J-Credit Scheme

February 2019

J-Credit Scheme
1. Outline of J-Credit Scheme
 Outline of J-Credit Scheme
Vitalize new scheme by integrating two similar schemes (Domestic CDM, J-VER) that issued credits
respectively
 Promote GHG emission reductions and removals in Japan after 2013 continuously and actively
 Enhance CSR activities and voluntary carbon offsetting
Domestic CDM J-VER
「Voluntary Action Plan」participants, etc. Entities etc.
Until end

Attestation
Committee
of March Capital Credits(GHG Credits(GHG
emission reduction) Capital emission reduction

Attestation
Committee
2013 Certification and removal)

SMEs Agriculture Households

of Domestic
CDM

※Local
＋ Local govs Forestry
Certification
of J-VER

governments
Solar power Forest management,
Heat pump Biomass boiler also participate Biomass boiler
generation Afforestation

J-Credit Scheme
Users of Credits
Application for project Utilize for
Utilize for
Credits “Keidanren’s
registration, application for commitment to a
voluntary carbon
offsetting
certification of credits low carbon society”

After
Central Project Utilize for Act on
Promotion of Global Utilize for Energy

April government participants Warming

Countermeasures
Efficiency Act
(※２)
Credits Capital (※1)
2013
(※１)Adjustment for reporting emissions under
Steering Certification GHG emissions reporting system based on the Act
(※２)Reporting the registered projects as “joint
committee Discussion committee energy efficiency projects” under the Energy
Efficiency Act
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 Merits for the participants
Supply Side
(Small and Medium Enterprises )
1. CO2 emission reductions and
energy savings are achieved
2. Saving running costs /
Profit from selling of the credits
3. Covers projects other than energy
related projects such as forest
sinks
4. PR effects
Equipment Suppliers
○ Additional value to their energy-
saving equipment and services
Demand Side
(Large Enterprises)
1. Utilization for achievement of
Voluntary Action Plan targets
2. Utilization for voluntary carbon
offsetting and CSR activities
(environmental protection,
regional activities)
3. Report adjusted emissions taking
into account the obtained credits
4. Report the registered projects as
“joint energy efficiency projects”
under the Energy Efficiency Act
5. Reporting to CDP questionnaire
(see p.21 for more information)
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 Process of the J-Credit Scheme

Central government
Step Project Participant Examining Authorities ／Committee
(Secretariat)
Development of PDD
①Development Submission of Approval of
of Methodology Proposed Proposed
(※ If necessary) Methodology Methodology

Development
②Project Planning of PDD
Contract
Registration of Project
Receive
③Validation Validation
Validation Report Report

④Discussion・ Request Registration of Discussion・

Registration Project Registration

Monitoring·Certification
⑤Monitoring·
Monitoring·Calculation
Calculation
Contract

Receive Report
⑥Verification Verification
Verification Report

⑦ Discussion· Request Certification of Discussion ·

Certification Credit Certification

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Structure for rules and documentation in J-Credit Scheme

①Implementation Outline

⑥Adhesive terms
②Rules of implementation ④Rules for developing and conditions
(For project participants) Methodologies (for project
participants)
⑤Methodologies
③Rules for monitoring
and calculation ⑥Adhesive terms
and conditions
(for examining
②Implementation Rule authorities)
(For examining authorities)

Documents that project participants must follow

Documents that examining authorities must follow

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 Major Players in J-Credit Scheme①

Project participants

• No limits for project participants

※Under Domestic CDM, there was a condition that participants
of the Voluntary Action Plan cannot be project participants.

• However, when project participants also

participate in Keidanren's Commitment to a Low
Carbon Society, credits certified from their
project cannot be used to achieve the target of
Keidanren's Commitment to a Low Carbon
Society

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 Major Players in J-Credit Scheme②
Management (Ministry of Economy, Trade and Industry, Ministry of the Environment, Ministry of Agriculture,
Forestry and Fisheries)

○Role
Management of J-Credit Scheme, authority to approve and revise documents, register projects, certify
credits and approve Regional J-Credit Schemes, etc.

○Task
① Approval and revision of documents
② Establishment of steering committee and certification committee
③ Registration of projects
④ Certification of credits
⑤ Creation and management of registry
⑥ Designation of examining authorities
⑦ Approval of Regional J-Credit Scheme
⑧ Others

Central government
Establish (management) Establish
Opinion
Steering Certification
committee committee
Support
Secretariat 8
 Major Players in J-Credit Scheme③

Examining Authorities

Institutes that execute validation and verification

※Validation：examination of PDD before registration of projects

※Verification：examination of monitoring report before certification

Requirement for registration

Holding ISO 14065 certification to guarantee

credibility of the scheme

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 Designated Examining Authorities(As of February 2019)

Validation Verification
Name of Authorities
EN IN AG WA FO EN IN AG WA FO
Deloitte Tohmatsu Sustainability Co., Ltd. ● ● ● ● ● ●
Perry Johnson Registrar Clean Development
Mechanism, Inc. ◎ △
Japan Management Association GHG
Certification Center ◎ △ △ ◎
Lloyd’s Register Quality Assurance Limited
Japan ● ●

