JCM Methodology Guidebook

Table of Contents
1. Introduction (Background and Purpose) ________________ 4
2. What Is Methodology in JCM? _________________________ 5
2.1 Objective and Definition of JCM Methodology ___________________________________ 5
2.2 Importance of JCM Methodology (JCM Project Cycle) ______________________________ 5
2.3 Features of JCM Methodology ______________________________________________ 6
2.3.1 Main Features __________________________________________________________ 6
2.3.2 Reference Emissions and Conservativeness (Environmental Integrity) _______________ 6

3. Approval Process for JCM Methodology ________________ 10
3.1 Application of an Existing Methodology (②a in fig. 3.1) ____________________________ 10
3.2 Development and Approval Process for a New Methodology (②b in fig. 3.1) ______________ 11

4. Development of JCM Methodology ____________________ 14
4.1 Structure of JCM Methodology _____________________________________________ 14
4.1.1 Main Text _____________________________________________________________ 14
4.1.2 Spreadsheet __________________________________________________________ 16
4.1.3 Additional Information___________________________________________________ 17
4.2 Points to Note in Developing a Methodology ___________________________________ 18
4.2.1 Throughout the Methodology Development Process ____________________________ 18
4.2.2 Key Items ____________________________________________________________ 18
4.2.3 Confirmation by Project proponents ________________________________________ 19

5. After Approval of JCM Methodology ___________________ 20

1

Glossary and Abbreviations
JCM

Abbreviation for the Joint Crediting Mechanism
Country that signed the bilateral agreement on implementation of JCM.

Partner country

17 countries as of February 2021: Mongolia, Bangladesh, Ethiopia, Kenya,
Maldives, Vietnam, Laos, Indonesia, Costa Rica, Palau, Cambodia, Mexico, Saudi
Arabia, Chile, Myanmar, Thailand, and the Philippines.
Committee composed of representatives from Japan and its partner countries.

Joint Committee (JC)Responsiblefor

adoptingtheregulations,guidelines,

etc.

necessaryfor

implementation of JCM, approving proposed methodologies, registering projects,
and notifying relevant countries of the quantity of JCM credits issued.
JCM-related ministries and agencies of the Japanese government are the MinistryJCM-relatedof the Environment; the Ministry of Economy, Trade and Industry; the Ministry ofministries andForeign Affairs; and the Forestry Agency. Methodology development is discussed

agencies (Japan)

with the Ministry of the Environment and the Ministry of Economy, Trade andIndustry.
Secretariat of the Joint Committee. Responsible for receiving various documents

JCM Secretariat

submitted, checking the information in documents, and announcing and handling
public comments.

Counterpart
government official

The secretariat of a partner country and officials from ministries and agencies
related to the content or field of proposed methodologies (e.g., supervising agencyof relevant laws and regulations)
Organization that supports the smooth implementation of the JCM Project Cycle

Supportingorganization

entrusted by the Ministry of the Environment of Japan. In particular, responsible
for supporting the management and implementation of Financing Programme for
JCM Model Projects, methodology development, and the preparation andverification of project design documents.

Third-party entity,

Organization that checks the validity of projects and verifies the emission reduction

verificationand sequestration of greenhouse gases.

organization
Project

Meaning a project that is applied for, and adopted as, a Financing Programme for
JCM Model Projects

project (excluding chapter 2)

Project proponent

Representative business operator and joint business operator in a JCM project

Environmental

Cautions should be taken not to excessively reduce emissions due to a conservative

integrity

calculation method or increase global emissions. *No official definition exists.

Conservative/

Meaning that numerical values used are consciously set so that a net emission

conservativenessreduction is ensured or excessive emission reduction is avoided.

Proposedmethodology (PM)Methodology developed that has not yet been approved and that was submitted(or will be submitted) to the Joint Committee of the counterpart country for
approval.

Approved

Methodology developed that was submitted to, and approved by, the Joint

methodology (AM)Committee.

2Terms Related to Emissions *See 2.3.2 of the main text for details.
BaU (business as

GHG emissions that are assumed if no JCM project is implemented. BaU is anusual) emissions

abbreviation for Business as Usual.
GHG emissions calculated on the assumption that the current initiatives for lower

Reference emissions

environmental loads (the degree of using low environmentally friendly products),
etc. in the relevant field of the counterpart country will continue or expand, i.e.,
given that GHG emissions will remain lower than maintaining the status quo.

