JCM (Joint Crediting Mechanism) Introduction of

JCM (Joint Crediting Mechanism)Introduction of Decarbonizing Technologies

July 29, 2021Ministry of the Environment, Japan

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Ministry of the EnvironmentGovernment of Japan

Basic Concept of the JCMFacilitating diffusion of leading decarbonizing technologies ,etc and infrastructure as well as implementation of mitigation actions, and contributing to sustainable development of developing countries.

Appropriately evaluating contributions from Japan to GHG emissions reduction or removal in a quantitative manner and use them to achieve Japan’s emissions reduction target.

Contributing to the ultimate objective of the UNFCCC and use of market mechanisms, including the JCM, is articulated under Article 6.

JAPANPartner CountryLeading low-carbon technologies, etc, and

implementation of mitigation actions

JCMProjects

GHG emissions reduction/ removal

Operation and management by the Joint Committee which consists of

representatives from the both sides

Used to achieve Japan’s emissions reduction target Credits

*measurement, reporting and verification

MRV*

UNFCCC, Article 6 of the Paris Agreement

JCM

Reporting and Corresponding Adjustment

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Contributions from Japan

Incentivize selecting advanced low-carbon or decarbonizing by the financial support

to initial cost

GHG emissions

Initial cost

GHGem

issions

Initial cost

Japanese government

& entities

Credits

Financial support

Select

Japan will acquire a part of JCM

credits(in return to the

financial support)

Partner Country government

& entities

Emission reductions

Conventional equipment & facility

Advanced low-carbon or decarbonizing equipment & facility

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JCM Partner Countries

Mongolia Jan. 8, 2013（Ulaanbaatar）

BangladeshMar. 19, 2013(Dhaka)

EthiopiaMay 27, 2013(Addis Ababa)

Kenya Jun. 12,2013 (Nairobi)

MaldivesJun. 29, 2013(Okinawa)

Viet Nam Jul. 2, 2013 (Hanoi)

Lao PDR Aug. 7, 2013(Vientiane)

Indonesia Aug. 26, 2013(Jakarta)

Costa Rica Dec. 9, 2013(Tokyo)

Palau Jan. 13, 2014(Ngerulmud)

CambodiaApr. 11, 2014(Phnom Penh)

MexicoJul. 25, 2014(Mexico City)

Saudi Arabia May 13, 2015

ChileMay 26, 2015(Santiago)

MyanmarSep. 16, 2015(Nay Pyi Taw)

ThailandNov. 19, 2015(Tokyo)

the PhilippinesJan. 12, 2017(Manila)

http://japan.kantei.go.jp/

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Example of JCM model projects

Waste heat recovery in Cement Industry, JFE engineering, Indonesia

CNG-Diesel Hybrid Public Bus, Hokusan Co., Ltd., Indonesia Power Generation with

Methane Gas Recovery System,NTT DATA,Mexico

Amorphous transformers in power distribution, Hitachi Materials, Vietnam

Upgrading air-saving loom at textile factory, TORAY etc., Indonesia, Thai, Bangladesh

Regenerative Burners in industries, Toyotsu Machinery, Indonesia

Hydro Power Plant, ChodaiCo., Ltd., Philippines

Energy saving at convenience stores, Panasonic, Indonesia

Waste to Energy Plant, JFE engineering, Myanmar

Solar power ,Farmdo Co., Ltd.,Mongolia

Co-generation system at factory, Toyota, Nippon Steel Engineering, Indonesia, Thai

High-efficiency refrigerator, Mayekawa MFG, Indonesia

High-efficiency air-conditioning system, Hitachi, Daikin, Vietnam

LED street lighting system with wireless network control, MinebeaMitsumi, Cambodia

Floating Solar PV,TSB Co., Ltd.,Thai

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JCM Financing Programme by MOEJ (FY2013～2020) as of June29, 2021Total 186projects (17 partner countries) (●Model Project: 177 projects(including Eco Lease: 1project), ■ADB: 5 projects, ◆ REDD+: 2 projects, ▲F-gas: 2 projects) Other 1 project in Malaysia

