The scheme sets voluntary emissions targets on 150 firms, which can buy and sell trade emissions permits to help stay within their caps.

It has been a big success, Japan's Environment Minister Ichiro Kamoshita told Reuters in an interview.

"Our goal is to expand the scope of participants and boost companies' awareness on the issue so that they feel guilty about not participating in such a scheme," he said.

The Environment Ministry is keen on placing mandatory caps on industrial emissions, as the European Union does through its carbon trading scheme, which sets an overall limit on carbon emissions by big businesses.

Japan is struggling to achieve its Kyoto target of cutting emissions from 1990 levels by 6 percent over the 2008-2012 period. But the idea has met strong opposition from business groups and the Ministry of Economy, Trade and Industry.

"We believe the (European style) cap and trade system is the most effective means to cut emissions, but we need to gain a consensus. We can't leapfrog," he said.

Japan, home to the ancient city that gave its name to the Kyoto Protocol, has proposed halving global emissions by 2050. But the country's emissions as of March 2006 were 13.8 percent above the Kyoto goal, hit by increases in household and office emissions, sectors difficult for the government to step in.

"We should mobilise every tool we have, like the tax system, government restrictions and budget, or we won't succeed," he said.