The government adds utilization of hydrogen and ammonia to the J-credit and the new rules applied
The government adds utilization of hydrogen and ammonia to the J-credit application rules, covering fuel conversion . Renewal of equipment by business operators will be prompted by giving credits of CO2 emission reduction at the time of equipment operation. The methods to produce hydrogen and ammonia utilized cover not only those based on renewable energy, but also those based on non-renewable energy. Credits are also given to emission reduction through the introduction of FCVs (Fuel Cell Vehicles). New rules are applied within 2022.
It was presented at the J-credit System Steering Committee held by the Ministry of Economy, Trade and Industry (METI), Ministry of the Environment (MOE), Ministry of Agriculture, Forestry and Fisheries (MAFF), and Forestry Agency on December 9.
METI and other ministries had been considering the review of the J-credit system as hydrogen and ammonia were classified as decarbonized fuels by revisions of the Act on Sophisticated Methods of Energy Supply Structures in April 2022. At this meeting, application of the new rules was approved by the committee members.
“J-credits (renewable energy)” is given to utilization of hydrogen and ammonia produced by renewable energy and “J-credits (energy efficiency)” given to utilization of hydrogen and ammonia produced by by-product hydrogen or non-renewable energy. Clarification of fuel purity and mixed combustion rate is a requirement for giving the credits.
For the FCVs, it is required to specify an emission coefficient of hydrogen to be filled in them due to that emissions will be compared with conventional vehicles.
The J-credit system assumes that emissions have been reduced by the volume equivalent to the credits purchased. On the other hand, emissions equivalent to the credits sold are added to the seller’s emissions. The credits are mainly sold by medium- and small-sized businesses and local governments, and purchased by major enterprises which want to control emissions.
The METI explains the demonstration status of the “Carbon Credit Market”, reporting that J-credit trading started in September and total CO2 emission trading reached 34,249 tons by December 8th. An average trading unit price was 1,927 per ton.