Policy Framework forInternational Carbon
Markets in Jordan
Monday, March 15, 2023

Belal Shqarin, Director of Climate Change
Email: belal.shqarin@moenv.gov.joJordan is leading in the region with the development of needed strategy and the policy
framework• Jordan has participated in the Paris Agreement since 2016.
• However, Jordan has limited participation in the carbon markets so far: Four registered Clean Development Mechanism (CDM)
projects and one voluntary carbon market (VCM) project registered. MoEnv has recently issued a carbon market transaction
authorization letter.
• The private sector interest in participating in carbon markets has increased during the last year in Jordan and UNFCCC has
recently accredited the first Jordanian entity for CDM, the only accredited entity in MENA.
• The Policy Framework that is being developed supports carbon market participation and sets out the elements of how Jordan
will achieve higher ambition in mitigation and adaptation actions through voluntary cooperation with other Parties to the Paris
Agreement.
"Registered"
Projects

Environmental integrity
assessment;
MRV

Project's outline
PDD drafting
PDD Validation

Using the approved
standard"Issued"
Units

Under theapproved
standard

Apply Corresponding Adjustment(CA)

Under theapproved
standard

Registration

Projectlisted inMRVMRV System
Records information on projects

Project starts;
periodic verification; request of issuanceTransacts with otherRegistry

Project listed inthe Registry

GHG National Registry
Records unit/project-level information

Issuance
Option to move to trading
platform for transactions

Trading Platform
Marketplace where assets aretradedJordan already developed the draft policy framework based on the Article 6 Strategy• The policy framework can be finalized based on the feedback from stakeholders during 2023 and could be adopted by 2024.

Country level policy framework

Article 6 strategy

Pricing Strategy• NDC Target prioritization• Understanding potential for carbon
markets and processes to befollowed• Inter-ministerial coordination• Linkages between compliance andvoluntary markets

Infrastructure Strategy

Capacity Building Strategy“They say that I need multiple strategies to prepare the carbon market recipe, so we
invited an expert”

Jordan has also established the needed Infrastructure at country level to support participation
in international carbon markets• The national registry system can now be connected to World Bank supported Climate Action Data Trust (an initiative under theClimate Warehouse) to make the national level carbon market data to international market players, for transparency and for
identification of potential buyers.

4

The structure and content of policy framework considered the needs identified and therole the country would like to play
Contents - Framework
Guidingprinciples• Scope and obligations• Environmental integrity• Sustainable Development• Alignment with Art 6.2 Guidance and CMAGuidance

Framework foreligible
mitigation
outcomeactivities• MO development process, incl eligibility criter• Validation and registration• Monitoring and reporting• Verification and issuance• Eligible entities for independent assessment

Framework forapproval andauthorization• Approval of activities• Activity participants• Authorization for the purposes of Art 6.3 of
the PA

Issuance of
mitigation
outcomes• Prerequisites for creation of MOs• Creation of MOs• Registry and tracking

Corresponding
adjustments• Corresponding adjustments and reporting ofITMOs

DNA,penalties, andappeals• Governance• Penalties• Appeals committee

Schedules - Specifics
1.
2.
3.
4.

Definitions
EI requirements
SD criteria
Eligible activity types and sectoralscopes
5. Eligible methodologies and standards
for ex-ante estimation & the process
for approval of new methodologies
6. MO development process
7. Validation, MRV
8. Requirements for activity participants
9. Issuance
10. Eligibility criteria and/orapproval/accreditation process forindependent entities
11. Authorization requirements
12. Prerequisites for MOs (vintage,metrics, etc.)
13. Registry procedures
14. Reporting procedures
15. Functions of the DNA and relevantministry

Inputs for Schedules••••••WB Approach Papers andassociated discussions withthe Climate Market Club
Experience with pilots,PMR, etc.
National circumstances
Domestic requirements
National climate strategies
Final Article 6.2 GuidanceThe framework allows Jordan to present its preferred approach• Minimum legal foundation to facilitate discussion and agreement between participating Parties
1. Announces preferredapproach through policy
framework (offer)

5. Negotiates and accepts elements
under the policy framework**Jordan

2. Meetsprescribedrequirements,submits
documentation

3a. Clarifies
ownership ofMOs, Grants
Approval if
applicable

Buying Party
6. Recognizes
participants,authorizes
transfer

4. Grants
Approval if
applicable (andneeded)

Letter of Authorization*

3b. Meets
prescribed
requirements,
submits
documentation

7. Recognizes
participants,
agrees topurchase
Activity Participant

Activity Participant*Separate from commercial agreement**Framework prioritizes elements that MUST be established at domestic level (minimum requirements)

