TOKYO: The Japanese government Friday released a draft report calling for imposing fines on companies that violate rules under the carbon dioxide emission trading system to be fully introduced in fiscal 2026.

The report was presented at a meeting with experts to examine legal issues linked to the CO2 emissions trading system for decarbonization.

The report said that companies that fail to achieve emissions reductions and do not buy excess emissions quotas from other companies should be subject to fines.

Based on the report, the government aims to write a bill to revise relevant legislation for submission to next year’s ordinary parliamentary session.

The trading system allocates CO2 emissions quotas to companies and requires those that emit CO2 exceeding their limits to buy emission quotas through the system.

To make the system fair, the report called for a third-party organization to certify and examine whether the emissions calculated by companies are appropriate.

It also pointed to the importance of listening to opinions of industry people and experts regarding the establishment of emission quota allocation standards.

JIJI Press