115underlined projects have been started operation. 57 projects with * have been registered as JCM projects.Mongolia:8 projects●Heat Only Boiler (HOB)** ●2.1MW Solar PV in Farm* ●10MW Solar PV* ●8.3MW Solar PV in Farm * ●15MW Solar PV ■Upscaling Renewable Energy Sector ●Fuel Conversion by Introduction of LPG Boilers ■Improving Access to Health Services

Palau:5 projects●370kW Solar PV for Commercial Facilities*●155kW Solar PV for School*●445kW Solar PV for Commercial Facilities Ⅱ*●0.4MW Solar PV for Supermarket ●1MW Solar PV for Supermarket

Thailand:40 projects●Energy Saving at Convenience Store ●1MW Solar PV on Factory Rooftop*●Upgrading Air-saving Loom* ●Centrifugal Chiller & Compressor*●Centrifugal Chiller in Tire Factory●Co-generation in Motorcycle Factory ●Air Conditioning System & Chiller* ●Refrigeration System ●Ion Exchange Membrane Electrolyzer ●Chilled Water Supply System ●LED Lighting to Sales Stores●2MW Solar PV1 ●12MW Waste Heat Recovery in Cement Plant ●Co-generation System PV ●3.4MW Solar PV* ●Refrigerator and Evaporator ●Heat Recovery Heat Pump ●30MW Solar PV*●5MW Floating Solar PV* ●Boiler System in Rubber Belt Plant ●Air-conditioning Control System●Biomass Co-generation System ●Co-generation in Fiber Factory ●Biomass Boiler●25MW Solar PV in Industrial Park ●3.4MW Solar PV ●0.8MW Solar PV and Centrifugal Chiller▲ Introduction of Scheme for F-gas Recovery and Destruction ●37MW Solar PV and Melting Furnace ●Heat Exchanger in Fiber Factory ●15MW Biomass Power Plant in Sugar Factory ●8.1MW Solar PV ●Centrifugal Chiller to Machinery Factory ●5MW Solar PV ●2.6MW Solar PV ●2.5MW Solar PV with Blockchain Technology ●2MW Solar PV2 ●30MW Floating Solar PV ●Chiller ＆ PV ●Once-through Boiler in Garment Factory

Laos:5 projects◆REDD+ through controlling slush-and-burn●Amorphous transformers ●14MW Floating Solar PV●11MW Solar PV ●14MW Solar PV

Saudi Arabia:2 projects●Electorolyzer in Chlorine Production Plant●400MW Solar PV

Bangladesh:5 projects●Centrifugal Chiller ●Loom at Weaving Factory*●315kW PV-diesel Hybrid System*●Centrifugal Chiller* ■High Efficiency Transmission Line

Viet Nam:32 projects●Digital Tachographs* ●Amorphous transformers1* ●Air-conditioning in Hotel1* ●Electricity Kiln●Air-conditioning in Lens Factory* ●Container Formation Facility* ●Amorphous transformers 2* ●320kW Solar PV in Shopping Mall* ●Air-conditioning Control System ●High Efficiency Water Pumps* ●Energy saving Equipment in Lens Factory* ●Amorphous transformers 3* ●Energy Saving Equipment in Wire Production Factory* ●Amorphous transformers 4 ●Energy Saving Equipment in Brewery Factory ●High Efficiency Chiller ●Modal Shift with Reefer Container●Inverters for Raw Water Intake Pumps ▲ Collection Scheme and Dedicated System of F-gas ●Biomass Boiler to Chemical Factory ●Air-Conditioning System and Air Cooled Chillers ●49MW solar PV●57MW solar PV ●Biomass Boiler to Soluble Coffee Manufacturing Plant ●Once-through Boiler to Food Factory●Biomass Co-generation System to Food Factory ●Air-conditioning in Hotel2 ●2MW Solar PV ●Waste to Energy Project in Bac Ninh Province ●LED Lighting to Office Building●9MW Solar PV to Factories ●10MW Rice Husk Power Plant

