Report verified direct CO2 emissions each year
- Surrender allowances equal to verified emissions
- Use J-Credits or JCM credits for up to 10% of the obligation if needed
Penalties
Shortfall: pay missing allowances x upper reference price x 1.1.
SUPPLIER INTELLIGENCE
What this changes for a supplier in China
Indirect: Japanese buyers under carbon cost pressure may ask Chinese suppliers for lower-carbon materials and product carbon data.
Expected evidence
- Product carbon footprint
- Energy mix of supplying sites
- Low-carbon material certificates
Tiers : Tier 1
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