Japanese trading house Mitsubishi [8058:JP] will start selling renewable electricity certificates (RECs) for buyers to offset the emissions from their power consumption, with Japanese electronic components producer Murata Manufacturing [6981:JP] as the first buyer, as reported by Nikkei Asia on June 24. To generate and profit from RECs, Mitsubishi will build a solar power plant and deliver renewable power to the utility market. Mitsubishi plans to invest over JPY10bn (USD74m) to develop 70 megawatts (MW) of solar power plants in Japan by the end of March 2026.

RECs allow enterprises to offset their carbon footprint without directly using renewable energy. As one of the major suppliers of Apple [APPL:US], Murata is required to align with Apple’s commitment to 100% carbon neutrality within its supply chain by 2030. Moreover, Murata will need to shift to 100% renewable energy or risk losing Apple’s orders. Therefore, Murata will first buy 100m kilowatt-hours (kWh) worth of RECs from Mitsubishi, then gradually increase the order to 300m kWh, sufficient to offset 10% of Murata’s annual power use. In May 2022, the Japan Exchange Group (JPX) [8697:JP] announced a plan to establish the country’s first market for trading carbon dioxide (CO₂) emissions inside the Tokyo Stock Exchange (TSE) [TPX:IND]. Reportedly, the Japanese government will also certify renewable energy and forest management projects and allow the trading of these credits on the TSE market.

Sources:

https://asia.nikkei.com/Spotlight/Environment/Climate-Change/Mitsubishi-Corp.-to-sell-renewable-energy-certificate-to-Murata

https://asia.nikkei.com/Spotlight/Environment/Climate-Change/Japan-to-launch-first-exchange-for-carbon-emissions-trading

https://www.apple.com/newsroom/2020/07/apple-commits-to-be-100-percent-carbon-neutral-for-its-supply-chain-and-products-by-2030/