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In brief

Several means exist to reduce greenhouse gas (GHG) emissions in order to achieve carbon neutrality by 2050, including development of new technologies, transitioning to renewable energy and voluntary energy conservation. In addition to these efforts, there is growing interest in offsetting residual emissions that are inevitably emitted despite reduction efforts through the use of carbon credits.

Although an increasing number of companies are interested in using carbon credits, the following issues have emerged:

(a) The treatment of carbon credits under domestic and overseas legal systems is unclear, and their use cases and importance are not fully understood; and

(b) Many types of carbon credits exist in Japan: J-Credits, Non-fossil Certificates, green electricity certificates, the Joint Crediting Mechanism (JCM) and voluntary carbon credits that are actively traded overseas. This makes it difficult for companies to determine which credits they should apply for and how to utilize them.

Against this backdrop, companies have been unable to fully estimate carbon credit demand, thus limiting their ability to increase the supply of carbon credits based on new carbon removal technologies and carbon sequestration using natural methods. In addition, carbon credits are mainly distributed via bilateral transactions, resulting in a lack of clarity on the status and pricing of these transactions.

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Kana Itabashi is a member of the Corporate/M&A practice group at the Firm's Tokyo office and a member of Global International Commercial & Trade practice group. Kana has over twenty years of legal experience and has broad experience advising multinational companies in various industries on international trade and cross border commercial issues, including trade remedies, export control, sanctions, import/export regulatory issues, as well as highly regulated commercial agreements.
Prior to joining the firm, she worked as a junior accountant at a major auditing firm, where she mainly performed accounting audits for listed companies, etc. From 2007 to 2009, she was seconded to the principal investment department of a major Japanese securities company, where she was involved in private equity investments, emissions trading and various other investment projects.


Mihoko Ida has 15 years of experience practicing law in Japan. She is a member of the Corporate / M&A Group, the Labor / Employment Group, and the Environment Group in the Firm’s Tokyo office. She focuses on mergers and acquisitions (especially corporate reorganization in IT and healthcare industries), labor / employment laws, environmental laws, and general commercial and corporate law. She was seconded to the Firm’s Chicago office between 2011 and 2012.


Ikumi Maruta is an associate in Baker McKenzie's Tokyo office.

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