Project emissions
Net emission

GHG emissions that are produced when project activities are conducted using theequipment and facilities newly introduced in a JCM project.
Difference between reference emissions and BaU (business as usual) emissions.

reduction*All information above is as of February 2021.

3

1.

Introduction (Background and Purpose)

The COVID-19 pandemic inflicted heavy damage on our society and economy in 2020. In the field of
climate change, the 26th UN Climate Change Conference (COP26), which had been planned to beheld in Glasgow, United Kingdom, in November 2020, was postponed for a year, thereby also affecting
the preparation for the Paris Agreement agreed in 2015. While various initiatives are taking placethroughout the world for recovery from the pandemic, on the other hand, the “Green Recovery”
movement has also been spreading, mainly in the EU. This is an approach of addressing environmental
issues and economic recovery in parallel for a post-COVID-19 world, which is also expected to achieve
faster implementation of climate change measures in the future. One of the climate change measures
is carbon market mechanisms, which are stipulated in the Paris Agreement and are expected to be
used widely. Japan started the Joint Crediting Mechanism (JCM) in 2013 as its original approach. JCM
is a system used to achieve the reduction targets of Japan. This is done by introducing our excellent
technologies, such as low-carbon technologies and products, throughout developing countries,
promoting the implementation of climate change measures, and making quantitative evaluation ofJapanʼs contribution to GHG reduction and sequestration resulting from such efforts.
The first thing to be defined in the JCM Project Cycle is methodology. Methodology is a document
serving as a foundation to clarify the scope covered by the project to be implemented andappropriately calculate the produced emission reduction for acquiring credits. This Guidebook outlines
the concept of developing the methodology, the entire cycle, and the procedures for implementation.
Considerations were given when creating this Guidebook so that the content is easily comprehensible
for those who wish to apply for a project of the Financing Programme for JCM Model Projects(representative business operator candidates, etc.), those who applied for a project and obtained
approval, and all other project proponents (business operators) who will use the JCM system andconduct their business. Methodology itself is developed mainly by supporting organizations, while
project proponents (business operators) play a main role in running the business. Please use thisGuidebook to understand the mechanism of the methodology and make your business operations
even smoother.
*“Readerʼs guide” is available at the bottom of the page for your reference.
*The procedures for crediting GHG emission reductions (JCM Project Cycle) are defined separately from the cycle for Financing
Programme for JCM Model Projects for each introduced technology explained in this Guideline.

4

2.

What Is Methodology in JCM?

2.1 Objective and Definition of JCM Methodology
As stated above, JCM is a system
intended to use the initiatives for GHG
reduction by the partner countries
supported by Japan to achieve our
reduction
targets.
Therefore,
thereductions need to be recognized by theinternational community. Even in termsof contribution to global GHG reductions,
it is important for the reductions to berecognized and approved internationallyas GHG reduction credits that will be
distributed and transacted beyond theframework of countries and regions in
the future. To do so, the methods andprocedures regarding implementationneed to be established as a methodology
based on a scientific basis, etc., andannounced expressly beforehand. In
other words, the methodology in JCM isstated in a document that logically and
Figure 2.1. JCM Project Cycle
expressly stipulates the approaches ofdefining the terms necessary for the introduction and operation of each technology to be introduced,
determining the eligible criteria, and using the methods of calculating GHG reductions in order toquantify the GHG reductions after introduction of the technology in JCM, enable the reductions to betransacted internationally as reduction credits, and allow third parties to carry out a similar project ina highly reproducible and consistent manner. The systems, which allow GHG reduction credits in othercountries to be transacted on the market, have different names, while most of the systems stipulate
items similar to those in the JCM methodology.

2.2 Importance of JCM Methodology (JCM Project Cycle)
The cycle (procedures) for crediting GHG emission reduction is defined separately from the cycle forFinancing Programme for JCM Model Projects for each introduced technology (see the chart at right1).
The first process of the procedures is to develop the methodology as indicated in this Guidebook. As
shown in this chart outline, the methodology is a document serving as a foundation for JCM that is
prepared prior to reduction activities. This document indicates the reduction technologies and themethods of calculating emission reductions in order to demonstrate the validity and effectiveness of
the reduction activities, so that GHG emission reduction after introducing technologies can berecognized internationally.

