～Aiming to Issue Carbon Credits under the Joint Crediting Mechanism (JCM)～
Osaka Gas Co., Ltd. (President: Masataka Fujiwara; “Osaka Gas”) announced today its investment in a project to reduce methane emissions from rice paddies in the province of Ilocos Norte, Philippines. The project is led by Green Carbon Inc. (CEO: Jun Okita; “Green Carbon”) and aims to apply the Joint Crediting Mechanism (JCM).
■The JCM in Japan and Initiatives in the Agricultural Sector
The JCM is a system in which Japan and partner countries collaborate to reduce greenhouse gas (GHG) emissions, with the results shared between both nations. In February of this year, the Japanese government made a cabinet decision to secure approximately 100 million t-CO2 of cumulative GHG emission reductions and removals through the JCM by fiscal year 2030, and approximately 200 million t-CO2 by fiscal year 2040. The JCM is also intended to be utilized as a means to achieve Japan’s Nationally Determined Contribution (NDC)*¹.
As of August 2025, Japan has established the JCM with 30 partner countries, primarily focusing on GHG emission reductions in the energy sector. However, no JCM credits have yet been issued in the agricultural sector, and efforts are underway to facilitate their issuance. The initiative to reduce methane emissions from rice paddies in the Philippines is one of the most advanced projects among partner countries.
■Efforts to Reduce Methane Emissions from Rice Paddies in the Philippines
In the Philippines, the agricultural sector accounts for approximately 25% of total GHG emissions, equivalent to about 54 million t-CO2*². Methane emissions from rice paddies are said to represent more than half of this amount*³.
The Alternate Wetting and Drying (AWD) technique, officially approved as a target for JCM credits between Japan and the Philippines, is a method where rice paddy fields are periodically drained and the soil is dried for a certain period before being re-flooded. This process is repeated throughout the rice cultivation period. As conventional flooded paddies are prone to methane generation, introducing dry periods can reduce methane emissions by approximately 30% compared to continuously flooded conditions*⁴.
This project is a pioneering effort globally and has the potential to circulate in the market as JCM credits derived from rice cultivation.
■Project Overview
Green Carbon has been developing several methane gas emission reduction projects using AWD in collaboration with research institutions in the Philippines. Osaka Gas has now invested in the project being advanced by Green Carbon in the Ilocos Norte area, and both companies will collaborate to promote the project going forward.
In this project, Green Carbon will coordinate with local farmers to implement AWD and expand the target agricultural land. If JCM credits are successfully issued in the future, Osaka Gas anticipates utilizing them through sales of the credits themselves or by offering carbon-offset city gas through bundled sales of JCM credits and city gas.
■Initiatives of Each Company
Looking ahead to the expansion of the JCM market, Osaka Gas has also been participating in AWD-based methane emission reduction initiatives in the provinces of Batangas and Laguna, Philippines, since fiscal year 2024. The projects in both provinces aim to be the world’s fastest*⁵ to issue JCM credits in the agricultural sector, setting an important precedent in the Philippines, which is promoting AWD adoption. Including this new project, Osaka Gas has now invested in projects across three regions (Ilocos Norte, Batangas, and Laguna), which is the largest number of regional entries to date*⁶. By procuring JCM credits from multiple regions, the company aims to ensure a stable supply, mitigating risks such as adverse weather and climate change.
Green Carbon is engaged in creating nature-based carbon credits, primarily in Southeast Asia, developing a wide range of projects including forest conservation, rice paddies, mangrove afforestation, reduction of cattle burps, and biochar projects. In the Philippines, the company is particularly focused on JCM projects for methane gas reduction in rice paddies through AWD adoption, structuring projects based on the methodology approved in early February 2025. In Japan, it has been decided that JCM credits will be applicable to offset excess emissions in corporate reports under the GX-ETS*⁷, and demand is expected to grow further. In light of this, Green Carbon aims to contribute to the decarbonization of both the Philippines and Japan while ensuring the economic viability of its projects.
Through this project, both companies will contribute to achieving a carbon-neutral society by 2050, while simultaneously increasing the income of rice farmers and reducing environmental impact.
■Company Profiles
| Company | Osaka Gas Co., Ltd. |
| Head Office | 4-1-2 Hiranomachi, Chuo-ku, Osaka, Japan |
| Representative | Masataka Fujiwara, President |
| Established | April 1897 |
| Business Activities | Production and sale of gas, generation and sale of electricity, etc. |
| Company | Green Carbon Inc. |
| Head Office | Hanzomon PREX North 9F, 2-3-2 Kojimachi, Chiyoda-ku, Tokyo, Japan |
| Representative | Jun Okita, CEO |
| Established | February 2019 |
| Business Activities | Carbon credit creation and sales, agricultural-related business, environmental-related business, and other related activities, including ESG consulting. |
*1: Nationally Determined Contribution (NDC) refers to the greenhouse gas reduction targets that each country submits and updates every five years under the Paris Agreement. On February 18, 2025, the Japanese government made a cabinet decision and submitted to the UN its goal to reduce GHG emissions by 60% by fiscal year 2035 and 73% by fiscal year 2040, from 2013 levels.
*2: Based on the 2020 GHG inventory. See Japan International Cooperation Agency (JICA), “The Final Report on the Data Collection Survey on Promoting Green Transformation (GX) Policies in the Republic of the Philippines” (March 2024).
*3: Based on the 2010 GHG inventory. See JICA, “The Final Report on the Data Collection Survey on Promoting Green Transformation (GX) Policies in the Republic of the Philippines” (March 2024).
*4: See Ministry of Agriculture, Forestry and Fisheries, “Regarding Methane Reduction in Rice Paddies through Alternate Wetting and Drying (AWD) Technology” (June 2025).
*5: The project in Batangas and Laguna in which Osaka Gas has invested (No. PH009) was the first to complete its public comment period and is undergoing validation, along with a project by another company (No. PH008).
*6: According to research by Osaka Gas.
*7: GX-ETS (Green Transformation-Emissions Trading Scheme). A system where companies reduce emissions and trade emission allowances under government-set caps, based on Japan’s “Growth-Oriented Carbon Pricing” concept.