October 12, 2022
TOKYO – A Japan-led offset credit trading framework to reduce greenhouse gas emissions will be launched at the 27th Conference of the Parties to the U.N. Framework Convention on Climate Change (COP27) in Egypt next month.
More than 30 countries and international organizations are expected to participate in the framework.
The Japanese government hopes a framework it has been working on independently will become an international standard. It also hopes to capitalize on Japan’s decarbonization technology overseas.
Under the framework, if a developed country provides a developing country with technology or financial assistance that leads to a reduction in greenhouse gas emissions, a portion of the reduction can be credited to the developed country.
The mechanism was stipulated in Article 6 of the Paris Agreement adopted at COP21 in 2015. Implementation guidelines for the article were agreed upon at COP26 last year.
Under the framework, developed countries will be able to reduce greenhouse gas emissions efficiently, and developing countries will be able to improve decarbonization technology.
Once trading gets into full swing, an estimate indicates emissions will be reduced by up to 9 billion tons a year, about 30% of global emissions, by 2030.
Japan has pioneered efforts toward such a framework. Under the Joint Crediting Mechanism established in 2013, Japan has launched more than 200 projects in 22 countries mainly in Asia, Africa and Latin America, supporting the introduction of renewable energy power generation. Many Japanese companies have participated in these projects.
In Bac Ninh Province, Vietnam, a large-scale waste-to-energy plant is being constructed by Japanese companies including JFE Engineering Corp. Instead of burning fossil fuels, the power plant will incinerate 500 tons of waste per day and use the heat from the incineration to generate electricity.
The project is expected to reduce carbon dioxide emissions by about 41,800 tons a year, part of which will be factored into Japan’s emissions reduction tally.
Ahead of the launch of the Japan-led framework, 19 nations including Britain, Germany and India, and 14 international organizations, including the World Bank and the U.N. Development Program, attended a meeting in Kanagawa Prefecture last month.
The Japanese government hopes more than 100 countries will adopt the new framework, which is aimed at helping partner countries by providing them with knowledge acquired through the Joint Crediting Mechanism, as well as positioning Japan as a leading player in global decarbonization efforts.