1

See the Global Environment Centre (GEC) website (http://gec.jp/jcm/jp/about/).

5

2.3 Features of JCM Methodology
2.3.1 Main Features
JCM methodology was designed based on existing Clean Development Mechanisms (hereinafter CDM),
etc., and has the following main features:
JCM methodology is easy to use for project proponents and designed to allow

Usability

the third party entities to easily verify the data.

Eligible Criteria

The eligible criteria, clearly defined in the methodology, reduce the risk thatthe project proposed by the project proponent is rejected.
Default values specific to countries and sectors are already available in theDatamethodology, which gives project members access to data necessary forcalculating GHG emission reduction/sequestration.

Simple Calculation

Inputting values necessary for created spreadsheets automatically calculates
GHG emission reduction/sequestration in accordance with the methodology.
In JCM, emission reduction attributable to projects is calculated in aConservativenessconservative manner to ensure the GHG net emission reduction of the partnercountries. The calculation outline and net emission reduction are explained in
the next section.

2.3.2 Reference Emissions and Conservativeness (Environmental Integrity)2
In many cases where equipment and facilities with low GHG emissions are introduced, and the GHG
emission reduction is calculated to identify the effectiveness (e.g., CDM), the emission reduction is
calculated by figuring out the difference between BaU (business as usual) emissions, where the project
is not implemented, and project emissions, where the project is implemented.
Emission reduction = BaU (business as usual) emissions － Project emissions
On the other hand, the emission reduction in JCM projects is defined as the difference between
reference emissions and project emissions, instead of BaU (business as usual) emissions.
Emission reduction in JCM = Reference emissions － Project emissions
In JCM projects, new equipment and facilities with clear specifications are introduced in all projects,
and the emissions attributable to their use are treated as project emissions, thereby making it possible
to mostly calculate the emissions accurately. Thus, the emission reduction attributable to project
implementation is greatly affected by the emissions in which the calculated project is not implemented(BaU [business as usual] emissions). In JCM aiming for activities that take environmental integrity
into consideration, on the other hand, the BaU (business as usual) emissions are set moreconservatively (underestimating the volume), and this is used as reference emissions.3

2

The term “environmental integrity” is not clearly defined by UNFCCC, etc. (as of February 2021). JCM defines

environmental integrity as a concept that cautions should be taken not to excessively reduce emissions due to a conservative
calculation method or cause extra environmental loads in all environmental aspects.
3

Programs using other market mechanisms may use different names, e.g. baseline (emissions) in CDM.

6

（１）

BaU (business as usual) emissions

GHG emissions that are assumed if no JCM project is implemented. In particular, BaU is calculated as
GHG emissions that are assumed when the equipment and facilities that are generally used in the fieldcontinue to be used (maintaining the status quo) at the time of project start.

（２）

Reference emissions

Based on the current initiatives to reduce environmental loads by counterpart countries in that field(the degree of using environmentally friendly products), GHG emissions are calculated on theassumption that the reduction initiatives continue or expand, i.e., given that GHG emissions will remain
lower than maintaining the status quo. For this reason, reference emissions are lower than BaU(business as usual) emissions.

（３）

Project emissions

GHG emissions that are produced when project activities are conducted using the equipment andfacilities newly introduced in a JCM project (e.g., power consumption required to operate a boiler, fuelconsumption for material transportation, etc.). In calculating project emissions, using conservative
default values as parameters for calculation instead of actual measured values can make a calculation
so that the emissions are greater than the actual project emissions. Doing so makes the reference
emissions lower (more conservative) and also serves as a method of ensuring net emission reductionin the same way as the reference emissions above. This also decreases the number of items to be
assumed, thereby leading to lower loads on monitoring activities.