Chile:5 projects●1MW Rooftop Solar PV*●3.4MW Rice Husk Power

Generation●3MW Solar PV1●3MW Solar PV2●34MW Solar Power

Indonesia:40 projects●Centrifugal Chiller at Textile Factory* ●Energy Saving at Convenience Store*●Refrigerants to Cold Chain Industry** ●Double Bundle-type Heat Pump*●Centrifugal Chiller at Textile Factory 2* ●30MW Waste Heat Recovery in Cement Industry*● 500kW Solar PV and Storage Battery* ●Regenerative Burners*●Centrifugal Chiller at Textile Factory 3* ●Old Corrugated Cartons Process*●Upgrading to Air-saving Loom* ●Centrifugal Chiller in Shopping Mall*●Smart LED Street Lighting System ●Once-through Boiler System in Film Factory*●Gas Co-generation System* ●Once-through Boiler in Golf Ball Factory*●1.6MW Solar PV in Jakabaring Sport City* ◆REDD+ through controlling slush-and burn●10MW Hydro Power Plant1 ●Looms in Weaving Mill* ●LED Lighting to Sales Stores●Industrial Wastewater Treatment System ●0.5MW Solar PV*●Gas Co-generation system ●Absorption Chiller* ●High Efficiency Autoclave●CNG-Diesel Hybrid Public Bus ●Rehabilitation of Hydro Power Plant ●12MW Biomass Power Plant●Injection Molding Machine3 ●2MW Mini Hydro Power Plant ●Boiler to Carton Box Factory●10MW Hydro Power Plant2 ●6MW Hydro Power Plant1 ●6MW Hydro Power Plant2●5MW Hydro Power Plant ●4.2MW Solar PV ●8MW Mini Hydro Power Plant●Thermal Oil Heater System ●3.3MW Rooftop Solar PV

Myanmar:9 projects●700kW Waste to Energy Plant* ●Brewing Systems toBrewery Factory ●Once-through Boiler in Instant Noodle Factory●1.8MW Rice Husk Power Generation ●Refrigeration System in Logistics Center ●8.8MW Waste Heat Recovery in Cement Plant ●7.3MW Solar PV●Brewing Systems and Biogas Boiler to Brewery Factory●Energy Saving Equipment to Complex Buildings

Cambodia:6 projects●LED Street Lighting※ ●200kW Solar PV at International School*●Solar PV & Centrifugal Chiller ●Inverters for Distribution Pumps●Solar PV & Biomass Power Plant ●1.1MW Solar PV

Costa Rica:2 projects●5MW Solar PV※

●Chiller and Heat Recovery System

Phillipines:15 projects●15MW Hydro Power Plant ●1.53MW Rooftop Solar PV●1MW Rooftop Solar PV ●1.2MW Rooftop Solar PV●4MW Solar PV ●2.5MW Rice Husk Power Generation●18MW Solar PV ●0.16MW Micro Hydro Power Plant●33MW Wind Power ●19MW Hydro Power Plant●2MW Solar PV (Eco Lease) ●Biogas Power Generation and Fuel Conversion●29MW Binary Geothermal Power Generation●60MW Solar PV ●20MW Flash Geothermal Power Plant

Ethiopia:1 project●120MW Solar PV

Mexico:6 projects●1.2MW Power Generation with Methane Gas Recovery System ●Once-through Boiler and Fuel Switching●20MW Solar PV ●30MW Solar PV1 ●Energy Efficient Distillation System ●30MW Solar PV2

Maldives:3 projects●186kW Solar Power on School Rooftop*■Smart Micro-Grid System■Greater Male Waste to Energy Project

Kenya:2 projects●1MW Solar PV at Salt Factory※

●38MW Solar PV

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“MoEJ Initiative for Decarbonized Infrastructure”(Announced on June 15, 2021）

MoE Japan is strengthening key public private partnerships to promote the development of environmental infrastructures overseas through JCM, which is attracting growing expectations, allowing GHG emission reductions to be realized in partner countries to contribute to the achievement of Japan and partner country’s NDC.Aiming for a cumulative GHG emission reduction of about 100 million tons of CO2 from JCM projects through public private partnerships by 2030. (approx. 10 billion USD as maximum Investment size through public-private partnerships).

