Preparatory Meeting for Article 6 Implementation Partnership

Summary of the meeting
September 9, 2022

Organized by:
Ministry of the Environment, Japan (MOEJ)
Institute for Global Environmental Strategies (IGES)

Summary of the Conference
At the COP26 of the United Nations Framework Convention on Climate Change (UNFCCC) in Glasgow,
negotiators reached the agreement on the implementation guidelines for Article 6 of the ParisAgreement. In order to implement Article 6 at the earliest stage, it is important to understand therules stipulated in the Article 6 guidelines by all stakeholders and promote concrete activities.
In light of this, the Ministry of the Environment (MOE), Japan, held the Article 6 Implementation
Partnership Preparatory Meeting, a preparatory meeting on a partnership for the implementation ofthe Article 6 of the Paris Agreement, in Kamakura, Kanagawa Prefecture, on September 9, 2022. The
Preparatory Meeting welcomed a total of 55 experts from 19 countries and 14 organizations whoshared capacity-building activities on Article 6 implementation and discussed future collaborationand contents of activities for the Article 6 Implementation Partnership to be launched at COP 27.
Key takeaways from the Preparatory Meeting are;o There are three particular capacity building needs, agreed as important, for Article 6
implementation: (1) promotion of understanding to participate in the Article 6
implementation; (2) processes, such as corresponding adjustment, authorization, andreporting implemented under Article 6; and (iii) project formulation specific for emission
reduction under Article 6 .
o A survey conducted by MOE on the Article 6 implementation shows that there areooregional and country gaps between providing and receiving countries for Article 6
capacity building support. Therefore, importance of collaboration among organizations,countries, and regional alliances will grow further, so that capacity-building support
reaches where needed efficiently, while avoiding duplication and competition.
Countries and organizations providing capacity building supports have lessons learned,
including both successes and failures, and those lessons should be shared among a wide
range of stakeholders for better and effective capacity building.
Private sector is looking for investment opportunities in mitigation projects and isincreasing its interest in becoming carbon neutral. The willingness to participate in
Article 6, the authorization process, transparency, interoperability with carbon markets,accountability, and capacity building are important to encourage companies’ investment.

At the plenary discussion session, the participants expressed their support for Japan's efforts toward
launching the Partnership. Efficient and effective support through synergy with existing capacitybuilding efforts, e.g. UNFCCC-RCC, is required, and given that capacity building for participation inand reporting on Article 6 is a priority, the next step will be to establish a working group on2

institutional arrangement for Article 6 participation and its reporting and to seek concrete directionsof the Partnership.

Disclaimer
The organizers have made every effort to ensure objectivity and provide a comprehensive summaryof the conference, but errors can occur. The organizers assume no liability or responsibility for anyerrors in this report. Please also refer to the materials available on the conference site for eachspeaker’s contribution.

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1.

Opening Remarks

H.E. Miki Yamada, State Minister of the Environment,oState Minister Miki Yamada started the opening remarks by mentioning that the market mechanism
rules of Article 6 will play a significant role to achieve the 1.5 degree target. She stressed that Japan
has been contributing to the negotiations on the rules of Article 6 and pioneering the implementationof market mechanism through the joint Crediting Mechanism. There are 3 actions proposed by State
Minister to contribute to global decarbonization. The first option is to expand the number of JCM
partner countries. Japan will increase the number of partner countries up to 30 by 2025 and will workwith international organisations including Asian Development Bank, World Bank and United Nations
Industrial Development organization to formulate and implement the projects. The second option isto promote the utilization of private sector financing. The Government of Japan is now proving theprocedure for formulating the JCM project, mainly financed by the private sector. The third option is
to contribute to the global expansion of market mechanisms. MOE held online international
conferences in February and March, 2022 to discuss institutional arrangements and capacity building
for relevant government officials and stakeholders to implement Article 6. In the next step, MOE will
launch the Article 6 Implementation Partnership at COP27.

2.

Session1: Status of Article 6 Capacity BuildingArticle 6 Implementation and Status of Capacity Building➢ Sadamitsu Sakoguchi, Ministry of the Environment, Japan (MOEJ)
oMore than 120 countries expressed their interest in the use of Article 6 in their NDCs. In addition, theimportance of capacity building of Article 6 has been discussed in Climate, Energy and Environment
Ministers’ Meetings of G7 and G20. Parties will be required to submit their first BTR in the end of2024, and they need to prepare the relevant arrangement and infrastructure for their participationto Article 6 and relevant reporting. International support is needed to enhance the capacity. Japanaims to launch Article 6 Implementation Partnership at COP27 for the purpose of promotinginternational coordination of Article 6 Capacity Building.

