Observation 1: Asian carbon markets are entering a major transformation phase

Japan is moving ahead with its national emissions trading system, the GX-ETS, while Singapore continues to evolve its carbon tax and international crediting infrastructure. Together, these two systems are creating the price signals, compliance rules, and long-term demand trajectories that will shape carbon removal pathways across Asia for the next decade.

Observation 2: Japan’s J-Credit supply is far too small for future GX-ETS demand

Japan’s domestic crediting system, the J-Credit Scheme, cannot meet the scale of demand expected as the GX-ETS begins mandatory compliance in FY2026. A Tokyo Stock Exchange survey suggests that Phase 2 of the GX-ETS could require up to 3 million tons of credits annually, far exceeding current domestic supply. This gap opens the door for high-quality international removals.

Observation 3: Compliance market price ceilings are becoming clearer

While Japan’s government will continue calibrating the GX-ETS ceiling price into the mid-2030s, the prevailing expectation is that it will not exceed roughly USD $150 per ton. Singapore sends a similar signal: with its carbon tax scheduled to rise to SGD $50–$80 per ton by 2030—and with future adjustments expected to remain within this range—it effectively establishes a comparable upper-bound benchmark for long-term compliance credit prices in the region.

This creates a crucial signal for CDR developers: durable removals must ultimately operate below this price point.

Carba’s permanent biochar burial, in low-oxygen, stable environments, provides 1,000+ year permanence and is on a trajectory to meet these compliance-aligned price expectations.

Observation 4: Japanese companies are broadening beyond DAC to diversified CDR portfolios

Japanese multinationals have been some of the earliest and strongest supporters of direct air capture, purchasing offtakes and investing directly in DAC developers and projects.

But as the industry matures, companies are increasingly recognizing the value of diverse CDR pathways that offer:

• Robust permanence

• Measurable co-benefits

• Geographic suitability across Asia

At Decarbon Tokyo, every major CDR pathway had representation, but the biochar / BICRS track drew the most speakers and participants, reflecting rapid project growth across the region.

But much work remains

Article 6 progress is real, but execution remains challenging.

Japan and Singapore have signed multiple bilateral Article 6 agreements to count reductions and removals from foreign projects in their compliance systems. Yet the real-world implementation is still administratively complex, requiring alignment across host-country authorities, corresponding adjustments, and evolving MRV requirements.

Asian compliance markets will drive demand soon, so buyers are urging peers to act now in the VCM. Even as compliance markets develop, the voluntary carbon market still drives the majority of CDR purchasing today. At the conference, companies like Mitsubishi, NYK Line, Mitsui, and MOL Group delivered a consistent message:

Buy now—even small volumes matter.

Every early purchase builds trust, improves market liquidity, and accelerates scale. These early commitments are essential if Japan and Singapore are to do their part in meeting IPCC guidance, which shows the world will need around 10 gigatonnes of carbon removal per year by mid-century to remain aligned with 1.5°C pathways.

Asia is quickly becoming one of the most important regions for long-term carbon removal deployment. The momentum we saw in Tokyo reinforces our conviction that global, diversified CDR infrastructure is not just viable—it’s essential. Carba is proud to be contributing to this next chapter.