Overview and Progress of the JCM

December 9, 2014

Yuji Mizuno Director for International Negotiations,

Office of Market Mechanisms, Climate Change policy Division, Global Environment Bureau

Ministry of the Environment, Japan

JAPAN

Host Country

Leading low carbon technologies, etc, and implementation of mitigation

actions

Facilitating diffusion of leading low carbon technologies, products, systems, services, and infrastructure, as well as implementation of mitigation actions, and contributing to sustainable development of developing countries.

Appropriately evaluating contributions from Japan to GHG emission reductions or removals in a quantitative manner, by applying measurement, reporting and verification (MRV) methodologies, and use them to achieve Japan’s emission reduction target.

Contributing to the ultimate objective of the UNFCCC by facilitating global actions for GHG emission reductions or removals, complementing the CDM.

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MRV

JCM Projects

GHG emission reductions/

removals

MRV Methodologies will be developed

by the Joint Committee Used to achieve Japan’s emission reduction target Credits

Basic Concept of JCM

Mongolia Jan. 8, 2013 （Ulaanbaatar）

Bangladesh Mar. 19, 2013 (Dhaka)

Ethiopia May 27, 2013 (Addis Ababa)

Kenya Jun. 12,2013 (Nairobi)

Maldives Jun. 29, 2013 (Okinawa)

Viet Nam Jul. 2, 2013 (Hanoi)

Japan has held consultations for the JCM with developing countries since 2011 and signed the bilateral document for the JCM with Mongolia, Bangladesh, Ethiopia, Kenya, Maldives, Viet Nam, Lao PDR, Indonesia, Costa Rica, Palau, Cambodia and Mexico.

Japan held Joint Committee meetings with Mongolia, Bangladesh, Ethiopia, Kenya, Maldives, Viet Nam, Lao PDR, Indonesia and Palau respectively.

Lao PDR Aug. 7, 2013 (Vientiane)

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Indonesia Aug. 26, 2013 (Jakarta)

Costa Rica Dec. 9, 2013 (Tokyo)

Palau Jan. 13, 2014 (Ngerulmud)

Cambodia Apr. 11, 2014 (Phnom Penh)

Mexico Jul. 25, 2014 (Mexico City)

Countries with which Japan has signed on bilateral documents

Project formation

Project development

Project implementation

Acquire credits

F/S support

projects

(Increase) JCM Large-scale project development (JPY 1.6 billion)

JCM development and implementation projects (JPY 2 billion)

(Increase) Financing programme for JCM projects (JPY 1.2 billion, JPY 3.6 billion over 3years)

JCM Project Flow

Financed projects

(New) Cooperation fund with JICA (JPY 4.2 billion)

(New) ADB Trust Fund (JPY 1.8 billion)

• Small-scale projects (several tens of millions to several hundreds of millions)

• Infrastructure (PPP projects, JICA overseas investment projects) (several billion to over 10 billion)

• Infrastructure (ADB pipeline projects) (several billion to over 10 billion)

FY 2014 JCM-related Projects of MOEJ

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Projects

採択案件一覧

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3 2

5 4

7

14

17

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15 9

6 8

18

9 11 10

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Selected Studies 1. The feasibility study to promote Low Carbon Technology application in India(Gujarat ,

Maharashtra ,Pumjab ） 2. Feasibility study on financing scheme development project for promoting energy efficiency

equipment installation in Indonesia(Jakarta, Bali etc.) 3. Low Carbon City Planning Project in Surabaya, Indonesia(Surabaya City) 4. Feasibility Study on Eco-Lease Scheme for Low Carbon Vehicle towards Joint Crediting

Mechanism Projects Expansion（Indonesia National Level） 5. Collaboration on Project for Developing a Low Carbon Society under collaboration between

Bandung city and Kawasaki city in Bandung, Indonesia(Bandung) 6. Study for Developing Environmentally and Culturally Sustainable Cities through the Joint