Article 6 Capacity Building Survey Results➢ Mr. Perumal Arumugampillai Kalyani, UNFCCC secretariatoIn May 2022, UNFCCC and RCC organized Regional Dialogues on Article 6 Capacity Building Needs inAfrica, LAC, and Asia-Pacific and MENA. A wide range of needs were identified in relation to Article
6.2, 6.4, and 6.8. In addition, survey on Article 6 Capacity Building Needs was conducted tounderstand the elements with priority and suggested frequency of capacity building activities.
Capacity building activities can be categorized into development of knowledge development tools,training, and technical assistance. The identified capacity building needs will serve as input in thedevelopment of capacity building work programme, and other meetings towards COP27.

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3.

Session2: Sharing Experience for Article 6 implementation

International coordination and partnership,➢ Dr. Venkata Ramana Putti, World BankoWorld Bank has provided capacity building in carbon market and carbon pricing since 2005 throughvarious initiatives including Partnership for Market Readiness (PMR) and ongoing Partnership forMarket Implementation (PMI). He shared the lessons learned from past capacity building activities
including the importance of a clear political mandate, a broader policy framework, institutionalarrangements, stakeholder engagement, right selection of counterpart agency. He also stressed that
NDC context and just transition should be considered.

Sharing countries’ experiences of institutional arrangements➢ Mr. Martin Hession, European UnionoEU shared their views based on their support experiences. He stressed that it needs to develop
partnerships based on the practical cooperation. EU has the funding support for integrated
approach on Article 6. He also shared that there was enormous amount of experience that made alot of mistakes. It was stressed that it is important to integrate Article 6 for catalyzing furtherprojects.

➢ Mr. Maudjahid Akorede Wabi, West African Alliance (WAA)oIn the presentation, he introduced the activities (e.g. Article 6 readiness support plan, Article 6technical workshops) for supporting countries in Africa to participate in Article 6 cooperativeapproach. He has presented the capacity building areas in Africa such as developing guiding
principles for authorization of ITMOs, establishing legal framework on governing Article 6,
integrating Article 6 approach into NDC implementation plan and developing an infrastructure totrack ITMOs.

Support for pilot project and domestic tracking and recording infrastructure including registry➢ Ms. Alexandra Soezer, UNDPoUNDP briefly explained the activities in UNDP for Article 6 readiness support programme: 1.
Regulatory and institutional readiness support; and 2. Digital infrastructure. For national registries
for the countries to participate in Article 6, ”Digital public goods” was used as an online platform.
Further, she showed Ghana’s support activities for the regulatory and institutional Article 6
framework in which new 5 projects were already developed and received the pre-authorization
letter from the government of Ghana. She also mentioned that Ghana is now developing the initialreport and soon it will be submitted to the UNFCCC. She also presented briefly the progress from5

Vanuatu which has finalized the first initial report for submission to UNFCCC and issued the first
letter of authorization for an energy access project which has commenced implementation.
➢ Mr. Andrea Bonzanni, IETAo IETA shared the private sector’s reaction to Article 6 decision as the organization represents 250
members companies globally. He explained that private sector is interested in investment
opportunities in mitigation projects, accessing to cheaper abatement options, and operations ofbusinesses for carbon neutral. Further he introduced IETA discussion paper on how governments
can implement NDCs with utilizing Article 6 and encourage private sector investment. In the paper,
there are five areas identified, in which governments should address and give clarities to thebusiness sectors: intention to participate in Article 6, authorization process, transparency,
interoperability with carbon markets, accountability, and capacity building.
➢ Dr. Myung Kyoon Lee, UNEP CCCo UNEP CCC shared the overview of their support to implement Article 6. There are three areas forArticle 6 support such as supporting preparedness for Article 6 cooperation, promoting
transformational change through carbon markets, and sustainable development initiative forArticle6. UNEP CCC also has developed CDM and PoA database in the past. In addition, they
identified Article 6 pilot activities and developed the Article 6 database which was publicly available
in their website. UNEP CCC also introduced the initiative for climate action transparency (ICAT),
which supports the development and establishment of domestic MRV systems and builds capacities
for monitoring of policies and actions.
A6 mechanism baselines and tool
➢ Dr. Axel Michaelowa, Perspectiveso Perspectives shared the view on Article 6 mechanism, especially baselines and tools. They started
to introduce the Article 6.4 principles including additionality. Perspectives also shared their new
initiative on Article 6 “International Initiative for the Development of Article6 Methodology Tools(II-AMT)” as one of the promoting methodological works. This initiative was funded by governmentsof Germany, Japan, Sweden and UK and AfDB and will seek the further funding to deepen theinitiative in the future. Currently this initiative is under the second phase for developing the tools
and will make four tools as outcomes before COP27. This methodological work will plan to makethe inputs for Article 6.4 supervisory body, particularly the methodology working group.