Renewable Energies(Solar Power, Wind Power, Hydro Power,

Geothermal Energy, Biomass Energy, Green Hydrogen, and so forth)

Green Logistics(Including Cold)(Non Fluorocarbon Cooling System,

Modal Shift, Airports, Ports and Harbors, and so forth)

Waste management Infrastructure

(Waste to Energy, Recycling system, Landfill and so forth)

Solar Power Wind Power High Efficient Freezer Modal Shift Waste to Energy Improvement of landfill(Fukuoka method)

Actions to create favorable conditions for a diverisity and large scale JCM projects１．Formulation of Global Rules

Lead the discussion on Paris Agreement Article 6 (market mechanism), Make JCM as global rule for Article 6 ２．Diversification of Funds

Cooperate with public finance institutions and multilateral development Banks (JBIC, JOIN, ADB, World Bank), Develop guidance for private finance JCM projects

３．Global and Regional ExpansionExpand partners in the Indo Pacific region target area, Introduce advanced technologies through cooperation with third countries including the US and Australia, Applicate JCM to CORSIA

４．Facilitation of Decarbonization MarketPromote the transition to decarbonization , from the formulation of a long term strategy to its implementation, Spread Japan’s efforts on Zero Carbon Cities (Decarbonization Domino Effect), Utilize “JPRSI” (public private platform for environmental infrastructure)

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Financing Program to Demonstrate Decarbonizing Technology

Objectives and CharacteristicsFacilitating improvement and demonstration of seeds of advanced decarbonizing technologies in Japan to meet sustainable development needs in developing countries. Systematizing and packaging technologies, and facilitating collaboration (Co-Innovation) between Japanese entities and partners in developing countries.Serving as “potential JCM projects” and a trigger for the City-to-City Collaboration Programs.

Requirements and other informationParticipants of the model project shall be representative entity of an international consortium that consists of a Japanese entity and a foreign entity(ies) ,etc.Financial support is applied to a part of initial cost (A range of 1/3 – 2/3 of the total project cost)

Co-Innovation

Renovation and diffusion of decarbonizing technologies for developing countries through systematization and packaging of Japan’s seed technologies.

Ministry of the Environment, Japan

Local PartnerJapanese entities

Reverse Innovation to JapanFinancial support

Diffusion to local market

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ADB Trust Fund: Japan Fund for Joint Crediting Mechanism (JFJCM)

JPY 1 billion (approx. USD 10 million)Budget for FY2021

To provide the financial incentives for the adoption of advanced low-carbon technologies which are superior in GHG emission reduction but expensive in ADB(Asian Development Bank)-financed projects

Scheme

To develop ADB projects with sustainable and low-carbon transition perspective by introducing advanced low-carbon technologies as well as to acquire JCM credits

Purpose

MOEJ

ADB

JFJCM(Trust Fund)

ADB source（OCR1/ADF2)

JCM Credits

Grant (Sovereign)

Loan/Grant etc.

Project

Additional costs from advanced low-carbon

technologies

Mitigation through conventional technologies

(Selection from ADB pipeline)

MRV

Co-Financing partners(Other financial

institutions and funds) Loan/Grant etc.

Co-financing

GHG reduction

ContributionInterest Buy-down(Non-sovereign)

1 Ordinary Capital Resources are from: (1) Paid-in capital provided by shareholders, (2) Funds borrowed from capital markets and private placements, (3) Accumulated retained income (reserves). OCR loans are provided to middle-income countries at a quasi-market rate.

2 Asian Development Fund offers concessional loan and grant to low-income countries.

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JCM F-gas Recovery and Destruction Model Project by MOEJ

Three years in maximum (Ex. 1st year for scheme, 2nd year for facilities, 3rd year for recovery/destruction)

Purpose

Scope of Financing

Project Period

Eligible Projects•After financing is awarded, start implementation of recovery/destruction within three years

•Aim for the registration as JCM project and issuance credits

•Establish scheme for recovery and destruction•Install facilities/equipment for recovery/destruction•Implementation of recovery, transportation, destruction and monitoring

Government of Japan

International consortiums (which include Japanese entities)

Finance part of the cost in flat-rate (up to 40 million JPY/year)

Conduct MRV to estimate GHG emission reductions.At least half or ratio of financial support to project cost (larger ratio will be applied) of JCM credits issued are expected to be delivered to the government of Japan

