the japan- mongolia cooperation on the joint crediting mechanism

Kazuhisa KoakutsuLeader, Climate and Energy AreaInstitute for Global Environmental Strategies (IGES)

The Japan-Mongolia Cooperation on the Joint Crediting Mechanismand Recommendations for Mongolian Enterprises

2Institute for Global Environmental Strategies

IGES conducts practical and solution-oriented research focusing on the Asia-Pacific region to develop innovativepolicy approaches and proposeenvironmental policies to achievesustainable development in the region.

IGES Climate and Energy Areaconducts strategic research activitiesto contribute to global efforts tocombat climate change, covering:• Future climate regime• Sustainable energy • Climate mitigation• Climate finance• Asia low carbon strategy• Market mechanisms,

including CDM and JCM


The Joint Crediting Mechanism (JCM) Cooperation between Government of Japan and Mongolia

Facilitates greenhouse gas emissions reduction/removal projects bycompanies, cities, etc. in MongoliaAs a result of emission reductions, “JCM credits” will be utilized to achieveJapan’s emission reduction target and may be utilized to achieveMongolia’s target.At present, JCM credits are not tradable.JCM Financial Support from Japanese government is available.

Utilized in partner country

accordingly

Creditsto Japan

Creditsto partner

country

corresponding

Used to achieve Japan’s emission reduction target

JCM Credits

dividing

Partnercountry’s

share

JCM projectJCM Financial

Support Scheme

“Contribution”

Japan Partner country (e.g. Mongolia)


JCM established in 16 countries since 2013

JCM in Mongolia started from January 8h, 2013JCM Mongolia secretariat: Ministry of Environment and Tourism

http://www.jcm-mongolia.com/


15 projects already registered by governmentsCountry Technology Type Location

Mongolia Heat Only Boilers 118th School of Ulaanbaatar

Mongolia Heat Only Boilers Bornuur soum publicfacilities

Indonesia Cooling system(refrigerator, freezer)

Frozen Food Processing Plant

Indonesia Cooling system(refrigerator, freezer)

Food Industry Cold Storage

Indonesia Centrifugal Chiller Textile factoryIndonesia Centrifugal Chiller Textile factoryIndonesia Centrifugal Chiller Textile factory

Indonesia AC System, LED Lighting, Fridge/Freezer Convenience store

Vietnam Tachograph Trucks, trailers

Vietnam Inverter-type room air conditioners Hospitals

Vietnam Amorphous transformers Electricity grid

Vietnam Boiler, heat pump, LED lighting Hotel

Palau Small-scale Solar PV School rooftopPalau Small-scale Solar PV Building rooftopPalau Small-scale Solar PV Building rooftop

JCM credits issuedto Japanese and Indonesian side

https://www.jcm.go.jp/projects/registers

Japan: Suuri-KeikakuMongolia: Anu-Service

https://www.jcm.go.jp/projects/registers


97 projects already selected for financing, various technologies are implemented

High Efficiency LED Lighting, Cambodia

High-efficiency Heat Only Boilers, Mongolia

Power Generation by Waste-heat Recovery in Cement Industry, Indonesia

Double Bundle-type Heat Pump, Indonesia

Energy Savings at Convenience Stores, Indonesia

10 MW Solar Power Project in Darkhan City, Mongolia

JCM project list: http://gec.jp/jcm/projects/index.html

Amorphous High Efficiency Transformers in Power Grids, Vietnam

LED lighting, co-generation, waste management, water management,hydropower, transportation, biomass, forestry, etc.

5 projects selected in Mongolia:

Solar PV (3)Boiler (2)

http://gec.jp/jcm/projects/index.html


• Finances up to the half of an investment cost for facilities, equipment, vehicles, etc. which reduce CO2 from fossil fuel combustion.

• Includes projects in collaboration with JICA and other government-affiliated financial institute.

JCM Model Project

• Finances part of project cost for REDD+ projects.• At least half or ratio of financial support to project

cost of JCM credits issued are expected to be delivered to the government of Japan except the amount which is allocated to the partner country based on its legislation.

JCM REDD+ Model Project

• Grant for incremental cost of technologies for projects under public and state-owned entities.

• Interest subsidy to ADB-financed loans for non-government projects, to private sector borrowers and financial institutions.

ADB Trust Fund (Japan Fund for

JCM)

JCM Financing Programme

Mongolian companies can jointly propose projects with Japanese companies

ADB: https://www.adb.org/site/funds/funds/[email protected]

https://www.adb.org/site/funds/funds/japan-fund-for-joint-crediting-mechanism

mailto:[email protected]


Application is Now Open for JCM Model Project and REDD+ Model Project Financing

Starting date of call for request 5 September 2016

Deadline of application Friday, 2 December 2016 (12:00 JST)

Announcement of selected Model Projects 1- 2 months after the deadline

Apply: http://gec.jp/jcm/kobo/mp160905.html

Sample of required documents:• Application Form• Declaration by Representative Participant • Project Implementation Plan• Project Idea Note• Budget • Company information (e.g. brochure) and certificate of incorporation• Audited financial statements• Draft international consortium agreement• Agreement on the Allocation of JCM Credits• Other supporting documents

http://gec.jp/jcm/kobo/mp160905.html


Criteria for selecting the JCM Model Project


Robustness of the project implementation 40 points

Amount of emission reductions of energy-related CO2and cost-effectiveness of emission reductions (JPY/tCO2)

40 points

Potential of the dissemination of the technology 10 points

Concept and status of JCM methodology development 10 points

• Projects installations start after the adoption of the funding and mustbe completed within 3 years.