Scaling up of capacity building activities➢ Mr. Tomohiko Hattori, IGES6

o IGES introduced the experience of mutual learning for enhanced transparency which wasconducted with Chile, Thailand, Mongolia, and Indonesia. The mutual learning programme wasdesigned with the aim of generating tangible outputs so that participating parties can prepare theArticle 6 reporting. In the mutual learning, an exercise on Article 6.2 reporting was conducted forgovernment officials to promote understanding of corresponding adjustment and initial report.
Through the exercise work, several challenges and lesson learned were identified to promote Article
6 implementation. One of the lessons learned was not only to identify the gaps in understating but
also to know what other countries are doing for preparation of Article 6.
➢ GGGI, Ms. Lorna Ximena Aristizabal Clavijoo GGGI manages a portfolio of 3 Article 6 programs with the objective to increase ambition beyond
unconditional NDC through carbon finance. MATS Program supported by the Swedish Energy
Agency, DAPA Program supported by the Norwegian Ministry of Climate and Environment, andSPAR6C supported by the International Klimate Initiative. GGGI’s MATS Program cooperates withCambodia and Nepal on the development of large-scale pilot projects by focusing on the readinesssupport including authorization, transfer and reporting to UNFCCC. As for the designing Article 6
policy approaches, they cooperate with Indonesia, Morocco, Senegal and Vietnam. Finally, underSPAR6C, they support Colombia, Thailand, Pakistan and Zambia, providing the technical capacity
support to various stakeholders in the context of readiness, increasing ambition and promoting
transformation. GGGI shared the key lessons learned from their capacity building activities such as
the need of tailored solutions for each country, engagement with local institutions and experts andthe provision of support on a continuous basis rather than isolated workshops, among others.
4.

Wrap-up and Way Forward➢ MOEJ Mr. Takayuki Shigematsuo MOEJ introduced their proposal on Article 6 Implementation Partnership with the future roadmap.
He also shared the result of analysis on current state of Article 6 capacity building based on theMOEJ’s survey. There were 110 countries which had the intention to use at least one type of market
mechanism. The result categorized three types of Article6 capacity building; participation for Article
6, reporting and project development. This analysis found that many activities for capacity building
were provided by the international organizations, countries and regional alliances. He also stressedthat it could elaborate what kinds of initiative or what type of activities can collaborate more
effectively to implement capacity building in the future. Japan’s proposal is specifically targeting2023-2024 to implement the Article 6 capacity building through working groups on the priority
areas such as authorization, registry and reporting including initial report and annual information.
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At the wrap-up session, KOAKUTSU Kazuhisa, Director of International Negotiations, Office of the Director forInternational Cooperation for Transition to Decarbonization and Sustainable Infrastructure, MOEJ
summarized the points raised by participants as follow.
oImportance for socializing the knowledge among various stakeholders

oConnecting deeper various initiatives in order to complement each other and also avoid potential
contradictions between some of the information because of different interpretations on Article 6oImportance of facilitating the understanding of Article 6 through capacity building initiatives

oIdea of the working groups is very important, and need to have the subgroup which specifically focuses
on reporting, corresponding adjustments and methodologies.

o

Need to consider the longer strategic approacho

Need coordination mechanisms with current institutions like UNFCCC-RCCs and alliances so that thisinitiative can maximize the benefitoNeed to focus the targeting scope such institutional arrangement and infrastructure in the first phaseoHow to address the regional balance to implement the capacity building activity

oImportance of capacity building actvities in the context of transparency because of linkage between
Article 6 and 138