【Budget for FY 2021】60 million JPY (approx. 0.60million USD) (1 USD = 100 JPY)

To recover and destroy F-gas (GHG except for energy-related CO2, etc) from used equipment instead of releasing to air, and reduce emissions

Manufacturers of equipment

which uses F-gas

Users of equipment

which uses F-gas

Entities for recovery and transportation of used F-gas (recycling or scrap entities)

Entities for destruction of used F-gas (may use existing

facility for destruction)

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Introduction of the Cold Chain Technologies through JCM

Transport Storage Transport SaleProducer Consumer

・Digital Tachographs・Reefer Container・CNG-Diesel Hybrid Equipment

・Chiller・Air conditioning・Solar PV

・Fridge/Freezer Showcase・Air conditioning・Solar PV

・Digital Tachographs・Reefer Container・CNG-Diesel Hybrid Equipment

MOEJ wants to support the Cold Chain Technologies not only each individual project but the overall as one package.

Eco-Driving by Utilizing Digital Tachograph SystemPP (Japan): NIPPON EXPRESS / PP(Vietnam) :NIPPON EXPRESS (VIETNAM)

JCM Model Project（FY2014） Partner Country: Vietnam

324 tCO2/year= (Reference CO2 emissions) [tCO2/year] - (Project CO2 emissions) [tCO2/year]

Reference CO2 emissions : 4,662 [tCO2/year]Project CO2 emissions : 4,338 [tCO2/year]

In this project, 130 trucks in use by NIPPON EXPRESS (VIETNAM) are fitted with an eco-drive improving system using digital tachographs, so that the quantity of fuel consumption, running distance and relevant data on driving behavior of drivers are continuously analyzed with cloud network in Binh Duong and Hanoi city, Vietnam.

The drivers are given advice in order to improve their driving behavior based on the analyzed data, and feedback linked to the training outcome is provided for further improving the driving behavior.

This project contributes to realizing improvement of transportation quality as well as fuel efficiency, which is directly linked with reduction in CO2 emissions.

Outline of GHG Mitigation Activity

Expected GHG Emission Reductions

Sites of Project1) Binh Duong Province

(70 trucks)2) Hanoi City

(54 trucks)Song Than Logistics Center Quang Minh Warehouse

21km to HCMC Noi Bai International Airport

Toyama City has concluded a cooperation agreementbetween Semarang City to realize low carbon societyunder inter-city cooperation. Based on the cooperationagreement, this project aims to reduce GHG emissionsthrough fuel switch from diesel to CNG. In the project,72 diesel bases owned by Trans Semarang, including 25large-sized buses and 47 mid-sized buses, are retrofittedfrom diesel engine to hybrid engine with CNG systemavailable. These buses are considered more cost-effective through fuel switching.

Introduction of CNG-Diesel Hybrid Equipment to Public BusPP from Japan: Hokusan Co.,Ltd. / PP from Indonesia: BLU UPTD Trans Semarang

JCM Model Project（FY2018） Partner Country: Indonesia

2,667 tCO2/year← Reference GHG emission – Project GHG emission

= Reference fuel consumption x Fuel-based emission factor -Project fuel consumption x Fuel-based emission factor

Reference fuel consumption= Diesel fuel consumption based for bus operation x emission factor

of Diesel fuelProject fuel consumption

= CNG fuel consumption for bus operation x emission factor of CNG+ Diesel fuel consumption for bus operation x emission factor ofDiesel fuel


Expected GHG emission reduction

Sites of Project

・Regulator: To reduce the pressure of gas ・Injector: To provide the gas to the engine・Torttle Position Sensor: To adjust the proportion of air and gas according to the order by acceleration pedal・Turbo charge: To provide air more＊The different between Map and Turbo Boost Sensor: It depends on the place to equip

Semarang City

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A freshness preservation reefer container “Hyokan Soko” forms static electric field with high voltage and low current in the chilled container, and enables long storage of foodstuff.Introduction of freshness preservation reefer containers enables to transport foodstuff by searoute that needs long storage, and leads torealize CO2 emission reduction by modal shiftfrom trucks to cargo ships.

