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Japan · Emissions trading system

Japan GX Emissions Trading System (GX-ETS) — mandatory phase

Japan's GX-ETS moved from a voluntary phase (FY2023–FY2025) to a mandatory phase on 1 April 2026 under the amended GX Promotion Act. Companies with average annual direct CO2 emissions of 100,000 tonnes or more must surrender allowances corresponding to their actual emissions.

In forcesince 1 Apr 2026Verified 4 Oct 2026

The legal basis is the GX Promotion Act, amended by a law passed by the House of Councillors on 28 May 2025 and promulgated on 4 June 2025 (Act No. 52 of 2025). Participation is compulsory for companies whose average direct CO2 emissions over FY2023–2025 were at least 100,000 tonnes a year, about 300 to 400 entities; more than 700 entities took part in the voluntary phase.

The mandatory phase (Phase 2) runs from FY2026 to FY2032. Company baselines were expected to be determined and published in autumn 2026 or later. Price limits apply from FY2027, with an upper limit of JPY 4,300 and a lower limit of JPY 1,700 per tonne for that year.

Legal journey

From proposal to operation

  1. Milestone

    Voluntary GX-ETS phase begins (FY2023 to FY2025)

    icapcarbonaction.com
  2. Enacted

    GX Promotion Act promulgated (Act No. 32 of 2023)

    shugiin.go.jpOfficial
  3. Proposed

    Cabinet bill to make the GX-ETS mandatory submitted to the Diet

    shugiin.go.jpOfficial
  4. Enacted

    Diet passes GX Promotion Act amendment; promulgated 4 June 2025 as Act No. 52

    shugiin.go.jpOfficial
  5. In force

    Mandatory GX-ETS phase begins for emitters of 100,000 tCO2 or more

    icapcarbonaction.com

Each milestone links to the page it was checked against. Dates are given only to the precision the source supports.

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