Carbon emission

A new carbon emissions tax in Japan will cost utilities around JPY80bn ($1.02bn) per year from 2016, a government-backed think-tank has said.

The country plans to gradually phase in the tax on coal, natural gas and oil over the next five years, the Ministry of Finance said.

The latest move would hit the balance sheets of businesses from power plants and refineries to gas stations and factories.

About a third of the 2016 revenue, or JPY80bn, is anticipated to come from Japanese power firms, including Tokyo Electric Power, reports Reuters.

The tax will be added to existing levies already imposed on fossil fuels, and expected to generate nearly JPY260bn ($3.31bn) in additional revenue per year from April 2016.

The tax, which the government may use to fund green initiatives, will be introduced in three phases with the first increase adding between 12-31% on existing levies. The remainder tax will be paid by other primary users of fossil fuels.

Costs of running power plants in Japan is already high due to the closure of nuclear plants in the country after the Fukushima disaster. Japan plans to phase out nuclear power by 2040.

Image: The new carbon emission tax will be added to existing levies already imposed on fossil fuels. Photo: courtesy of UweHermann.