Japan Doubles Down on Blue Carbon with Grants and Cross-Border Collaboration

Two recent developments signal a step change in Japan's blue carbon sector. The Ministry of Environment (MoE) has opened a JPY300 million ($1.9 million) funding window for seaweed-based carbon removal, and Japanese developer Green Carbon has formalised a five-year partnership with Indonesian firm Pesisir Lestari for mangrove restoration work.

Scientists are studying the mangrove forest along the Indonesian coast to monitor carbon sequestration and biodiversity. AI generated picture.

Blue carbon is the term used for carbon stored in coastal and marine ecosystems — chiefly mangroves, tidal marshes, and seagrasses. Beyond carbon storage, these habitats deliver a range of additional benefits, from shoreline protection to biodiversity preservation.

The MoE programme will distribute up to JPY100 million to each of three selected projects, with implementation running through to 31 March 2027. Funded teams will be tasked with selecting and cultivating seaweed seedlings, then transferring and sinking them to the appropriate sea depth. Each developer must build a system to measure and verify carbon storage, report results to the MoE, and retain the rights to any carbon credits the project generates. Private companies, universities, and research organisations are all eligible to apply, with the deadline set for 30 April.

Under their MoU, Green Carbon and Pesisir Lestari have already pinpointed over 1,000 hectares of candidate mangrove restoration sites in Indonesia through a combination of remote sensing and field surveys. The collaboration will centre on developing accurate tools for estimating carbon accumulation in both above-ground biomass and sediments, with sequestration potential to be calculated across a 35-year timeframe. Pesisir Lestari claims to have helped conserve 2,100 mangrove and coastal ecosystems to date.

The two announcements together paint a picture of a maturing market. Japan's blue carbon sector currently operates through the voluntary J-Blue Credit scheme, run by the Japan Blue Economy Association (JBE), which issues credits for CO₂ removal by seaweed, seagrass, and mangroves. A landmark moment came in December, when trading house Itochu Corporation became the first Japanese company to receive JBE-issued blue carbon credits, earned through a mangrove planting project in southern Japan. On the policy side, a 2024 amendment to the domestic J-Credit scheme opened the door to carbon dioxide removal credits (CDRs) from blue carbon sources, though no official methodology has been established yet.