Figure 2.2. GHG emission reduction

7

（４）

Net emission reduction

Difference between BaU (business as usual) emissions and reference emissions is called net emission
reduction. Setting reference emissions so that net emission reduction can be ensured verifies thesubstantive reduction of GHG emissions in JCM projects (see the column on the next page for details).
In JCM, as explained above, emission reduction is conservatively calculated while paying attention toensuring sufficient net emission reduction; consequently, there are many cases where the emission
reduction is lower than originally expected in projects, resulting in fewer credits that can be acquired.
Project proponents who will participate in JCM are advised to fully understand this. The detailed
methods of calculating emission reduction will be explained at the stage of application for a project.
Supporting organizations will explain about the methods again at the stage of methodology
development after your proposal is adopted as a project of Financing Programme for JCM Model
Projects; they will also support project proponents in developing their methodology in more detail.
*See the Guidebook (Collection of Cases) for specific cases of calculating reference emissions.

SummaryIn order for JCM to be recognized internationally as GHG reduction credits, themethods and procedures regarding implementation need to be established as amethodology based on a scientific basis, etc. and announced expressly
beforehand.



The JCM Project Cycle is designed to calculate emission credits, separately fromthe procedures for Financing Programme for JCM Model Projects.



Methodology development is the first step to the JCM Project Cycle.

Emission reduction in JCM is calculated by subtracting project emissions fromreference emissions.



In JCM that sees the securing of net emission reduction as important, the key
point is to calculate reference emissions that conservatively figure out
emissions.

8Column̶ Net Emission Reduction
JCM performed in accordance with the requirements in Article 6 of the Paris Agreement isdesigned to ensure net emission reduction in order to make sure of environmental integrity
defined in the decision. Net emission reduction is a concept that does not credit reduction
from BaU (business as usual) emissions (CDM is based on this concept), but credits lower
reduction than that to ensure substantive emission reduction. This is because, if reduction
from BaU (business as usual) emissions is issued as credits, emitters who acquired thecredits actually produce GHG emissions equivalent to that amount by using the credits, which
does not contribute to reduction on a global scale (see the figure at upper part). In JCM, thedifference between conservatively set reference emissions and project emissions is credited
to ensure net emission reduction that is substantive GHG emission reduction. This effort is
expected to achieve lower GHG emissions on a global scale (see the chart below).

9

3.

Approval Process for JCM Methodology

This chapter discusses the development and approval process of JCM methodology. Descriptions ofeach item in JCM methodology are stated in chapter 4. As explained in the Project Cycle section in
2.2, a methodology to be applied needs to be established first before starting a project. The approachis either to apply an existing methodology or develop a new methodology, and the details of
preparation vary depending on the approach (see the chart below).

Figure 3.1. Flow chart to determine whether a new methodology needs to be developed①

If an applicable methodology already exists, the supporting organization asks the project
proponent whether the methodology can be employed. The project proponent examines thedetails of the applicable methodology and determines whether it can be utilized.

②

There are two types of approaches based on the examination results above.
a） If an existing methodology can be used, a new methodology does not need to be developed.
Move on to the preparation process of creating a Project Design Document (PDD) with theassistance of the supporting organization (see 3.1 for details).
b） If an existing methodology cannot be used, a new methodology needs to be developed. The
supporting organization plays a leading role in developing a new methodology based on ahearing with the project proponent (see 3.2 for details).

3.1 Application of an Existing Methodology (②a in fig. 3.1)
If an applicable methodology exists between Japan and the counterpart country where the project is
to be implemented, and if it can be used, the eligible criteria of the methodology and other details are
confirmed again. If the methodology is judged as applicable, a new methodology is not developed
after making a report thereof to the Ministry of the Environment. Then, the project proponent moves
on to the preparation for creating a Project Design Document (PDD), which is the next process in the
JCM Project Cycle. All the procedures will be instructed by the supporting organization, so the project
proponent should proceed with the project in accordance with their instructions.

10

3.2 Development and Approval Process for a New Methodology (②b in fig. 3.1)
If no approved methodologies exist, a new methodology needs to be developed. In this case, theproject proponent and the supporting organization work together to develop a new methodology inaccordance with the sequence indicated below. Specifically, the supporting organization drafts amethodology, while the project proponent provides necessary information, coordinates with local
stakeholders, and gives technical advice. It will take several months to a year from the start ofdevelopment to approval (see chapter 5 for the handling procedures after the methodology isapproved).
The procedures of JCM projects and the JCM Project Cycle, including methodology development, arealigned with each other while they are implemented in parallel as different processes. Thus, the project
proponent should keep the following points in mind when carrying out the activities:
 Share with the supporting organization the progress of the project Provide the supporting organization with necessary information and technical advice
 Communicate sufficiently with joint business operators and the supporting organization (see theboxes below for details)(Hereinafter, items with ✔ mark mean those that project proponents are expected to actively
participate in)(1)