Crediting Mechanism in Siem Reap(Angkor Park and Siem Reap city) 7. Study on the Accelerating Implementation of Bangkok Master Plan on Climate Change through

the JCM(Bangkok) 8. Introduction of a recycling system for cars and parts in Thailand(Bangkok) 9. Strategic Promotion of Recovery and Destruction of Fluorocarbons （Bangkok/Johor Bahru ） 10. Demonstration Project on Installing an Evacuation Shelter with Renewable Energy as a “Low-Carbon/Resilient Model for Small Island Countries”(Palau etc.) 11. Feasibility study on comprehensive resource circulation system for low carbon society in

Republic of Palau(Palau) 12. The feasibility study toward eco-island in cooperation between Kien Giang Province and Kobe City(Kien Giang Province) 13. Hai Phong Green Growth Action Plan Development in Association with Kitakyushu City（Hai

Phong City） 14. Ho Chi Minh City – Osaka City Cooperation Project for Developing Low Carbon City (Ho Chi Minh

City) 15. Feasibility Study on a Large-Scale GHG Emissions-Reduction Project Development in the Iskandar

Development Region, Malaysia(Iskandar Development Region) 16. Feasibility Study on Rice Husk Power Generation System for Low-carbon Communities in

Ayeyarwady Region, Myanmar(Ayeyarwady) 17. Study for the development of JCM projects for comprehensive improvements in the power

generation, transmission and distribution systems in Ulaanbaatar City and on the possibility of nationwide horizontal application of the same improvement model in Mongolia(Ulaanbaatar)

18. Feasibility study on a programme-type finance scheme for the JCM in Mongolia(Ulaanbaatar) 19. JCM Feasibility Studies of GHG Mitigation Projects Contributing to Low Carbon Old Capital based

on City-to-City Cooperation between Vientiane and Kyoto("Vientiane) 4

Large-Scale JCM Feasibility Studies in 2014 by MOEJ

See pamphlet for more details.

(Project Formation: Feasibility Study for Large-scale project development) Nineteen feasibility studies are currently being conducted in the Asia &

Pacific region. Eight projects are being conducted based on city-to-city cooperation between Japanese local governments and local governments in host countries. These feasibility studies are not limited to technology transfer, but also include the sharing of experiences and knowledge of local governments in Japan.

Eligible fields: - Energy savings (factories, commercial facilities, residential areas, power generation facilities) - renewable energy (solar power, window power) - waste to energy (recycling, energy use) - transport (introduction of electric vehicles, park & ride) - water infrastructure, etc.

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Achievements & Challenges (1)

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Government of Japan

International consortiums (includes private Japanese entities)

Finance up to a maximum of 50% of initial investment costs

Measure GHG emissions through MRV. Delivery of JCM credits (partial or fully) to Japanese government after issue.

The budget for FY 2014 1.2 billion JPY (approx. USD12 million) per year by FY2016 (total 3.6 billion JPY)

(Reference) Financing Programme for JCM Projects by MOEJ

FY 2014 budget: JPY 1.2 billion (JPY 3.6 billion over 3 years)

Three years maximum

Target group

Scope of financing

Project implementation period

Eligible projects

International consortiums (including private entities from Japan)

Those projects starting construction after decision reached on financing, and which will finish construction within that year, and which will be registered and issued credit as a JCM project.

Projects which introduce facilities and equipment to reduce CO2 emissions from energy sources (includes costs for construction, installation, administration, etc.)

Indonesia: ◆Power Generation by Waste Heat Recovery in Cement Industry Waste heat recovery system with suspension preheater boiler and air

quenching cooler boiler is installed in cement production process and generates electricity (28 MW) to be used in the cement plant.

◆Palm Waste Biomass Power Generation Project Fluidized bed furnace is installed in a biomass power generation plant

(6.2 MW) utilizing EFB (Empty Fruit Bunch) as a fuel. ◆Solar Power Hybrid System Installation to Existing Base Transceiver

Stations in Off-grid Area Solar power (900 kW) and lithium ion batteries are installed to replace

inefficient diesel generators at mobile base stations. ◆Energy Saving through Introduction of Regenerative Burners to the

Aluminum Holding Furnace of the Automotive Components Manufacturer

Regenerative burners which recover heat from exhaust gas efficiently are installed in a casting process.

◆Energy Saving for Textile Factory Facility Cooling by High Efficiency Centrifugal Chiller

Chiller with a high efficiency compressor and economizer cycle are installed.

