Japan's NYK Group signed an agreement with Mitsui & Co. Ltd. to purchase domestically issued carbon credits, called J-credits, on an annual basis for five years from 2025, NYK said in a statement.
NYK, one of the world's largest shipping lines by fleet size, considers signing the purchase agreement a crucial step in fulfilling its commitment to achieving net-zero emissions by 2050.
The J-credits to be supplied to NYK under the purchase agreement originate from two carbon dioxide removal (CDR) projects that reduce CO2 emissions through improved forest management in Hokkaido and Akita prefectures, according to the statement.
The two J-credit projects are jointly managed by Mitsui and its local partners in Hokkaido and Akita.
The J-credits are issued and supervised through a digital technology operated by Mitsui using aircraft and satellites to survey and monitor forest management and carbon dioxide absorption, NYK said, addressing the environmental integrity of these carbon credits.
NYK said it has also concluded comprehensive partnership agreements with Hokkaido and Akita prefectures, aiming to promote decarbonization projects, create employment and facilitate economic growth in these regions.
NYK did not disclose the procurement volume or price in the statement.
Addressing hard-to-abate emissions
The shipping industry is widely regarded as a hard-to-abate sector. Japan's shipping lines have been actively seeking nature-based CDRs to offset residual greenhouse gas emissions that cannot be reduced through internal decarbonization measures.
On Jan. 27, NYK released a position paper on CDR, stating that it would use carbon credits generated from CDR projects to address residual GHG emissions and meet its 2050 net-zero target.
Under its CDR implementation plan, NYK expects to start the trial phase for procurement and retirement of removal credits over 2025-26 and aims for the retirement of 100,000 mtCO2e of credits by 2030. It said its original plan was to retire 200,000 mtCO2e/year in 2030. However, due to the immaturity of CDR technology and the market, it lowered the goal to 100,000 mtCO2e/year, which remains subject to further change.
Another Japanese shipping conglomerate, Mitsui O.S.K. Lines (MOL), has also started investing in nature-based carbon assets. MOL recently entered into a joint venture with Marubeni in the nature-based CDR credit business.
Official exchange data showed that the benchmark price of forestation J-credits was Yen 6,500/mtCO2e ($42.80/mtCO2e) as of Feb. 7.