Hold a kickoff meeting (✔)

Before starting to develop a methodology, the project
proponent and the supporting organization hold a kickoff
meeting first. In the meeting, the supporting organization
leads the confirmation of the entire schedule and proceduresfor the methodology development and the hearing of thebusiness content for the methodology development. The
hearing is conducted mainly to confirm the specifications
and installation plan of the facilities, equipment, etc.
necessary to calculate emission reduction, as well as thestakeholders, etc. who will be affected by the project
implementation. Project proponents may be requested tosubmit relevant information and documents, including theinformation submitted when they applied for the JCM
project; thus, they are advised to prepare the materials in
advance.
(2)

Draft a methodology

The supporting organization drafts a methodology based on
the results of the meeting above. In the development
process, the supporting organization requests the project
proponent to provide information and technical assistance if
needed, so that both parties can work together to develop amethodology. The development phase may take several
11

Figure 3.2. Development and approval processmonths; thus, the progress of the project is shared with each other on an as-needed basis to avoid asignificant gap between the methodology development phase and the process of equipment
installation or facility construction (see chapter 4 for details).
(3)

Confirm the draft methodology (✔)

The project proponent confirms the methodology drafted by the supporting organization and reviews
it from a technical perspective based on the local situation to provide feedback. After the confirmation,
the draft methodology is submitted to government officials of Japan and the counterpart country to
ask them to check it and provide comments. Then, the project proponent and the supportingorganization work together to fully reexamine the content of the draft methodology, the adequacy ofthe logical composition, and the provision of sufficient necessary information. For this reason, thedraft methodology may need to be checked and modified several times (see 4.2.3 for details).
(4)

Confirm the draft methodology by the Japanese government

JCM-related ministries and agencies of Japan check the draft methodology. Request for confirmationand modification of the draft methodology or submission of data, if any, is handled mainly by the
project proponent and the supporting organization. Upon approval of the relevant ministries andagencies after this confirmation process, the draft methodology of Japan is confirmed.
(5)

Hold a conference on the draft methodology by relevant countries

The supporting organization explains the draft methodology to the JCM Secretariat of the counterpart
country and holds a conference on the details. As necessary, the supporting organization sets themeeting venue for explanation of the draft methodology and exchange of opinions. The project
proponent is not required to participate in the meeting, but may need to submit additional data, etc.
in the same way as the confirmation phase in (4) above. After the conference of the relevant countries,
the proposed methodology is finalized.
(6)

Submit the draft methodology (✔)

The project proponent sends the finalized draft methodology via email to the JCM Secretariat of thecounterpart country. The supporting organization can also submit it on behalf of the project
proponent; thus, the party that will submit the draft methodology is determined through discussion
between the project proponent and the supporting organization. The submitterʼs company ororganization name will be included in the proposed methodology, and they also need to handle
administrative procedures, including several contacts with the JCM Secretariat; the project proponent
is responsible for the handling process, according to the situation. Handling the procedures anddrafting necessary documents are assisted by the supporting organization.
(7)

Solicit public comments

The submitted draft methodology is checked by the JCM Secretariat and then published on the JCM
website4 as a proposed methodology (PM) for 15 days to solicit public comments. Comments provided
during the 15-day period to accept public comments are handled mainly by the JCM Secretariat ofJapan, the supporting organization, and the project proponent.
4

JCM website (https://www.jcm.go.jp/).

12

(8)

Deliberate on, and approve, the methodology

After the public comment period ends and comments are handled as needed, the proposed
methodology is approved upon deliberation of the Joint Committee. The Joint Committee is held on
an irregular basis since it is also responsible for deliberating on other items of the JCM Project Cycle.
The methodology that has been approved is published on the JCM website as an approved
methodology (AM) for public. This approved methodology will be used as the procedures for the JCM
Project Cycle after the methodology development. Approved methodology is updated, whenevernecessary, according to changes in the counterpart countryʼs market and technical trends (see chapter
5 for details).

