Kanematsu Corporation (hereinafter “Kanematsu”) and Green Carbon, Inc. (hereinafter “Green Carbon”) have entered into a partnership agreement for creating carbon credits by reducing rice paddy methane emissions and for jointly promoting the distribution of environmentally friendly rice grown using that method, in the Japanese and Vietnamese markets.

• Background

According to the Ministry of Agriculture, Forestry and Fisheries, “methane-generating bacteria” in rice paddies cause methane gas, a type of greenhouse gas, to be produced in the process of decomposition of organic matter in the soil. This is estimated to constitute approximately 40% of Japan’s total methane emissions. Reduction of “rice paddy methane” emissions is one of the initiatives for achieving zero emissions and sustainable development in the agriculture, forestry, and fisheries sectors that are presented in the Japanese government’s Strategy for Sustainable Food Systems, MIDORI. One effective way to reduce emissions is to extend the midseason drainage period (a regular step in rice production that involves draining paddy fields to dry the soil): extending the customary period by seven days is said to reduce methane gas emissions by around 30%. In March 2023, the J-Credit Scheme Steering Committee recognized the extension of the midseason drainage period in paddy rice production as an effective methodology. Following this recognition, Green Carbon and other businesses have been working with farmers to reduce “rice paddy methane” emissions and create J-Credits (*1) based on the reductions.

(*1) A scheme whereby the national government certifies CO₂ emissions reduction resulting from introduction of energy saving equipment, forest management, and other initiatives as “credits”

• Green Carbon’s initiatives

With the vision to “save the earth with the power of nature,” Green Carbon’s business offers comprehensive support for the creation, registration, and sales of carbon credits. As part of its business, Green Carbon promotes a scheme known as the Paddy Field Consortium, whereby it comprehensively carries out the necessary registration procedures for J-Credit application, measurement of outcomes, and selling of the credits on behalf of applicants. The consortium is one of largest and most successful of its kind in Japan, involving rice paddy farmers and over 300 companies/agricultural corporations that cumulatively own more than 15,000 ha of rice fields in total as of May, 2024. The consortium expects to create 50,000 ha worth of J-Credits (approximately 200,000 t-CO2e) nationwide through extending the midseason draining period in 2024, as well as creating credits worth several tens of thousands of tons abroad this year.

• Partnership agreement

By leveraging the broad connections it has cultivated over many years through its rice business, as well as its knowledge of both the domestic and foreign rice markets, Kanematsu will not only promote sales of environmentally friendly rice but will also procure environmentally friendly rice and credits as a set and add to its lineup rice that contributes to Scope 3 reduction. Kanematsu and Green Carbon will work hand in hand to build a supply chain for distributing rice grown under the scheme as environmentally friendly rice. Ultimately, our aim is to spread environmentally friendly rice in the Japanese and Vietnamese rice sectors and help the advancement of decarbonization and sustainability in the agricultural/food supply chain.

One of the focus areas of Kanematsu’s GX initiatives in the three-year medium-term management plan “integration 1.0” launched in April 2024 is agriculture and food. In the food supply chain in which Kanematsu is deeply involved, we aim to contribute to decarbonization and a circular economy and build a sustainable supply chain through the creation and supply of low environmental impact food.

【Corporate Data】

Official name	Green Carbon, Inc.
Establishment	December 2019
Representative	Jun Okita, CEO
Office	IsaI AKASAKA, 5-2-33 Akasaka, Minato-ku, Tokyo
Business	Carbon credit creation consulting and agriculture-related business, R&D business, ESG consulting, business acquisition/selling business, etc.
Website	https://green-carbon.co.jp/en/