JCM_CR_RoI_ver03.0

Rules of Implementation for
the Joint Crediting Mechanism (JCM)
The Joint Committee of the JCM, mentioned in “Memorandum of Cooperation on the Low

Carbon Growth between the Japanese side and the Costa Rican side”, hereby establishes therules of implementation for the JCM as follows:A.
1.

Purpose of the JCM

The JCM has the following purposes:(a) To facilitate diffusion of leading low carbon technologies, products, systems,
services, and infrastructure as well as implementation of mitigation actions, andcontributing to sustainable development of the Republic of Costa Rica;(b) To appropriately evaluate contributions to greenhouse gases (hereinafter referred toas “GHG”) emission reductions or removals from Japan in a quantitative manner,
through mitigation actions implemented in the Republic of Costa Rica and use thoseemission reductions or removals to achieve emission reduction targets of thecountries involved;(c)

To contribute to the ultimate objective of the United Nations Framework
Convention on Climate Change (UNFCCC) by facilitating global actions foremission reductions or removals.

ScopeB.
2.

GHG are those gases of carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O),

hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulphur hexafluoride (SF6) and nitrogen
trifluoride (NF3).
3.

Credits are issued based on quantified amount of GHG emission reductions or removals

achieved by the contribution of project participants in the implementation of GHG emission
reductions or removals project activities under the JCM (hereinafter referred to as “JCMprojects”).
4.

The JCM starts its operation as the non-tradable credit type mechanism. The Japaneseside and the Costa Rican side (hereinafter referred to as “both sides”) continue consultation for
the transition to the tradable credit type mechanism and reach a conclusion at the earliest possible
1

JCM_CR_RoI_ver03.0

timing, taking account of implementation of the JCM.
C.
5.

Joint Committee

Both sides establish the Joint Committee which consists of the representatives from bothsides.
6.

The Joint Committee may develop or modify the Rules of Implementation and otherrules and guidelines necessary for the implementation of the JCM, including, but not limited to:(a)rules of procedures of the Joint Committee;(b)guidelines for the development of methodologies;(c)methodologies;(d)guidelines for the designation as a third-party entity;(e)guidelines for the validation;(f)monitoring guidelines;(g)guidelines for the verification of GHG emission reductions or removals;(h)common specifications for registries;(i)forms for project design document (hereinafter referred to as “PDD”), request forregistration of JCM projects, monitoring report, request for verification ofemission reductions or removals, etc.

7.

The Joint Committee decides either to designate the third-party entities or to reject theapplication for designation.
8.

On the basis of a request for registration of JCM projects submitted by project

participants, the Joint Committee decides either to register JCM projects which were validated by
the third-party entities or to reject the request.
9.

On the basis of a request for notification to each side for issuance of credits submitted

by project participants, the Joint Committee decides either to notify both sides to issue the credits
which were verified by the third-party entities or to reject the request for issuance.
10.

The Joint Committee may withdraw a registered JCM project if negative impacts of aproject on sustainable development or human rights in violation of relevant laws and regulations
are identified, and an appropriate corrective action is not taken by project participants.

2JCM_CR_RoI_ver03.0

11.

The Joint Committee develops reports on the status of the implementation of the JCM

and, where necessary, discusses issues related to the operation and management of the JCM.
12.

In conjunction with meetings of the Joint Committee, both sides conduct policy

consultations about the relevant policy measures of the JCM.
13.

The Joint Committee establishes its secretariat for the implementation of the JCM.
D.

14.

Each Side

Each side, based on the rules and guidelines as developed by the Joint Committee and/orin accordance with relevant domestic laws and regulations in respective countries for theimplementation of the JCM:(a)

Prepares draft methodologies and submits them to the Joint Committee;(b)

Establishes and maintains a registry in line with the common specifications forregistries, as developed by the Joint Committee;(c)

On the basis of notification for issuance of credit by the Joint Committee(including for allocation of credits among participants), issues the notified
amount of credits to its registry.

15.

Each side promptly informs the Joint Committee on the issuance of credits under theJCM.
16.

Each side takes necessary measures to ensure transparency in the implementation of theJCM.
17.

Neither side uses any mitigation projects registered under the JCM for the purpose of

any other international climate mitigation mechanisms to avoid double counting.
E.
18.

Third-party Entities

A third-party entity that is designated by the Joint Committee:(a)On the basis of requests from project participants, validates the project as
described in a PDD prepared by the project participants, in line with theguidelines for the validation as developed by the Joint Committee, and informs
the validation result to the project participants;3

JCM_CR_RoI_ver03.0(b)

On the basis of requests from project participants, verifies GHG emission
reductions or removals achieved by the JCM project as described in themonitoring report prepared by the project participants, in line with the guidelines
for the verification of GHG emission reductions or removals as developed by theJoint Committee, records the verification result in a verification report and sends
the report to the project participants.
F.

