Japan Enacts Revised Green Transformation Law

Jiji Press

15:02 JST, May 28, 2025

Tokyo, May 28 (Jiji Press)—Japan’s parliament enacted Wednesday amendments to a law to promote the government’s green transformation, or GX, policy to create an eco-friendly, sustainable society.

The amendment bill came into law as the House of Councillors, the upper chamber of the Diet, the country’s bicameral legislative body, passed it at a plenary session after the House of Representatives, the lower chamber, did so on May 15.

The revised law requires, among others, that companies emitting 100,000 tons of carbon dioxide a year take part in an emission trading system the government plans to introduce in fiscal 2026.

Under the system, 300 to 400 companies, such as steelmakers and power suppliers, are expected to be obliged to trade with each other emission credits to be provided for free by the government in a market the GX Acceleration Agency will set up. Upper and lower price limits will be set for the credits.

If a company discharges the greenhouse gas in excess of its emission rights and fails to acquire necessary credits in the market, it will be required to pay for the shortfall at a price 10 pct above the upper ceiling.