ITOCHU Corporation (headquartered in Minato-ku, Tokyo; Keita Ishii, President & COO; hereinafter “ITOCHU”) announced today that it formed a business partnership with CF Partners (headquartered in London, UK; Jonathan Navon and Thomas Rassmuson, Co-CEOs; hereinafter “CFP”), a UK-based company engaging in the sale of emissions credits in Europe, to expand emissions credits trading.

In April 2023, the EU Council decided to introduce the Carbon Border Adjustment Mechanism (CBAM). CBAM will charge a cross-border carbon cost on certain products including steel products, aluminum, iron, cement, fertilisers and other items subject to this mechanism exported from outside the EU into the EU market. From October 2023, a transition period will begin where reporting of emissions is required. After the transition period, CBAM will be fully implemented from 2026-2027 with importers of CBAM product being required to purchase CBAM certificates which are linked to the EU-ETS price in the week before the import of goods. At the same time, the EU Council also decided to expand the EU Emissions Trading System (EU-ETS) to include the maritime transport sector applicable to vessels above 5,000 dead weight tonnage, operating on intra-European Economic Area voyages and 50% of voyages to and from European Economic Area from 2024..

CFP is a leading provider of carbon, energy and environmental solutions, specialising in working with large industrial and complex energy users. The firm assists clients to navigate the transition to a low carbon future, by providing expertise in physical and financial risk management solutions across carbon markets, energy procurement and environmental products. CFP have traded in total more than 2.5 billion tons of carbon credits in both the EU-ETS and on voluntary carbon markets since its foundation in 2006 with a revenue of around 4.5 billion GBP in Y/E in March 2023.

In response to the recent EU agreement, ITOCHU and CFP have agreed to enter in business partnership. This will cement and enhance a working long term relationship that spans over a decade. ITOCHU will act as a sales channel for carbon credits procured and owned by CFP, particularly in Japan and other Asian countries, using its global network of customers in many different industrial sectors. Jointly with CFP, it will organize seminars and distribute related information to customers in a wide range of industries, customized solutions and services in a bid to cultivate demand for actions related to the EU-ETS, with a focus on the fulfillment of the CBAM requirements, and to increase carbon credit sales.

Through these efforts, ITOCHU will steadily carry out the basic policy in its medium-term management plan, “realizing business transformation by shifting to a market-oriented perspective” and “enhancing our contribution to and engagement with the SDGs through business activities.”