• Finance will be paid based on the verified cost actually spent forimplementation of the project.



Financial support for JCM Model Project

Number of already selected projects using a similar technology in each partner country

% of financial support for new project application

No project (0) Up to 50% (determined by participants)1-3 projects Up to 40% (determined by participants)More than 3 projects Up to 30% (determined by participants)

Covers main construction, ancillary work, machinery andappliances, survey and test, facilities, administrative work, etc.

In Mongolia, new solar PV and boiler projects will be eligible for up to 40% of financialsupport. Other technologies will be eligible for up to 50% of financial support.

Maximum Percentage of Financial Support determined based on thenumber of already selected JCM Model Projects using a similar technologyin each country.


Develop business idea

Find Japanese partner

Develop consortium (joint venture etc.)

Apply JCM financing programme and develop methodology

Sample document of “Agreement on International Consortium (Example)”

Recommended steps to develop JCM projects

• Secure financial sources for the rest of initial cost• Consult about project with JCM Mongolia secretariat

• Work with Business Council Mongolia and IGESon business matchmaking and project development

• Business forums, trade associations, websites e.g. http://ibo.jcci.or.jp/

Japanese entity submits application (in Japanese)

http://ibo.jcci.or.jp/


1212

Thank You

IGES Climate and Energy AreaMarket Mechanisms

2108-11 Kamiyamaguchi, Hayama, Kanagawa, 240-0115 JapanTel: +81-46-826-9592Fax: +81-46-855-3809E-mail: [email protected]

JCM Mongolia secretariathttp://www.jcm-mongolia.com/

mailto:[email protected]


Company matching

Application to JCM Financing

ProgrammeMethodology development

PDD development

Measurement, reporting and

verificationCredit

Issuance

Validation

(by TPE)

Creation of International Consortium(for JCM Model Projects)

Technical support from MOEJ, IGES, the host country JCM Secretariat and (optional) a consultant

Verification

(by TPE)

Overview of JCM Project Development

Project approval,start of funding and operations

Methodology approval (by the Joint Committee)

JCM Project registration (by the Joint Committee)

Validation report

Verification report

Before project beginningFrom project beginning to official registration as JCM projectContinuous measurement, reporting and verification of GHG emissions for credit issuance

Monitoring report*

By project participants

*Support for monitoring report first time only

Technical support from OECC and IGES


14Percentage of Financial Support: White: 0 project = Up to 50% | Yellow: 1-3 project(s) = Up to 40% |Orange: more than 4 projects = Up to 30%

YellowOrange

Sector TechnologyMongolia

Bangladesh

Ethiopia Kenya Maldiv

esViet Nam

Lao PDR

Indonesia

Costa Rica Palau Camb

odiaMexic

oSaudi

Arabia Chile Myanmar

Thailand

Malaysia Total

Energy efficiency

Boiler 1 2 2 5Regenerative Burners 1 1Gas Fired Furnace 1 1Electric Furnace 1 1Air Conditioning System 2 1 1 4Chiller 2 1 4 1 1 3 12Refrigerator 1 1 3 5Absorption Chiller Using Waste Heat 1 1 2Swirling Induction Type Air conditioning System 1 1Air Conditioning Control System 1 1 2Heat Pump 1 1 2Fridge and Freezer Showcase 1 1 2Compressor 1 1Loom 1 2 1 4Old Corrugated Cartons Process 1 1Battery Case Forming Device 1 1Electrolyzer in Chlorine Production 1 1 2Transformer 3 3LED lighting 2 1 3LED Street Lighting with Dimming System 1 1 2Pump 1 1Aeration System 1 1Water Heater Using Exhaust Heat 1 1Exhaust Heat Recovery 1 1Wire Stranding Machines 1 1Evaporator with Mechanical VaporRecompression 1 1

Energyindustries (renewable-/non renewablesources)

Solar Power Plant 3 2 1 1 1 1 1 3 3 3 1 20Solar Power Plant with Battery 1 1 2Small Hydropower Plan 1 1 2Power Generation by Waste Heat Recovery 1 1 1 3Gas Co-generation 1 2 3Biomass Co-generation 1 1

Waste handlingand disposal

Waste to Energy Plant 1 1Power Generation by MethaneRecovery 1 1

Transportation Digital Tachograph System 1 14 6 1 3 1 16 0 24 3 3 5 1 1 0 5 21 1 95

Maximum percentage of financial support by applied technology type and number of JCM model project by each country 29/08/2016