Sufficient Communications with the Supporting Organization
Good communication between the project proponent and the supporting organization is the
key to facilitating the entire process from (1) to (8) above. The supporting organization plays
a leading role in moving the entire process forward, not limited to methodology, while the main
actor of the project is the project proponent. We would like to ask your cooperation for making
project management better through active communication and participation in the project,such as by sharing information and opinions between both parties and preparing materials
based on the roles assigned to them.

SummaryPrior to methodology development, existing methodologies need to be checked
to find whether they can be used.



If a new methodology needs to be developed, the supporting organization leads
the process and works with the project proponent to develop it.

Since the project proponent is also a member of team who develops the new
methodology, their voluntary and active participation makes it possible todevelop a high quality methodology.



The methodology development process requires meticulous work and takes
several months to a year to complete. Therefore, the key to facilitating theprocess is sufficient communication among stakeholders, including information
sharing and active exchange of opinions.

13

4.

Development of JCM Methodology

4.1 Structure of JCM Methodology
JCM methodology has two types of methodology documents̶proposed methodology and approved
methodology̶according to the phase of the development and approval process as described above.
Basically, it is composed of ① the main text of methodology, ② a spreadsheet, and ③ additional
information.
① Main text of methodology
The main text of methodology contains the name of the subjects covered by the methodology, thedefinition of terms, the eligible criteria, the formulas of calculating GHG emission reduction, and otherrelevant information. The main text is written in English.
② Spreadsheet
The names vary depending on the phases and objectives. The Proposed Methodology Spreadsheet(PMS) is used for applied methodology, while approved methodology is composed of the Monitoring
Plan Sheet (MPS) and the Monitoring Record Sheet (MRS).
③ Additional information
This is attached only to proposed methodology and contains the grounds for numerical values used in
the methodology, the background to the use, and other important information that supplements andcomplements the methodology but is not suitable to be included in the main text.

4.1.1 Main Text
Cover sheet of the Proposed Methodology Form
A cover sheet is attached to the proposed methodology. The cover sheet should contain the name ofthe partner country, the name of the applicant, the scope of the target covered by the applied
methodology, the name of the applied methodology (including its version), and other relevant
information (the actual file image is omitted here).
A) Title of the methodology
The names of technologies and services as stipulated by the methodology are stated here. Its versions
and revision history are also recorded for future modifications to the emission factor, etc. *Revisionhistory is recorded at the very bottom of the main text.
B) Terms and definitions
A brief explanation of the main terms used in the methodology (e.g., important parameters incalculation of emission reduction).
C) Summary of the methodology
Content as stipulated by the methodology regarding the four items (① GHG emission reduction
measures, ② calculation of reference emissions, ③ calculation of project emissions, ④ monitoring
parameters) is briefly explained in the document. Calculation methods with actual formulas included
are discussed later, and only the stipulations are explained here.

14D)Eligible criteria
The eligible criteria include the following two points:①

Items necessary for a project to be registered as a JCM project②

Items necessary for a project to use an approved methodology

The points above also serve as the conditions to determine that the project can be registered as a
JCM project using the methodology and also calculate emission reduction. In other words, if a projectthat is similar to a past project is proposed, the information in this section can also be used to judge
the applicability of the existing methodology. Therefore, when considering this section, it is necessary
to identify the scope of application and take its versatility into consideration as well.
E) Emission sources and GHG types
All the GHG emission sources and the types of gases that are possible (reasonable) to be generated
due to the project are stated in the document after categorizing them into reference emissions andproject emissions.
F) Establishment and calculation of reference emissions
The method of calculating reference emissions, which serve as the base for GHG emission reduction
attributable to the project implementation, is defined (see 2.3.2 for the details of reference emissions).
This section discusses the basis of calculation (F.1) and the calculation formulas (F.2). *See the
Guidebook (Collection of Cases) for specific cases for each technical area.
G) Calculation of project emissions
The method of calculating GHG emissions that are produced during the project implementation isdefined. The formulas used here are closely linked with the reference emissions above; thus, they are
created in conjunction with section F above. There are some cases where the emissions are 0 (zero)for renewable energy, etc. However, due to different concepts depending on conditions, an appropriate
calculation method is developed for the project with reference to other methodologies.
H) Calculation of emissions reductions
This section shows the method of calculating emission reduction attributable to a project. Basically,
this calculation is made by subtracting project emissions from reference emissions.
Emission reduction = Reference emissions － Project emissionsI)Data and parameters fixed ex ante
The description and sources of the predefined parameters in the calculation formulas of the reference
emissions in section F.2 and the project emissions in section G are stated in the document.
Complementary information: History of the document
Revision history, including versions, dates, and modifications, is recorded at the very bottom of themain text. The coefficients used and the relevant scope of a methodology can change due totechnological innovation and other factors. For this reason, revisions are possibly made on an asneeded basis even after the methodology development (see chapter 5 for details).
15