Bureau Veritas Japan Co., Ltd. ● ● ● ●

Japan Quality Assurance Organization △ ● △ ◎ ● ◎

Japan Smart Energy Co., Ltd. ◎

Nippon Kaiji Kyokai ◎ ◎

◎ ISO14065 Certification
○ Temporary Registration①：Within two years from application
● Temporary Registration②：In case registered authorities are less than one in an area (less than three in a forest area)
△ Special Exception for temporary registration

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2. Projects & Methodologies
 Eligible Projects for J-Credit Scheme
・Projects
Action that reduce GHG emissions or enhance GHG removals

Requirement for registration

① Implemented within Japan

② Implemented within two years prior to, on or after the registration-request day
③ Not an identical activity with any preceding project whose certification period has
already expired (A project’s certification period ends within eight years after the
period’s commencement day and no later than March 31, 2031.)
④ Not the identical activities with other projects registered on similar schemes
⑤ Satisfies additionality
※In principle, payout time for facilities of projects is more than three years
⑥ Implemented based on approved methodologies
⑦ Validated by examining authorities
⑧ Takes action to keep permanence (Forest sink only)
⑨ Meets all the other requirements of J-Credit Scheme

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 Methodologies
・Methodologies
Methodologies rule boundary, calculation formula and method of
monitoring for each technology of emission reduction and removal.

Type of Methodologies Concept of “Baseline and Credit”

Energy (EN)
Energy saving(EN-S) Emission reduction credit is the difference
Reduce energy related emissions by reducing between the baseline emission and actual
fossil fuel emission after implementation of
Renewable energy(EN-R) projects.
Reduce energy related emissions by
replacing fossil fuel to renewable energy ① Baseline emission
Industrial Processes (IN)
Reduce GHG emissions from industrial
Emission reduction
processes through chemical or physical change
(①－②)
Agriculture (AG)
Reduce GHG emissions from agricultural sector
(livestock, farm land) ② Actual emission
Waste (WA)
Reduce GHG emissions from waste
management
Forest (FO) Implementing projects
Enhance GHG removals by managing forest sink
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 Approved Methodologies ①
As of February, 2019, 61 methodologies were approved.
 Energy saving, 40, Renewable energy, 9, Industrial Processes, 5, Agriculture, 3, Waste,2, Forest, 2
Type of
Methodologies
methodologies
Introduction of high efficiency boilers
Introduction of high efficiency heat pumps
Introduction of high efficiency industrial furnaces
Introduction of high efficiency air conditioning facilities
Renewal of fan and pump or installation of inverter and controlling equipment
Introduction of high efficiency lighting facilities
Introduction of co-generation equipment
Renewal of transformers
Switch from private heat source equipment to outside heat sources
Introduction of electric generators utilizing waste steam
Utilizing recovered waste heat
Introduction of electric vehicles
Energy saving Improving delivery efficiency of Propane gases utilizing IT
Reducing meter reading utilizing IT
Introduction of high efficiency vending machines
Introduction of high efficiency refrigeration equipment
Renewal of roll ironers
Renewal of electric marine vessels
Switch from fossil fuel or grid power to fuel from waste
Renewal of fan and pump
Renewal of construction machinery and industrial trucks by introducing electricity-operated
machineries and trucks
Renewal of productive facilities (machine tools, press machines or injection machines
Introduction and utilization of digital tachograph and other equipment that support eco-drive
Upgrade of TV sets 14
 Approved Methodologies ②
Type of
Methodologies
methodologies
Introduction of private electric generators
Renewal of drying machines
Energy efficiency improvement of air conditioning facilities by installing a rooftop greenery
Renewal of construction machinery and industrial trucks by introducing hybrid machineries and trucks
Introduction of natural gas vehicles
Introduction of high efficiency printing machines
Renewal of servers
Introduction of high efficiency plumbing products
Energy Saving Energy efficiency improvement by relocating servers to outside data centers
Installation of car navigation systems with environmentally-friendly driving systems
Energy efficiency improvement of land transportation of marine container
Reduction of fossil fuel by renewal of sewage sludge dryers
Switch to cooperative delivery
Introduction of high efficiency refrigerant processing facilities
Construction of or renovation for energy-saving houses
Use of concrete containing less portland cement
Fuel switch from fossil fuel or grid power to biomass solid fuel (woody biomass fuel)
Introduction of solar power generation
Renewal of heat source equipment utilizing renewable heat
Fuel switch from fossil fuel or grid power to biomass liquid fuel (BDF, bioethanol, biooil)
Renewable Fuel switch from fossil fuel or grid power to biomass solid fuel (biomass solid fuel from sewage
Energy sludge)
Introduction of hydroelectric power generation
Fuel switch from fossil fuel or grid power to biogas
Introduction of wind power
Renewal of electric power facility utilizing renewable heat 15
 Approved Methodologies ③
Type of
Methodologies
methodologies
Switch cover gas in casting magnesium from SF6 to lower GWP gases
Introduction of recovery and degradation systems of N2O used for anesthesia
Industrial
Gas switch from SF6 to COF2 in the liquid crystal display production process
Process
Introduction of GHG-free insulated switchgears
Reduction of HFC gas in spray duster cans used for equipment maintenance
Abatement of N2O emissions from pig and broiler excreta disposal by utilizing low-protein feed
Conversion of disposal management system for livestock excreta
Agriculture
Mitigation of N2O emissions from tea land soil by applying chemical fertilizers containing nitrification
inhibitor
Reduction of fossil fuel for incineration by reducing volume of sludge utilizing microbially-activated
Waste solvent
Transition of food waste treatment from landfilling to composting
Forest management activity
Forest Sink
Afforestation activity

