#Japan #Carbon Credits #JAXA #Chiyoda #EY Japan

EY Japan and JAXA Team Up for Carbon Credit Innovation

In a significant move for sustainable development, EY Japan, officially known as EY ShinNihon, has announced a collaboration with the Japan Aerospace Exploration Agency (JAXA) to improve the reliability of carbon credits using satellite data. This initiative forms part of JAXA's Space Strategy Fund project, aimed at harnessing advanced technologies to bolster Japan's competitive edge in the increasingly competitive global space sector.

The Space Strategy Fund and Its Impact

The Space Strategy Fund, established by various governmental bodies including the Cabinet Office and the Ministry of Economy, Trade and Industry, supports the development of innovative technologies across various fields such as transportation, satellites, and exploration. These endeavors are crucial for enhancing Japan's technological proficiency and industrial capability in space.

Among the projects selected is the initiative led by Archeda, a Tokyo-based company specializing in the application of satellite data for nature-based carbon credits. The goal of this project is to use satellite technology to enhance the authentication processes related to carbon credits derived from natural sources like forests and farmlands. As global demand for such credits rises in the face of climate change, ensuring their accuracy and reliability has become a critical challenge.

Addressing the Challenges of Carbon Credit Reliability

Nature-based carbon credits allow for the quantification of CO₂ absorption and reduction benefits provided by natural environments. However, ensuring the consistent and accurate measurement of greenhouse gas absorption and maintaining transparency and reliability throughout the verification process (known as Measurement, Reporting, and Verification or MRV) represent significant hurdles. Given the growing importance of these credits in achieving carbon neutrality, implementing efficient and advanced MRV processes is vital.

Satellite data stands out as a promising solution, enabling wide-ranging and continuous observation that is essential for robust MRV. Beginning in 2024, EY ShinNihon plans to utilize satellite data to identify assets located in remote or mountainous areas while also investing in the training of professionals in the fields of space business and sustainability.

The Role of EY ShinNihon

As a pioneer in the audit and assurance services sector, EY has accumulated extensive experience in ensuring the reliability of sustainability-related information. This collaboration aligns perfectly with EY's mission to create new value for clients while building trust in capital markets, thereby contributing to a better society through the application of data and advanced technology.

Keiichi Ushijima, the East Asia and Japan Regional Leader for EY Climate Change and Sustainability Services, remarked, "The use of satellite data in advisory and assurance for sustainability has gained attention as it enhances visibility and data comparability, significantly increasing transparency and reliability. Carbon credits are an effective tool in progressing towards carbon neutrality, yet ensuring their reliability remains a longstanding issue. We hope this initiative will demonstrate practical steps towards improving reliability and contribute to the realization of a sustainable society."

Archeda's Commitment to Carbon Credit Integrity

Tsukasa Tsumura, CEO of Archeda, emphasized the shared global challenge of ensuring the reliability of nature-based carbon credits in the transition towards a decarbonized society. "By utilizing satellite data and AI technologies to enhance the MRV process, our collaboration with EY ShinNihon, a leader in the assurance sector, is of immense significance to this project, enabling us to pursue a model of carbon credits that stakeholders can genuinely trust."

Looking Ahead

The collaboration between EY Japan and JAXA underscores a pivotal shift towards integrating advanced technology in environmental solutions, particularly regarding carbon credits. As both entities work together to leverage satellite data for sustainability practices, they aim to make strides not only in Asia but worldwide, pushing forward the mission of achieving a sustainable future for all.

With their vast network and expertise, EY and Archeda are poised to tackle the intricate challenges of carbon credit implementation, ensuring transparency and reliability that can instigate meaningful changes in combating climate change.