Knowledge Introducing Carbon Neutrality Initiatives by Region and Country – What Are the Risks of Delayed Action?（1/3）～Regulatory Trends for Carbon Neutrality by Region and Country～

To achieve carbon neutrality, regions and countries around the world have implemented a variety of measures. For example, the EU has adopted the “European Climate Law,” which legally mandates greenhouse gas reduction targets and enforces strict regulations. In contrast, the United States and the APAC region are taking more flexible approaches tailored to the specific needs of their industries and local conditions.

For companies to respond effectively to these international trends, it is crucial to accurately track CO2 emissions not only within their own operations but also throughout their entire supply chain. Delays in disclosing information or reducing emissions can expose companies to risks such as the suspension of transactions by partner firms. Therefore, prompt action is essential.

This article provides a detailed overview of how various countries are pursuing carbon neutrality in three parts. It also explains the risks associated with delayed action and outlines the measures that companies should take and can be used for reference.

1. Regulatory Trends for Carbon Neutrality by Region and Country

To achieve carbon neutrality, a variety of measures have been put in place. Global companies are expected to address not only the energy and materials they consume directly (Scope 1 and 2) but also indirect emissions (Scope 3) generated throughout their supply chain. In the following sections, we examine the regulatory trends for carbon neutrality in different regions and countries.

Regulatory Trends for Carbon Neutrality in the EU

Within the EU, as a major initiative in addressing climate change, the “European Climate Law” was adopted by the European Council in July 2021. This law legally enshrines greenhouse gas reduction targets for 2030 and 2050, supported by the comprehensive “Fit for 55” policy package.

Key measures include:

Strengthening emissions trading (increasing the target from 43% in 2005 to 61% by 2030)
Raising energy efficiency targets (improving from 32.5% in 1990 to between 36% and 39% by 2030)
Prohibiting the sale of new gasoline vehicles after 2035

Reference：

Agency for Natural Resources and Energy – “Section 1: Global Trends in Decarbonization (Japanese only)”

Regulatory Trends for Carbon Neutrality in the United States

The United States aims to decarbonize its power sector by 2035. In addition, the U.S. is promoting electrification in the industrial sector, while in areas where electrification is challenging, the use of clean hydrogen is being encouraged.

Furthermore, the energy transition strategy includes regulations on HFCs (as substitutes for ozone-depleting substances) and methane emissions from oil and gas development. In the aviation sector, the plan is to shift to sustainable aviation fuels, with specific measures being implemented across various sectors.

Reference：

Agency for Natural Resources and Energy – “Section 1: Global Trends in Decarbonization (Japanese only)”

Regulatory Trends for Carbon Neutrality in the APAC Region

In the APAC region, countries such as Singapore, Thailand, Indonesia, and Vietnam have set unique national targets and policies. With rapid economic growth in the region, efforts to curb emissions are taking on heightened importance. One notable requirement is that companies address a broad range of emissions—especially Scope 3—throughout their supply chains.

Singapore

Singapore has set a target to achieve net-zero emissions by 2050. In 2022, it became mandatory for publicly listed companies to progressively disclose sustainability reports. Moreover, from 2025 the ISSB standards will take effect, and beginning in 2026, companies will also be required to disclose Scope 3 data.

Thailand

Thailand aims for carbon neutrality by 2050 and net-zero emissions by 2065. It plans to reduce GHG emissions by 30% by 2030. Additionally, since August 2022, oil companies have been required to report Scope 1 and 2 emissions—with fines imposed for non-compliance—thereby enforcing strict environmental accountability.

Indonesia

Indonesia has set a goal of achieving net-zero emissions by 2060 and is considering the introduction of a carbon tax by 2025. Since 2023, financial institutions have been required to disclose sustainability reports, and further measures—including a carbon tax—are under consideration for 2025.

Vietnam

Vietnam aims to achieve net-zero emissions by 2050. Since 2016, the government has required all publicly listed companies to submit sustainability reports. Additionally, Vietnam has announced plans to establish an emissions trading market by 2025.

Next page　2. Risks and Background Related to the Calculation and Disclosure of CO2 Emissions（2/3）

Achieving Carbon Neutrality

We assist in realizing carbon neutrality in your business, from visualizing and analyzing CO2 emissions to exploring and implementing reduction strategies.

View solution details