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Rules of Implementation for
the Joint Crediting Mechanism (JCM) (Draft)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 PARTNER COUNTRY;(b)

To appropriately evaluate contributions to greenhouse gases (hereinafter referred
to as “GHG”) emission reductions or removals from Japan in a quantitative
manner, through mitigation actions implemented in the PARTNER COUNTRY
and use those emission reductions or removals to achieve emission reduction
targets of the countries 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.

(d)[For Reducing Emissions from Deforestation and Forest Degradation, and theRole of Conservation, Sustainable Management of Forests and Enhancement ofForest Carbon Stocks in Developing Countries (REDD-plus), to contribute to thenational REDD-plus strategy or action plan.]
B.

2.

Scope

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 under the JCM (herein after referred to as “JCM credits”) are issued based on

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

Each JCM project except for REDD-plus and afforestation/reforestation selects the
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crediting period which is either a fixed period of 10 years, or a renewable period of five (5) years
which may be renewed twice at the maximum. JCM credits are issued based on GHG emission
reductions or removals realized until 31 December 2030. The crediting period for REDD-plus
and afforestation/reforestation is a renewable period of a maximum of fifteen (15) years which
may be renewed twice at the maximum. [Where possible, the total crediting period for REDDplus and afforestation/reforestation including renewal of the period should be more than 20 years.]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 guidelines and other rules necessary forthe implementation of the JCM, including, but not limited to:(a)guidelines for the development of methodologies;(b)

methodologies;(c)

guidelines for the designation as a third-party entity;(d)guidelines for the validation;(e)monitoring guidelines;(f)

guidelines for the verification of GHG emission reductions or removals;(g)guidelines for addressing and respecting safeguards for REDD-plus andafforestation/reforestation;(h)common specifications for registries;(i)forms for project design document (hereinafter referred to as “PDD”), sustainable
development implementation plan (hereinafter referred to as “SDIP”), request forregistration of JCM projects, monitoring report, sustainable development
implementation report (hereinafter referred to as “SDIR”), request for verificationof emission reductions or removals, etc.;(j)7.

guidelines for the sustainable development implementation plan and report.

The Joint Committee may modify the “Rules of Implementation for the Joint Crediting

Mechanism” and the “Joint Crediting Mechanism Rules of Procedures for the Joint Committee”.
8.

The Joint Committee designates the third-party entities.

9.

On the basis of a Project Idea Note (hereinafter referred to as “PIN”) submitted by
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project participants, the Joint Committee decides to object or not to object to the planned projectdescribed in the PIN.

10.

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

participants, the Joint Committee registers JCM projects which were validated by the third-party
entities, and adopts the percentage of JCM credit allocation for the JCM project.
11.

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

submitted by project participants, the Joint Committee notifies each sides to issue the JCM credits
which were verified by the third-party entities.
12.

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.
13.

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

consultations about the relevant policy measures of the JCM.
14.

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

15.

Both sides work in close cooperation to facilitate financial, technological and capacity

building support necessary for the implementation of the JCM. Particularly the Japanese side will
support the PARTNER COUNTRY’s side for the implementation of the JCM.
D.
16.

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 the
implementation 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 JCM credit by the Joint Committee(including for allocation of JCM credits among participants), issues the notified
amount of JCM credits to its registry.

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17.

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

JCM.
18.

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

JCM.
19.

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

any other international climate mitigation mechanisms to avoid double counting.
20.

[For REDD-plus, a JCM project may be part of national or sub-national REDD-plus

programs and each side takes necessary measures to avoid double counting.]
E.
21.

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;(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 the
Joint Committee, records the verification result in a verification report and sends
the report to the project participants.
F.

22.

Project Participants

Project participants:(a)

Prepare a PIN and submit it to the Joint Committee for its decision;(b)

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

Prepare a draft PDD and submit the draft to a third-party entity for validation andnotify the Joint Committee;(d)Prepare a SDIP and submit it to the JCM secretariat for review;(e)Submit the PDD that was validated by the third-party entity, the percentage of
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JCM credit allocation and positively reviewed SDIP to the Joint Committee forthe registration of the project;(f)

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

(g)

Prepare a project implementation report and submit it to the Joint Committee
annually until the end of the operational lifetime of the JCM project or the end of
the crediting period, whichever comes first;(h)Prepare a monitoring report and send the report to a third-party entity forverification;(i)

Prepare a SDIR and submit it to the Joint Committee for an evaluation(j)

Submit a verification report prepared by the third-party entity and a evaluatedSDIR to the Joint Committee, and request notification to each side for issuance of
JCM credits.

23.

For REDD-plus and afforestation/reforestation, project participants additionally:(a) Prepare a Safeguard activities Implementation Plan (hereinafter referred to as“SGIP”) and submit it to the JCM secretariat, for the review by the Joint Committee;(b) Submit the positively reviewed SGIP to the Joint Committee for the registration of
the project;(c) Prepare a Safeguard activities Progress Report (hereinafter referred to as “SGPR”)
and send the SGPR to the JCM secretariat, for an evaluation by the Joint Committee;(d) Submit a positively reviewed SGPR to the Joint Committee for requesting
notification to each side for issuance of JCM credits.
G.