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 Programme of activities

Can add continuously Programme of activities

Project participants ①Registration of projects

②Certification of credits

J-Credit
(e.g.)Houses with Solar Power Generation Certification
Committee

Registration, Certification

Credits ・Management of programme of activities

Examination ・Execution of J-credit process
Validation, Verification
Authorities
①Validate PDD
②Verify Monitoring Report Facility managers
Suppliers,
Sales and maintenance
companies,
Energy Service Companies
NGOs, Local governments,
Merits of programme of activities etc.
①Prepare a system for management of project properly
②Examine each emission reduction for compliance
rules below
1) Fulfill requirements of project
2) Each emission reduction avoid double registration
3) Amount of Each emission reduction is under 500t-CO2/y
4) All emission reduction fulfill Same methodologies
③Execute process of projects

1) Facility Managers can add new participants continuously after registration of the projects.
2) Reduction of Examination fees (Usually, each projects should be examined individually.)
3) Reduction of workload of project participants
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3. Facts & Figures
 Registration of Project and Certification of Credit
●The number of project registration: 282 (Expected emission reduction by 2030: 10.4Mt-CO2)
●The number of credit certification: 526 (Certified credit in total：4.6 Mt-CO2)
●The number of renewable energy: 5,450,390 (MWh)

(As of February, 2019)

＜The cumulative number of projects in J-credit scheme ＞
700
626
597
600 556
Registered projects
519
Credit-certified projects 493
500 468
415
400 384
368
349 363
299
275 277 282
300
249 260 266 273
232 230 235
195 208 208 216 216
200 184176 176 182 187 190
161
144
115 116 124134
119 128
89 102
100 64 68 71 82 74
50 51 58 63
22 29 35
50 92 4 8 11 15 21
0
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32h…
2013 2014 2015 2016 2017 2018

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 Expected emission reduction from registered projects

Other than programme of activities Programme of activities

Fuel switch from Others, 99,

fossil fuel or grid Introduction of high efficiency air Others, 18, 65.4kt-
116.3kt-CO2 CO2
power to biogas , 6, conditioning facilities, 5, 134.3kt-CO2
41.4kt-CO2 Introduction of
Introduction of high electric vehicles, 3,
313.0kt-CO2 Introduction of co-
efficiency industrial generation
furnaces, 3, 64.8kt- equipment, 7,
CO2 346.8kt-CO2
Introduction of high
efficiency boilers, Introduction of high
52, 183.2kt-CO2 efficiency lighting
facilities, 10,
Total 511.0kt-CO2
Forest 1,849.1kt-CO2 Total
management 6,691.9kt-CO2
activity, 25,
Fuel switch from
258.7kt-CO2
fossil fuel or grid Introduction of solar
power to biomass power generation,
solid fuel (woody 32, 5,321.3kt-CO2
biomass fuel), 48,
1,184.8kt-CO2

(As of February, 2019)

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4. Application
 Using the J-Credit for reporting to the CDP questionnaire

The purchased credit resulting from renewable energy, can be reported

as your company's renewable energy amount

J-Credit Scheme HP "The list of credits for sale"

(as of August, 2017)

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 Trading J-Credits – How to Buy and Sell the Credits –
J-Credits can be sold and purchased at:
- bilateral negotiations; and
- the official auctions.
For those who need to buy and sell J-Credits, the J-Credit Scheme website* provides:
- list of credits on sale for bilateral negotiations; and
- information on the official auctions.
■Official Auctions * https://japancredit.go.jp/market/corner/
The official auctions held by the J-Credit Scheme Secretariat provide opportunities to
purchase J-credits including government-owned ones. Contract Prices and trading volume
are determined through successful bids.

Average prices at the past auctions are as follows:

Time Average price**
June, 2016 510 yen/t-CO2
January, 2017 1,594 yen/t-CO2
April, 2017 908 yen/t-CO2
March, 2018 Renewable Energy Energy saving and others
1,716 yen/t-CO2 1,148 yen/t-CO2
April, 2018 Renewable Energy Energy saving and others
1,724 yen/t-CO2 1,395 yen/t-CO2
** The average prices are calculated by dividing the total contract amount (yen) by the total
traded volume (t-CO2) at each auction. 23