19.

Project Participants

Project participants:(a)

Prepare a draft methodology and submit the draft to the Joint Committee for its
approval;(b)

Prepare a draft PDD and submit the draft to a third-party entity for validation andnotify the Joint Committee;(c)Submit the PDD that was validated by the third-party entity to the Joint
Committee for its registration of the project;(d)

Implement the JCM project and conduct monitoring in line with the PDD;(e)

Prepare a monitoring report and send the report to a third-party entity forverification;(f)Submit a verification report prepared by the third-party entity to the Joint
Committee, and request notification to each side for issuance of credits under theJCM.
G.

20.

Development of Methodologies

Each side or project participant prepares a draft methodology and submits it to the Joint

Committee. The submitted draft methodology, after its completeness being checked, goes throughpublic inputs process.
21.

The Joint Committee determines either to approve or reject the draft methodology,

taking account of, among other things, inputs received and notifies the result to each side orproject participant, as applicable. The Joint Committee makes publicly available the relevant
information on the approved methodologies through a website.
H.

Designation of Third-party Entities

4

JCM_CR_RoI_ver03.0

22.

Upon receiving an application for designation as a third-party entity submitted by acandidate, the Joint Committee decides either to designate a third-party entity in line with theguidelines for the designation as a third-party entity or to reject the application. If the JointCommittee designates a third-party entity, it makes publicly available the relevant information on
the designated third-party entity through a website.
23.

The Joint Committee may suspend or withdraw the designation of a third-party entity if

it has found fraud, malfeasance or incompetence of the entity.
I.
24.

Validation

Validation is the process of independent evaluation of a proposed JCM project by athird-party entity against the validation guidelines as developed by the Joint Committee on thebasis of the PDD.
25.

Project participants develop a PDD by filling in the form and request a third-party entityto validate the proposed JCM project.
26.

The third-party entity, in line with the guidelines for the validation as developed by theJoint Committee, validates the proposed JCM project as described in the PDD and notifies theresult of the validation to the project participants.
J.
27.

Registration

Registration is the formal acceptance by the Joint Committee of a validated project as aJCM project.
28.

Project participants submit the PDD, which was validated by the third-party entity, tothe Joint Committee and request for registration.
29.

Upon receiving the request for registration from project participants, the Joint

Committee decides either to register the project or reject the request for registration. If the Joint
Committee registers the project, it notifies each side of the registration and makes publicly
available the relevant information on the JCM project through a website.

5

JCM_CR_RoI_ver03.0

K.
30.

Monitoring

Project participants implement a JCM project and monitor GHG emission reductions or

removals by the JCM project based on the PDD.
L.
31.

Verification

Verification is the periodic independent review and ex post determination by a third-party entity of the monitored GHG emissions reductions or removals as a result of a registered
JCM project during the verification period.
32.

Project participants prepare a monitoring report and request a third-party entity forverification.
33.

The third-party entity, in line with the guidelines for the verification of GHG emission

reductions or removals as developed by the Joint Committee, verifies the amount of GHG
emission reductions or removals on the basis of the monitoring report submitted by the project
participants, prepares a verification report and sends the report to the project participants which
requested verification.
M.

Issuance of Credits

34.

Each side establishes a registry to record and use the credits.

35.

Part of the credits is allocated to the project participants from Japan taking into

consideration their contribution to GHG emission reductions or removals through the JCM project.
Actual amount of allocation of credits is consulted and determined by the project participantsfrom Japan and the Republic of Costa Rica among themselves.
36.

The project participants may allocate part of the credits to the respective sides.

37.

Project participants request the Joint Committee to notify each side to issue the creditsto its respective account in the registry on the basis of the verification report with the determinedallocation of the credits among the project participants.
38.

The Joint Committee conducts a completeness check on the request, including for6

JCM_CR_RoI_ver03.0

allocation of the credits among the project participants, and decides either to notify each side of
the result or to reject the request.
39.

The Joint Committee makes publicly available the relevant information on the issuanceof credits through a website.
N.
40.

Use of Credits

Credits issued by each side can be used to achieve emission reduction targets of bothsides.
41.

Each side checks the status of the issuance and use of credits and makes sure that nodouble counting as described in paragraph 16 of credits is discovered.
O.

Others42.
A project which started operation on or after 1 January 2013 is eligible forconsideration as the JCM project.
43.

The JCM covers the period for verified emission reductions or removals from themitigation projects under the JCM to be made until 2030. Both sides consider possible extensionof the above-mentioned period and reach a conclusion by 2030.

7