Japan faces ballooning costs to meet its greenhouse gas limits under the Kyoto protocol after data published on Wednesday showed that emissions last year increased to record levels more than 15 per cent above target.

The rise, caused by the shutdown of a major nuclear power plant, could add several hundred million dollars annually to Japan's bill for emissions credits – the market-traded pollution rights it has pledged to buy to close the gap between actual output and its Kyoto treaty commitment.