No.3690
Carbon Farming Market in Japan: Key Research Finding 2024
Domestic Carbon Farming Market Projected to Expand to 9,221 Million Yen by FY2030
Yano Research Institute (the President, Takashi Mizukoshi) has conducted a survey on the initiatives of carbon faming & regenerative agriculture, as well as the trends regarding J-credit, and found out the market player trends and future directions. This press release denotes the forecast on the domestic carbon farming market size.

Market Overview
According to the Japan Meteorological Agency, Japan's average annual temperature has increased by 1.35°C over the past century. The summer of 2024 (June to August) saw the hottest temperatures on record in western Japan, Okinawa, and Amami since statistics began in 1946, with eastern Japan also experiencing its highest temperatures on record. The world is enduring increasingly intense heatwaves. The United Nations Environment Programme's "Emissions Gap Report 2024" warns that, under current policies, the global average temperature could rise by as much as 3.1°C by the end of the century.
Agriculture, forestry, and fisheries are susceptible to climate change. Heatwaves have degraded farm produce, and heavy rainfalls have turned into catastrophe in areas that tend to be affected severely by natural disasters.
In the FY2022, the total emissions of greenhouse gases (GHG) in Japan amounted to 1,135 million tons of CO2 equivalent. According to MAFF, the total emissions by agriculture, forestry, and fisheries accounted for 47.9 million tons, representing 4.2% of the total emissions. The majority of the farming-related methane gas emitted is associated with paddy fields and animal husbandry (gastrointestinal fermentation and excreta). Against this background, enriching soil and storing more carbon dioxide in soil through carbon farming and regenerative agriculture is garnering attention.
Noteworthy Topics
“Rice Crop Consortium” Facilitates Participation of Carbon Farmers in J-Credit System
In March 2023, the J-Credit System Steering Committee approved the "Extension of Medium Drying Period in Paddy Cultivation" as a new methodology. While there is growing anticipation for farming carbon credits, several challenges remain. To register for J-Credit, carbon farmers must not only demonstrate the ability to reduce or absorb at least 100 tons of carbon dioxide, but also pay several million yen for registration and credit issuance. Additionally, the application process is complex and cumbersome, making it too difficult for producers to navigate on their own.
Under these circumstances, the “Rice Crop Consortium” was launched in April 2023, which invites farmers that wish to participate in J-Credit scheme into a group and apply for J-Credit paddy field credits collectively. This makes it easier for carbon farmers to meet the prerequisite. As of May 2024, there are more than 300 entities participating in the consortium, including farmers, agricultural corporations, and business corporations such as major agricultural manufacturers, major trading companies, regional banks, major consulting firms, major tech companies, agricultural ventures, JA agricultural cooperatives, and IT firms providing farm management tools.
Future Outlook
The size of the domestic carbon farming market (based on the amount paid to producers/production organizations by offset providers) in FY2024 is expected to be 396 million yen.
While paddy field credits (from the extension of mid-season drainage in rice paddies) are expected to drive the market through FY2025, biochar credits (from the addition of biochar to cropland soil) are projected to see significant growth starting in FY2026. As regenerative agriculture continues to expand in response to growing demand for GHG emissions reductions, the carbon farming market is forecast to exceed five billion yen by FY2029, reaching 9,221 million yen by FY2030.
Research Outline
2.Research Object: Companies and groups involved in J-credit scheme, Japan’s Cooperatives (JA), universities, competent authorities, and industry associations
3.Research Methogology: Face-to-face interviews by our expert researchers (including online interviews) and survey via telephone
About the Cabon Farming Market
Carbon farming is an agricultural management system that embraces environmental restoration practices to address climate change. By capturing and storing CO2 in plant material or soil organic matter, carbon farming aims to reduce the concentration of CO2 in the atmosphere.
In this survey, the "carbon farming market" targets the five methodologies* defined in the J-Credit scheme. These include: 1) biochar addition to cropland soil (biochar credits), 2) extension of mid-season drainage in rice paddies (paddy field credits), 3) conversion of disposal management system for manure (animal husbandry credits), 4) feeding amino acid balance improved feeds to dairy cattle, beef cattle, pigs, and broiler chickens (animal husbandry credits), and 5) feeding bypass proteins to beef cattle (animal husbandry credits)”. The market size was calculated based on the payments made to producers or producer groups by carbon offset providers (carbon credit sellers). This calculation does not include credits bought or sold through bids, or those traded without the involvement of carbon offset providers.
*About "Five Methodologies"
Biochar is a charcoal-like substance produced by heating organic materials like woody biomass (including wood, bamboo, and paddy straw) and animal biomass (such as manure), at high temperatures with limited oxygen. The use of biochar for cropland soil enables sequestration of CO2 for a long time, and thus biochar carbon is accredited as J-credits.
Paddy field credit in the J-credit scheme is certified for the amount of methane reduced by controlling microbial activity of methanogens through extension of mid-season drainage in rice paddies for a week longer than conventional rice farming period.
Animal husbandry credits are accredited by J-credit for the reduction of methane gas in animal husbandry by conversion of manure disposal management system and feeding amino acid balance-improved feeds.
<Products and Services in the Market>
1) Biochar addition to cropland soil, 2) extension of mid-season drainage in paddy fields, 3) conversion of manure disposal management system, 4) feeding amino acid balance- improved feeds to dairy cattle, beef cattle, pigs, and broiler chickens, 5) feeding bypass proteins to beef cattle
Published Report
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