4.1.2 Spreadsheet
The calculation sheet for actually figuring out the GHG emission reduction attributable to a project iscreated using Microsoft Excel and other types of electronic files.
The spreadsheet is called “Proposed Methodology Spreadsheet” for the proposed methodology and“Monitoring Plan Sheet” or “Monitoring Report Sheet” for the approved methodology, while the basic
content is composed of almost all the same items.

Figure4.1.

Approved

methodology

sample ①

FigureFigure4.2.

Approved

methodology

4.3.

sample ③

sample ②

Figure 4.5. Approved methodology sample ⑤

Figure 4.4. Approved methodology sample ④

16

Approved

methodology

Approved methodology
Monitoring Plan Sheet (to be attached to the PDD)
MPS (input)
MPS (input_separate)

Sheet summarizing the coefficients used and the types and descriptionof the values that will actually be measured.
Numerical values used for entry of the planned values of the values thatwill be actually measured.
Sheet summarizing the numerical values to be figured out respectively

MPS (calc_process)bybreaking

down

the

calculation

formula.

Entering

theMSS

implementation system (members and their roles) to clarify themonitoring structure.
Monitoring Report Sheet (for monitoring and verification)
MRS (input)

Entering the data measured during the monitoring period.

MRS (input_separate)

Entering the data measured during the monitoring period.

MRS (calc_process)Sheet summarizing the numerical values to be figured out respectively
by breaking down the calculation formula.

This sheet is used for monitoring activities, such as calculating the reduction volume, during the
project period when the introduced equipment and facilities are in service (within the lifetime of theintroduced equipment and facilities). Points to note in creating a spreadsheet are as follows: A sheet is created so that monitoring and GHG emission reduction can easily be calculated (doing so
helps create an environment that makes it easy for project participants to conduct monitoring
activities).
 This spreadsheet allows for calculating numerical values by actually using the calculation formulas
described in the main text of the methodology. Attention should also be paid so that the calculation
formulas are accurate and that there are no inconsistencies between notations.
 The content and description method of the measurement methods and procedures should also belinked with the main text. Since this is also a description of the method of how to obtain the data for
calculating GHG emission reduction, it is important to give consideration to ensure that the content
is tailored to the project situation in each methodology.

4.1.3 Additional Information
The main text of a methodology is a format mainly to describe thedefinition of terms and the method of calculating emission reduction; thus,
its basis and other background information should not be included in themain text. If the description of the main text of the methodology above is
not informative enough for users to understand, supplemental andadditional explanatory information is recorded in a document in Microsoft
Word format with relevant figures, etc. included.
There is no specific scope or rules for the details of additional explanatory
information. Supplemental information on the main text and the particulars
17

in the spreadsheet can be included. As for the method of description, the content should be describedas simply as possible based on scientific grounds (including sources). The description should containsufficient relevant data, including the background of selecting the numerical values, reference
emissions, the method of calculating project emissions, and the grounds for the method of calculating
emission coefficients. It is also important that consideration be given so that the description is basedon the perspective of project proponents who actually use such data.

4.2 Points to Note in Developing a Methodology
4.2.1 Throughout the Methodology Development Process5
The methodology development process and the development methods are discussed in the section
above. Concepts that should be kept in mind throughout the methodology development process are
outlined as follows: Have a third party clearly apply the methodology to the project as well as give an explanation of theprocedures in a sufficiently explicit manner for replicating the methodology.
 Ensure that the project conforming to the methodology can be subject to confirmation and/or
verification of the validity in the JCM Project Cycle.
 Include in the methodology all the algorithms, formulas, and phased procedures (e.g., calculationsof reference emissions and project emissions) that are necessary to check the application of themethodology and the validity of the project.
 Design the JCM methodology so that it is easy to use for project proponents and allows verification
organizations to easily verify the data.
 Ensure that the default values are widely used in a conservative manner to reduce monitoring loads.
 Clearly define the eligible criteria to reduce the risk that the project is rejected.

