The Ministry of the Environment aims to obtain 3.5 million tonnes worth of emission credits through the investment, the major Japanese daily Yomiuri Shimbun said.

The Kyoto Protocol, a landmark pact against global warming, allows industrialised nations to lighten their commitments to reduce harmful greenhouse gases by investing in gas-cutting projects in developing countries.

Under the protocol's clean development mechanism (CDM), industrialised nations can count the gas cuts through such projects as reductions in their own emission-curbing targets.

The ministry is due to select six projects for the investment among eight projects planned in five countries, the daily said.

Some private Japanese companies, including trading houses and power utilities, have already invested in CDM projects. They include the manufacture of fuel by processing cocunut shells in Indonesia, development of a diesel substitute from a vegetable oil in India, collection of methane gas from drainage of tapioca plants in Thailand and recycling of urban garbage in Vietnam, the report said.

The ministry plans to seek 1.5 billion yen (12.7 million dollars) for the year from April 2008 in going ahead with CDM projects, the daily said.

Under the Kyoto Protocol, Japan has committed to cut its annual greenhouse gas emissions to 1,180 million tonnes in five years from 2008, down from the 2005 level of 1,360 million tonnes, the daily said.

A government panel called on the nation last month to step up efforts to cut greenhouse gas emissions, warning the homeland of the Kyoto Protocol was on course to miss its own obligations.

Japan is obligated by the protocol to reduce emissions by an average of six percent between 2008 and 2012 compared with 1990 levels.

Japan's emissions rose eight percent in the financial year to March 2006 as the world's second largest economy enjoys a record expansion after recession in the 1990s.

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