Joint Crediting Mechanism in Indonesia

Joint Crediting Mechanism in Indonesia
National Council on Climate Change in Indonesia (DNPI)
January 2014
Introduction
The JCM is an initiative from the Government of Japan, which encourages Japanese private
organizations to invest in low carbon development activities in Indonesia through incentives. The
JCM shall cover 16 sectors, including energy efficiency, renewable energy, REDD+, construction,
waste handling and disposal, fugitive emissions, manufacturing industries, among others.
Indonesia expects the JCM to be an attractive option to support emission reduction activities
amidst the changes in multilateral carbon market.
Since 2010, Indonesia and Japan started the discussion for this cooperation. By the end of 2013,
more than 70 Feasibility Studies have been conducted in Indonesia through collaboration between
Japanese and Indonesian organizations. They cover the fields of renewable energy, energy
efficiency, forestry/REDD+, transportation, carbon capture and storage, and agriculture. This
proves the vastness of interest and opportunities in project development.
After 3 years of negotiation, the JCM cooperation agreement has been signed in August 2013 by
the Government of Indonesia, represented by the Coordinating Minister for Economic Affairs, and
Government of Japan, represented by Minister for Foreign Affairs. This is obviously an important
milestone in the development of JCM.
The Joint Committee and JCM Indonesia secretariat
Following the agreement, Government of Indonesia and Japan has established a Joint Committee,
consisting 15 government officials from both sides. The Joint Committee has conducted two
meetings to date in which the committee discussed and agreed upon a number of issues related to
JCM implementation. The Joint Committee also has represented JCM Indonesia-Japan in
international events such as COP 19 in Warsaw.
A number of innovations in JCM implementation have been agreed by the Joint Committee. These
include the establishment of two JCM secretariats working separately for each country, a Project
Idea Note mechanism for project or needs proposal from Indonesian side, capacity building
proposal, and the involvement of Indonesian auditors in the JCM project validation and
verification. The Joint Committee shall continue to work to guide the JCM implementation.
Government of Indonesia through TKPPKA (Coordination Team for Interstate Carbon Trade
Negotiation), involving various ministries and bodies involved in the national effort in greenhouse
gas emission) has been conducting consultation and facilitation for potential project developers in
conjunction with feasibility study process. Prospective project developer consortiums of Japanese
and Indonesian private companies consulting actively with TKPPKA includes Yokogawa-Pertamina,
JCM Indonesia secretariat
Pertamina-Marubeni, Toyotatsusho-Mizuho, Mitsubishi UFJ, Mitsubishi RI, Panasonic, Sharp,
Indonesian Cement, among others.
Constant communication and consultation process with the Government of Indonesia regarding
JCM development must be continued in the future. The representative of JCM shall continue to be
TKPPKA through JCM Secretariat Indonesia. The JCM Secretariat will do daily JCM operation as well
as the implementation, monitoring and evaluation. The secretariat will play the roles as:
Supporting entity for Bilateral Carbon Trade Coordination; Technical Assessment Center;
Communication & Knowledge Center; and supporting entity for JCM Program in Indonesia.
Way Forward
From the studies already conducted, The Joint Committee also shall select a number of pilot
projects to be implemented in the year 2014. The purpose of running these pilot projects is to testrun the JCM methodology and project cycle. The candidate projects are:
1. Energy Saving Technology by Optimizing Plant Operation (Yokogawa and Pertamina)
Yokogawa Electric Corporation has been collaborating with Pertamina in energy saving
project study in their refinery through system automation in monitoring energy
consumption, aiming to increase energy efficiency and to streamline operational
activities, leading to reduce greenhouse gases emission reduction.
2. Introduction of Large Scale Thin-Film Solar Power Plant (SHARP and PLN)
SHARP and PLN has been studying the feasibility of thin-film solar power plant in lesselectrified area through on-grid photovoltaic system.
3. Energy saving by double bundle-type heat pump at beverage plant (Toyota Tsusho
Corporation and PT. Hokkan Indonesia)
A double bundle-type heat pump will be installed into the thermal supply system in a
beverage factory and preheat reverse osmosis (RO) water to reduce natural gas
consumptions.
4. Energy saving for air-conditioning at textile factory (Ebara Refrigeration Equipment &
Systems and PT. Argo Pantes Tbk.)
The target factories will replace old-fashioned existing chillers with 3 high-efficiency
chillers, adopting high-performance economizer cycle super-cooling refrigerant in order
to save energy and use low-pressure refrigerant HFC-245fa to ozone destruction.
5. Energy Savings at Convenience Store (Lawson and PT. Midi Utama Indonesia Tbk)
A study is being conducted by Lawson convenience stores to seek the use of energy
efficient refrigerant and power generation at their stores, potentially reducing
greenhouse gases emission from their activities.
6. Energy Efficient Refrigerants to Cold Chain Industry (Mayekawa Manufacturing Company
and PT. Adib Global Food Supplies)
The advanced energy efficient non-fluorocarbon cooling system will be introduced in the
food industry and logistics industry in Indonesia, demonstrating its high energy saving
impact as well as large amount of GHG emission reduction.
7. Energy Saving for Air-Conditioning and Process Cooling at Textile Factory (Ebara
Refrigeration Equipment&Systems Co., Ltd., Nippon Koei Co., Ltd., and PT. Primatexco)
JCM Indonesia secretariat
This study is being conducted by Ebara Refrigeration Equipment & Systems and
Primatexco Indonesia to reduce greenhouse gas emission from their manufacturing
activities.
Indonesia strongly expect JCM cooperation to benefit Indonesia and Japan, not only in reducing
greenhouse gases emission but also in promoting green investment, green technology, fostering
private sector participation in climate change mitigation, as well as catalyzing the development of
new carbon market mechanism. Indonesia as a host country also expects the cooperation to
provide domestic co-benefits such as improving environmental quality, capacity building,
promoting employment, and developing MRV expertise.
Indonesia is looking forward to putting into practice a robust Joint Crediting Mechanism and
implementing projects in the year of 2014. We also welcome other initiatives and cooperation
opportunities in the future to support our efforts in greenhouse gases emission reduction.
***
JCM Indonesia secretariat

Download Report