Viet Nam: ◆Anaerobic Digestion of Organic Waste for Biogas Utilization at

Market Organic waste discharged from a market is used to generate

biogas in a methane fermentation system. The biogas is then supplied to a seafood processing factory.

◆Eco-driving by Utilizing Digital Tachograph System Trucks are fitted with eco-drive improving system using digital

tachographs, realizing CO2 emission reduction and safe-driving.

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Projects adopted in the Financing Programme for JCM Projects in 2014

Illustration

平成25年度予算 ○○百万円

MOEJ

JICA, other

Fund for expansion of low-carbon technologies

Financial Support, other

Collaboration

GHG reductions

Subsidy

Financial assistance/financial investments for overseas investment and lending

Supported Project by JICA, etc.

JCM Project

Collaboration

・Waste to Energy Plant ・Renewable Energies ・Water Supply and Sewage Systems ・Transportation 8

New Support Program Enabling “Leapfrog” Development (Fund) FY 2014 budget: JPY 4.2 billion

By utilizing the country’s superior and advanced low-carbon technologies, Japan assists developing countries to enable “leapfrog” development and helps developing countries achieve the “Harmony with Nature, Low Carbon and Sound Material Cycle Society,” which aims to break away from material civilization as the new paradigm for the 21th century in the Asia-Pacific region.

Establishment of a fund to finance projects that reduce GHG emissions in collaboration with other projects supported by JICA and other national organizations. Through this finance scheme, the expansion of superior and advanced low-carbon technologies in Japan can be achieved because even if the initial costs for projects are high, its emissions reduction effects are also high. The project aims to acquire credits using JCM by creating a low-carbon society in entire cities and regions in a broader range of fields.

Background & Purpose

Project Overview

Fund established April 22, 2014. Call for proposals from April 25, 2014.

平成25年度予算 ○○百万円

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New Support Program Enabling “Leapfrog” Development (ADB) FY 2014 budget: JPY 1.8 billion

Background & Purpose

Project Overview

By utilizing the country’s superior and advanced low-carbon technologies, Japan assists developing countries to enable “leapfrog” development and helps developing countries achieve the “Harmony with Nature, Low Carbon and Sound Material Cycle Society,” which aims to break away from material civilization as the new paradigm for the 21th century in the Asia-Pacific region.

Additional costs are reduced with the use of funds that are donated to the ADB trust fund. This allows advanced technologies that are not being used in ADB projects because of high introductory costs to be adopted. Through this finance scheme, the assistance to developing countries from ADB will lead to “leapfrog” development, and allow Japan to acquire credit using JCM.

Conclusion of MoU between MOEJ and ADB on June 25, 2014.

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Illustration

Additional costs are reduced as the cost is covered by funding from Japan. This financing scheme enables high-cost, advanced technologies to be adopted. (Selected from pipeline projects of ADB)

Trust Fund

Additional cost to introduce advanced

technology

Current ADB projects

Mitigation using common technology

ADB fund

GHG reductions

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(Project development: Three financing Schemes) 1. Financing Program for JCM Projects

1) Seven projects are being executed this fiscal year. 2) The first project has just been registered by the Joint Committee in Indonesia.

2.Collaboration Fund with JICA 1)Started from this fiscal year, and open call for proposals was closed last week. 2)Moving on to the review process on the proposals.

3. ADB Trust Fund 1) Started from this fiscal year, and contributions to the ADB trust fund and consultations on operational procedures are completed. 2) Moving on to the selection process of candidate projects from ADB’s pipeline projects, etc.

Achievements & Challenges (2)

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1. Achievement of establishing effective, low-carbon projects in line with their needs of host countries

2. Expansion of the range of participating companies and local governments

3. Spread and diffusion of low-carbon technologies in host countries taking advantage of the implementation of JCM projects

Towards the creation of a win-win relationship

Advanced low-carbon technologies

＋Strength of Japan’s technologies ・Low failure rates, long-term stable operations ・Environmentally friendly

Contributes to the establishment of a low-carbon society in host countries

Future Outlook

Thank you for your kind attention.

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