The framework considers two possible modes for authorization• Depending on level of comfort, types of activities and their impact on NDCApproval and Authorization

Approval +Authorization
After validation

Approval of Activity
After validation

Authorize Activity ParticipantsOne-step Approval
Any time after validation

Approve Activity + Authorize
specified volume of Mitigation
Outcomes over a specified time
periodAfter validation orverification

Authorize each batch ofMitigation Outcomes
For activities that Jordan decides not to authorize for international transfers, Jordan may still approve these activities under the Article 6.4
mechanism to generate “mitigation contribution Article 6.4 emission reductions”, which may be used for the voluntary carbon market and otherpurposes defined under the Article 6.4 mechanism rules, modalities and procedures.

The authorization criteria would be developed by MoEnv, with relevant technical inputs,
and approved by the National Climate Change Committee• These criteria may include issues such as:a) Project type or technology (i.e., being on a “positive list” or not being on a “negative list”)b) Promoting sustainable developmentc) Ensuring environmental integrityd) Avoiding double countinge) Requirement for independent verificationf) Emission reductions generated in respect of mitigation from 2021 onwardsg) Alignment with relevant national and sectoral policies and strategiesh) Preventing negative social and environmental impactsi) Compliance with anti-corruption laws and conventionsj) Compliance with other local regulatory requirements relevant to the project type (e.g.,environmental impact assessment, technical standards)• The GoJ will also assess and authorize transfers of offsets which are intended to be sold to CORSIA participants.

9Thank youAdditional Slides

Article 6 strategy is expected to help Jordan to make needed decisions at different levels

Decisions for host countries on Article 6 engagement happen on three levels:
Strategic issues for decision on whether to participate: Under what conditions would it be beneficial to participate in Art 6?

• Understanding risks and opportunities: Overselling risks vs Opportunities for additional financing for low carbon development,sustainable development “co-benefits”, technology transfer, and capacity building• Analysis of options to address overselling risks: strategies for choosing sectors, project types, technologies for Article 6; pricing
strategy to ensure sufficient revenue to cover high mitigation costs in the event of overselling; quantity restrictions, etc.

• Explanation on how Article 6 can support the country’s NDC, long-term strategies, and net-zero targets
Tactical issues for decision on how to participate: Possible models for engagement and implementation of Art 6• Identification of the relationship between domestic carbon pricing instruments and Article 6• Use of international and domestic programs and standards• Bilateral vs multilateral cooperation• Creation of a mitigation fund based on Art 6 levies
Operational issues for choices on implementing the various strategic and tactical decisions: to be addressed in individual approach
papersThe policy framework provides a basis for participation by domestic entities andconfidence/trust to market players to enter transactions
Clarifies rights and obligations of Activity Participants for participation in a Cooperative Approach

Party A(Seller)
Policyframework

Paris Rulebook

Party B(Buyer)
Policyframework

Activity
Participants

Activity
Participants

Government agencies, PSUs,
corporate entities, associations,trust bodies

Entities established in Party B**A Party may decide whether to permit applicants established outside its jurisdiction to participate in Mitigation Outcome Activities inthe country.

Details of implementation to be defined through Schedules
Schedules can be customized to meet country requirements
Schedule

Description

References

Functions of DNA/ Relevant Ministry(Schedule 15)

Roles and responsibilities of different entities

Approach paper on country processes andinstitutional framework

Environmental Integrity &Sustainable
Development (Schedules 2 and 3)

Minimum requirements for environmentalintegrity/ demonstrating unit quality

Approach paper on Environmental Integrity,
SDGs, UNFCCC SD Co-Benefits Tool

Eligible Mitigation Outcome Activities(Schedule 4)

Could include positive list of technologies [forautomatic approval]

Country-specific

Eligible Methodologies, MRV,Validation (Schedules 5 and 7)

Party may list eligible methodologies and process Existing internationally reviewed standards andfor developing new methodologies
methodologies may be pre-approved

Mitigation Outcome Development
Process (Schedule 6)

Steps for generating a mitigation outcome

Approach paper on carbon asset development
process

Requirements for Activity Participants,Independent Entities, MOs (Schedules8, 10, 12)

Conditions to be met, accreditation process,vintage/metric of MOs that can be transferred

To be defined at country level

Issuance and Authorization (Schedules
Process for issuance and authorization of MOs
9 and 11)
Registry Procedures (Schedule 13)

How MOs will be created and recorded.
Reconciliation and transfer

Draft Letter of Authorization
Generic registry specifications; lessons learned
from Climate Warehouse simulation

For inquires, please contact
Belal Shqarin,
Director of Climate ChangeMinistry of Environment - Jordan