Modal Shift from Truck to Cargo Ship with Freshness Preservation Reefer ContainerPP (Japan): Nihon Crant Co., Ltd., O’s&Tec Co., Ltd., PP (Vietnam): Vietnam National Shipping Lines

JCM Model Project（FY2018） Partner Country: Vietnam

10,061 tCO2/yearReference Emission – Project Emission

•Reference Emission= Emission from land transport fuel consumption

•Project Emission= Emission from sea transport fuel consumption+ Emission from land transport fuel consumption

(between the distribution base and the port) + Emission from container electricity consumption


Expected GHG Emission Reductions Sites of Project

Hanoi Hai Phong

Ho Chi Minh Trunk road

Sea route

Appearance of freshness preservation reefer container

How containers work

Electrostatic field

Refrigerator

Aluminum panelElectrostatic field formation system

Modal shift from trucks to cargo ships between Hai Phong and Ho Chi Minh （sea route approx. 1,500km）

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Demonstrate Decarbonizing Technology （FY2019-FY2021）

Target Countries

Outline of Innovation

Demonstration of low-carbon transportation trucks and improvement of logistics efficiency through improvement of fuel economy using Indonesia's Safety Recorder (ISR)Country Coverage: Indonesia

In this project, MHI and its Indonesian subsidiary will jointly develop technology for the Safety Recorder (SR), an in-vehicle device manufactured by Data Tech Co., Ltd., which has a proven track record of improving fuel efficiency and reducing the accident rate through eco-driving in Japan, so that it can meet the local application and price requirements.In addition, by adding a traffic congestion information grasping function and devising tools such as information sharing and traffic planning, we will contribute to lower carbon emissions through further improvements in fuel efficiency and logistics efficiency.In addition, we will establish a system for operation and maintenance at local subsidiaries. If the operation is carried out locally, it will be possible to realize the business of "improving fuel efficiency" and "improving distribution efficiency" in a permanent manner.

Traffic jam area near Jakarta

Demonstrate Decarbonizing Technology （FY2019-FY2021）

A container refrigerator will be developed for a newly developed cooling unit that achieves low temperature, high humidity, and high humidity, and maintains the freshness of vegetables, fruits, and roses for an overwhelmingly long time.-Aiming to build vegetable and fruit cold chains using portable refrigerators in developing countries.

Improvement and Technology Demonstration of the Core "Cooling Unit"On-site assembly and transportation to container refrigerator • Operation demonstration System development capable of remote management and technology demonstration technology needs survey

<Technical renovation points>• Vibration control during transportation• Cost reduction,• Supports hot and humid environments• Power supplies / Communication standards

Target Countries

Targeted at ASEAN region where there are almost no vegetable cold chains and post-harvest losses reach 1/2

Outline of Innovation

Demonstration of High-Humidity Portable Container Refrigerator System for Building Smart Cold Chain for Fruits and Flowers in Developing CountriesCountry Coverage: Philippines, Thailand

Introduction of the “JCM Global Match”

Partner Participant(JCM Partner

countries)

Collaborator Fund Provider

Representative Participant

(Japan)

A Business Matching Platform for the JCM Playershttps://gec.force.com/JCMGlobalMatch/s/

For JCM Overview, visit here: http://gec.jp/jcm/about/

Launched in July 2019Many participants all over the world including Japan and the JCM partner countries have already signed up.

Reformed on December 2nd 2020 with a lot of improvements!

1. Faster registration (takes 1 min only!)2. Search bar to find your partners by names of

technologies or companies3. Useful communication among all participants via

chat rooms4. Opportunity to promote your company by Profile

and Specialties sections5. 1 to 1 Communication by private chat and Email

addresses exchange 6. Reservation of your Scheduled Meetings

*Google Chrome and Firefox are recommended browsers.

Features of the “JCM Global Match”Features of the “JCM Global Match”

https://gec.force.com/JCMGlobalMatch/s/☆Sign it up now from here→

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Thank you for your kind attention

MoEJ will support an introduction of Green Logistics technologies

in ASEAN region through JCM projects

Documents

JCM (Joint Crediting Mechanism) Introduction of