Global Environmental Value Trading Market to Expand to ¥5.8 Trillion in 2025
November 17, 2025
Japan's Carbon Credit Market Forecast (2022-2050)
Data and Trend Analysis
The chart illustrates the size and development forecast of Japan's carbon credit market from 2022 to 2050, with values in billions of Yen.
1. Market Composition:
The market is divided into three main components:
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Carbon Credits: Traditional carbon offset credits.
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Environmental Value Certificates: Certificates for renewable energy or other environmental values.
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ETS & Others: Emissions Trading Systems and other related mechanisms.
2. Trends and Forecasts:
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Boom Phase (2022-2026): The market is projected to experience robust growth, skyrocketing from 1,488 billion Yen (2022) to ~9,000 billion Yen (2026). This is the period of rapid market formation and expansion.
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2022: 1,488 bn JPY
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2023: 3,847 bn JPY
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2024: 5,483 bn JPY
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2025 (Projection): 5,881 bn JPY
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2026 (Forecast): ~9,000 bn JPY
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Adjustment and Stabilization Phase (Post-2026): After peaking in 2026, the market size is forecasted to gradually decline and stabilize.
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2030 (Forecast): ~7,500 bn JPY
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2040 (Forecast): ~6,000 bn JPY
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2050 (Forecast): ~4,500 bn JPY
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3. Key Insights:
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The initial explosive growth indicates Japan's strong efforts in building and activating the carbon market, driven by its carbon neutrality goals.
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The market contraction after 2026 could reflect several expectations:
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Lower Abatement Costs: Green technologies become cheaper, reducing the need for expensive carbon credits.
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Independent Emission Reductions: Companies invest in and reduce emissions at the source, decreasing reliance on the carbon market.
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Market Mechanism Efficiency: The market operates efficiently, achieving environmental goals at a lower overall cost.
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This long-term trend aligns with the pathway towards Japan's 2050 Carbon Neutrality goal, where emission reductions become more mainstream and less costly.
Note: 2025 data is a projection; 2026 and beyond are forecasts.
On November 13, Fuji Keizai (Chuo Ward, Tokyo) released the results of its survey on the global environmental value trading market, which includes carbon credits, environmental value certificates, and emissions trading systems (ETS). The total market is projected to reach ¥5.881 trillion in 2025, consisting of:
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Carbon credits: ¥59.4 billion
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Environmental value certificates: ¥338.6 billion
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ETS and other mechanisms: ¥5.881 trillion
Market Outlook Toward 2030 and 2050
Demand for environmental value trading is currently high as a transitional measure toward carbon neutrality and is expected to peak around 2030. Over the long term, however, market demand is expected to gradually decline as renewable energy becomes more widespread and ETS emissions caps tighten.
By 2050, the market is expected to shrink to ¥3.8474 trillion, down 42.9% from 2024, with the breakdown as follows:
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Carbon credits: ¥1.4881 trillion
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Environmental value certificates: ¥143.7 billion
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ETS and other schemes: ¥2.2156 trillion
Growing Carbon Credit Market
Carbon credit trading continues to expand as companies pursue decarbonisation goals. In Japan, ocean-based and agricultural carbon absorption systems are expected to become more common, while internationally, technological removal solutions such as CCS (carbon capture and storage) and DAC (direct air capture) are projected to grow. The market will further expand as Japan rolls out its GX-ETS system.
For companies targeting net-zero emissions by around 2040, carbon credits may remain the only viable option, leading to increased demand from the 2030s and pushing transaction prices higher.
Environmental Value Certificates
Environmental value certificates are expected to retain significance as renewable energy continues to expand. In Japan, Non-Fossil Certificates (FIT) form the core of the system, while in many overseas markets, certificates tied to renewable electricity—particularly wind—play a leading role.
In the long term, as the share of non-fossil electricity grows, demand for environmental value certificates is expected to decrease.
Emissions Trading Systems (ETS)
ETS places a cap on total emissions, allocates allowances to participating companies and institutions, and allows trading of allowances when actual emissions exceed allocations.
The EU-ETS currently dominates global market scale, but more countries are expected to adopt ETS programs in the coming years. In Japan, full-scale trading under the GX-ETS (administered by METI) is scheduled to begin around autumn 2027, with the market expected to expand until around 2030. After that, market size may decline as renewable deployment progresses and emissions caps tighten.
J-Credit Market
The survey also highlights J-Credit as a noteworthy market:
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Expected value in 2025: ¥11.2 billion
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Expected value in 2050: ¥39.9 billion
Transaction prices have been rising as companies strengthen carbon reduction efforts, particularly in forest conservation projects. Early buying activity has increased in anticipation of GX-ETS implementation, with demand exceeding supply and prices remaining high. Some companies have paused purchases to observe price trends, but trading volume is expected to stabilise temporarily.
From 2026 onward, as GX-ETS becomes fully operational, demand for J-Credit is projected to rise again.