4.2.2 Key Items
Points to note regarding the key items among all the items in JCM methodology are as follows:(1)Eligible criteria (section D in the main text of methodology)
 Must be objectively verifiable by a third party.
 Have clear standards and features to determine whether the methodology can be used.
 Show the conditions necessary to calculate GHG emission reduction with the algorithms includedin the methodology.
 Make the validity in the JCM Project Cycle clear at the time of confirmation (no subsequentconfirmation and monitoring required).
 Ensure that the eligible criteria are demonstrated with a certain threshold, such as performanceindicators as well as reliable technical content, and that the criteria conform to the areas
applicable to the standards and content.
(2)Establishment and calculation of reference emissions (section F in the main text of methodology)
 From the perspective of business operators, even if a similar project is proposed by thecounterpart country, in the same way, only one method capable of calculating emission reduction
should be included.
5

Excerpt from the JCM Guidelines for Developing Proposed Methodology.

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 If reference emissions are calculated with the formula “Emission coefficient × Amount of activity(or output volume generated by activities),” the emissions should be lower than the values to bemeasured in the project. Doing so ensures net emission reduction.
 Reference emissions must be in accordance with the domestic laws of the counterpart country.
 The grounds for, and method of, the calculation are indicated, while the reason why the values
are lower than BaU (business as usual) emissions should also be included.
 The calculation methods should be capable of clearly figuring out values and as clear and uniqueas possible so that they can be employed to confirm or verify the validity by using them in similar
projects.

4.2.3 Confirmation by Project proponents
In addition to the information above, other points to confirm and note are summarized as follows inorder for project proponents to check the draft methodology developed by supporting organizations.
From the standpoint of project proponents specialized in the area to monitor necessary data during a
project, they are expected to engage in methodology development.
 Whether the project is applicable to the methodology.
 Whether the content of the methodology (eligible criteria, formula of calculating emissions, reference
emissions, etc.) is reasonable and appropriate as compared to technical and local situations.
 Whether the draft methodology under development is versatile from the perspective of project
proponents with expert knowledge and experience of the technology (whether the methodology isalso applicable to other similar projects).
 Whether the items to be monitored can be continuously measured during the actual project.

Summary

A methodology is composed of three documents: ① the main text ofmethodology, ② a spreadsheet, and ③ additional information; the principal partis ① the main text of methodology.



A predefined format for the structure of the main text of methodology isavailable; the document is prepared in a simple manner based on the format(see 4.1 above for each item) with reference to existing methodologies.

Project proponents are expected to provide information based on theirprofessional knowledge while referring to the points to note in developing amethodology (see 4.2 above), as well as to give advice from the standpoint of
personnel who actually implement and manage the project.

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5.

After Approval of JCM Methodology

A project whose proposed methodology has been turned into an approved methodology after being
approved by the Joint Committee with the counterpart country and a project to which an existing
methodology can be applied are moved on to the next phase of preparing a Project Design Document(PDD) for project registration. In the same way as methodology development, the phase of preparing
a Project Design Document (PDD) moves ahead with a cycle different from a Financing Programme
for JCM Model Projects.
The definition, coefficients, and other elements of a methodology can deviate from the actual ones
due to environmental and economic changes and technological innovation in the country with thepassage of time. Therefore, it is necessary to review the descriptions and update numerical values,
etc. on an as-needed basis. Proposed revisions to the developed methodology need to be approved
again by the Joint Committee in accordance with the process (4) and onward of 3.2, Development
and Approval Process, above. These procedures are mainly handled by the supporting organization.
[Points to note in revising a methodology]
 Update the revision number of the title and record the revision history.
 Cover all the items (including the spreadsheet and additional explanatory information) in the same
methodology related to the content to be revised.
 Check the details of similar methodologies in other countries as well as related methodologies using
other technologies in the same country.

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