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The industry ministry is considering introducing an emissions trading system for automakers in the late 2020s to encourage them to develop electric cars, informed sources said Friday.

Under the system, an upper limit on greenhouse gas emissions will be set for each automaker. If an automaker's emissions exceed the limit, it would be able to come under the limit by buying quotas off other companies.

The ministry believes that the introduction of the system will help automakers accelerate the development of electric vehicles to avert additional costs, the sources said.

An emissions reduction in the auto industry is crucial to meeting Prime Minister Yoshihide Suga's goal of achieving carbon neutrality for Japan by 2050.

The government is planning to ban sales of new vehicles that run solely on gasoline starting in the mid-2030s as part of efforts to cut emissions. Vehicles that will be allowed for sale after the mid-2030s will include gasoline-electric hybrids, plug-in hybrids, electric cars and fuel-cell vehicles.

There is concern that a uniform emissions limit will deliver a serious blow to automakers. Giving automakers a choice of shifting to electrified vehicles or buying emissions quotas is expected to make it easier for them to reduce emissions.

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