24.

Submission of Project Idea Note

The project participants prepare a PIN and submit it to the Joint Committee. Those

planned projects described in the PINs to which the Joint Committee decides not to object may
proceed to the request for registration of project.
H.
25.

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.
26.

The Joint Committee determines either to approve or reject the draft methodology,
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taking account of, among other things, inputs received and notifies the result to each side or
project participant, as applicable. The Joint Committee makes publicly available the relevant
information on the approved methodologies through a website.
I.
27.

Designation of Third-party Entities

Upon receiving an application for designation as a third-party entity submitted by acandidate, the Joint Committee designates a third-party entity in line with the guidelines for thedesignation as a third-party entity, and makes publicly available the relevant information on thedesignated third-party entity through a website.
28.

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.
J.
29.

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.
30.

Project participants develop a PDD by filling in the form and request a third-party entity

to validate the proposed JCM project.
31.

The third-party entity, in line with the guidelines for the validation as developed by the

Joint Committee, validates the proposed JCM project as described in the PDD and notifies theresult of the validation to the project participants.
K.
32.

Registration

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

JCM project.
33.

Project participants of a JCM project consult among themselves and with both sides thepercentage of JCM credit allocation among the project participants of Japan, the project
participants of the PARTNER COUNTRY , the Japanese side and the PARTNER COUNTRY’s
side respectively, taking into consideration their respective contribution to GHG emission
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reductions or removals by the JCM project.
34.

Project participants submit the PDD, which was validated by the third-party entity, thepercentage of JCM credit allocation and positively reviewed SDIP, to the Joint Committee andrequest for registration of the project.
35.

For REDD-plus and afforestation/reforestation, project participants additionally submit

the positively reviewed SGIP to the Joint Committee for the registration of the project;
36.

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

Committee decides the percentage of JCM credit allocation, registers as the project, notifies eachside of the registration and makes publicly available the relevant information on the JCM projectthrough a website.
L.
37.

Monitoring

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

removals by the JCM project based on the PDD.
M.
38.

Verification

Verification is the periodic independent review and ex post determination of monitored

GHG emissions reductions or removals for a specific monitoring period of a registered JCM
project conducted by a third-party entity.
39.

Project participants prepare a monitoring report and request a third-party entity forverification.
40.

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.
N.

Issuance of JCM Credits

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41.

Each side establishes a registry to record and use the JCM credits, measured in metrictonnes of carbon dioxide equivalent (tCO2eq) in line with the methodologies and metrics assessedby the Intergovernmental Panel on Climate Change.
42.

Project participants request the Joint Committee to notify each side to issue the JCM

credits to its respective account in the registry on the basis of the verification report, and evaluatedSDIR, in line with the percentage of JCM credit allocation decided in paragraph 36.
43.

For REDD-plus and afforestation/reforestation, project participants additionally submit

a positively reviewed SGPR to the Joint Committee for requesting notification to each side forissuance of JCM credits.
44.

Upon receiving the request for issuance of JCM credits from the project participants,

the Joint Committee notifies each side of issuance of JCM credits.
45.

The Joint Committee makes publicly available the relevant information on the issuanceof JCM credits through a website.
O.
46.

Use of JCM Credits

JCM credits issued from emission reductions and removals from 1st January 2021 may

be used towards the achievement of Japan’s nationally determined contribution and the rest of thesaid JCM credits may contribute to the achievement of the PARTNER COUNTRY’s nationallydetermined contribution, while ensuring that double counting is avoided on the basis ofcorresponding adjustments.
47.

JCM credits are issued in the JCM registry of Japan and the JCM registry of the

PARTNER COUNTRY respectively with the avoidance of double counting. JCM credits issued
by each side are tradable within its respective country.
48.

JCM credits may not be traded between the JCM registry of Japan and the JCM registryof the PARTNER COUNTRY unless each side establishes necessary arrangements for the trade.
49.

Each side authorizes the JCM credits issued in the JCM registry of Japan for the use

toward the achievement of Japan’s nationally determined contribution as internationallytransferred mitigation outcomes, consistent with the guidance on cooperative approaches, referred
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to in Article 6, paragraph 2 of the Paris Agreement (hereinafter referred to as “the guidance”).
50.

Each side may authorize part of JCM credits for use for other international mitigation

purposes, as appropriate, consistent with the guidance.
51.

The PARTNER COUNTRY’s side applies a corresponding adjustment to the JCM

credits issued in the JCM registry of Japan as well as the JCM credits issued in the JCM registryof the PARTNER COUNTRY and authorized for the use toward other international mitigation
purposes, consistent with the guidance.
52.

Each side checks the status of the issuance and use of JCM credits and makes sure that

double counting is avoided as described in paragraphs 19 and 47.
P.
53.

OthersA project which started operation on or after DD MM 20YY is eligible for consideration

as the JCM project.
54.

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.

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