In order to generate revenue for its environment agency's projects to reduce greenhouse gas emissions, Japan is mulling over a proposal to impose tax on coal.
The proposal seeks to rationalise the fuel tax structure to ensure that the levies cover different types of energy resources. It highlights the fact that unlike oil and natural gas, there are no taxes on coal in Japan.
Environment minister Shunichi Suzuki reportedly revealed that the proposed revision of fuel taxes, including introduction of coal tax, was the first part of a three-phased programme. This would help Japan achieve its target of reducing greenhouse gas emissions by six per cent from 1990 levels under the Kyoto Protocol. While the first phase would be completed by 2004, the second segment -- which includes the implementation of a more comprehensive environmental taxation system -- is planned for 2005-2007.
Trade and industry minister Takeo Hiranuma has drafted the plan which has now been submitted to a panel comprising Japanese Prime Minister Junichiro Koizumi's top economic advisers. It is believed that the ministry is considering a tax of us $5.81 per tonne. Half of the amount recovered would go to the environment agency.
Japan is the biggest importer of coking coal, used in steel-making, and one of the biggest importers of thermal coal, which is used to generate power.