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
Basic Concept of JCM 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. JAPAN Used to achieve Japan s emission reduction target Leading low carbon technologies, etc, and implementation of mitigation actions MRV Methodologies will be developed by the Joint Committee Credits Host Country JCM Projects MRV GHG emission reductions/ removals 1
Countries with which Japan has signed on bilateral documents 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. 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) Lao PDR Aug. 7, 2013 (Vientiane) 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) Japan held Joint Committee meetings with Mongolia, Bangladesh, Ethiopia, Kenya, Maldives, Viet Nam, Lao PDR, Indonesia and Palau respectively. 2
FY 2014 JCM-related Projects of MOEJ JCM Project Flow Projects Project formation F/S support projects (Increase) JCM Large-scale project development (JPY 1.6 billion) JCM development and implementation projects (JPY 2 billion) Project development Project implementation Acquire credits Financed projects (Increase) Financing programme for JCM projects (JPY 1.2 billion, JPY 3.6 billion over 3years) Small-scale projects (several tens of millions to several hundreds of millions) (New) Cooperation fund with JICA (New) ADB Trust Fund (JPY 4.2 billion) Infrastructure (PPP projects, JICA overseas investment projects) (several billion to over 10 billion) (JPY 1.8 billion) Infrastructure (ADB pipeline projects) (several billion to over 10 billion) 3
Large-Scale JCM Feasibility Studies in 2014 by MOEJ Selected 採択案件一覧 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) 1 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) 17 18 13 19 16 7 8 9 10 11 6 14 12 9 15 5 3 2 4 See pamphlet for more details. 4
Achievements & Challenges (1) (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. 5
(Reference) Financing Programme for JCM Projects by MOEJ The budget for FY 2014 1.2 billion JPY (approx. USD12 million) per year by FY2016 (total 3.6 billion JPY) Finance up to a maximum of 50% of initial investment costs Government of Japan FY 2014 budget: JPY 1.2 billion (JPY 3.6 billion over 3 years) Measure GHG emissions through MRV. Delivery of JCM credits (partial or fully) to Japanese government after issue. International consortiums (includes private Japanese entities) Target group International consortiums (including private entities from Japan) Scope of financing Projects which introduce facilities and equipment to reduce CO2 emissions from energy sources (includes costs for construction, installation, administration, etc.) Project implementation period Three years maximum Eligible projects 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. 6
Projects adopted in the Financing Programme for JCM Projects in 2014 7 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. 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.
New Support Program Enabling Leapfrog Development (Fund) 平成 FY 252014 年度予算 budget: JPY 百万円 4.2 billion Fund established April 22, 2014. Call for proposals from April 25, 2014. Background & Purpose 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. Project Overview 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. Illustration Financial assistance/financial investments for overseas investment and lending JICA, other Supported Project by JICA, etc. MOEJ Subsidy Collaboration Fund for expansion of low-carbon technologies Financial Support, other JCM Project Collaboration GHG reductions Waste to Energy Plant Renewable Energies Water Supply and Sewage Systems Transportation 8
New Support Program Enabling Leapfrog Development (ADB) 平成 FY 252014 年度予算 budget: JPY 百万円 1.8 billion Conclusion of MoU between MOEJ and ADB on June 25, 2014. Background & Purpose 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. Project Overview 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. Illustration GHG reductions Current ADB projects ADB fund Mitigation using common technology (Selected from pipeline projects of ADB) Additional cost to introduce advanced technology Trust Fund Additional costs are reduced as the cost is covered by funding from Japan. This financing scheme enables high-cost, advanced technologies to be adopted. 9
Achievements & Challenges (2) (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. 10
Future Outlook 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 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 Towards the creation of a win-win relationship 11
Thank you for your kind attention. 12