Japan utilities may join trial CO2 scheme

TOKYO Oct 24 (Reuters) - Each Japanese utility will consider participating in the planned domestic trial carbon dioxide (CO2) trading scheme, keeping in mind the industry's voluntary goals under the Kyoto Protocol, the chairman of an industry association said on Friday.

Participation of the utilities is considered key in the government-led new voluntary framework to regulate CO2 emissions, as the utilities and steel firms, Japan's two top emitters, have resisted mandatory targets as well as emissions trading similar to that already in place in the European Union.

Each utility firm will consider joining the trial scheme separately, because the industry's wish to participate in the trial scheme on a sectoral basis would not be allowed, Shosuke Mori, chairman of the Federation of Electric Power Companies of Japan, told reporters.

"Kansai Electric will consider participation positively as part of an issue-finding experiment," said Mori, who also serves as president of Osaka-based Kansai Electric Power Co, (9503.T) Japan's second-biggest utility. Other utilities are expected to have a keen interest in the scheme, which was launched earlier this week and is set to be up and running by next year.

Japan's major polluters, such as utilities, have already agreed on voluntary targets based on emissions per production unit.

But the utility industry is facing an uphill battle with Japan's biggest nuclear plant operated, by top utility Tokyo Electric Power Co (TEPCO), (9501.T) shut indefinitely due to a July 2007 earthquake.

Japan is obliged to cut greenhouse gas emissions by 6 percent in 2008-2012 from 1990 levels under the U.N.'s Kyoto Protocol climate pact. But as of 2006, Japan's emissions were 6 percent above 1990 levels.

Besides Kansai Electric, TEPCO has already expressed an interest in the trial scheme, and Tohoku Electric Power Co's (9506.T) President Hiroaki Takahashi told reporters it was considering about the matter positively.

The government started accepting applications on Tuesday for the trial scheme and the closing date is Dec. 12, 2008, for companies to set a voluntary emission cut target for the year to March 2009. No pricing details have been announced. [ID:nSP180894] (Reporting by Osamu Tsukimori; Editing by Michael Watson)