COMPANY ACTIVITY

Japan's CO2 tax to squeeze utilities

JAPAN'S new carbon tax will cost the country's fossil fuel utilities $1 billion a year by 2016.

Justin Niessner
Japan's CO2 tax to squeeze utilities

The tax, to be phased in over the next five years, will see the standard levy of 700 yen ($US8.95) per tonne of coal rise to 1370 yen ($17.51) per tonne by April 2016.

An additional $3.3 billion in annual revenue and funding for renewable energy initiatives will be raised by the tax, according to Reuters.

About a third of that revenue is expected from power companies, which have not yet made any formal move to counter the legislation.

For the first time in decades, Japan was overtaken last year by China as the world’s top coal importer.

Japan imported 193 million tons of coal in 2011 compared to 207Mt in 2010, largely from Australia.

Australia’s Department of Climate Change and Energy Efficiency projects that 33 countries and 18 sub-national jurisdictions will have enacted a carbon price by next year.

Despite consistently ranking as one of the world’s top coal consumers, Japan accounts for just 3.2% of the world’s total greenhouse gas emissions.

The Japanese government, meanwhile, is looking to ease its environmental assessments for coal-fired plants as early as next year.

Environmental regulations in Japan have proven to be an unachievably high hurdle for coal-fired plants planning to fill power production opportunities in the wake of post-Fukushima nuclear plant shutdowns.

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