Information Updated!!
| Please be informed that it might be possible for NEDO to conduct negotiations in English and accept Emission Reduction Purchase Agreements (ERPA) based on English Law for promising proposals. |
NEDO Launches “Kyoto Mechanisms Credit Acquisition Program”
(Jan 11, 2007)
The New Energy and Industrial Technology Development Organization (NEDO) has been commissioned by the Japanese government to launch a “Kyoto Mechanisms Credit Acquisition Program” (KMCAP) starting this fiscal year to commence the acquisition of emission reduction credits.
(FY2006 Project Budget: 5.4 billion yen)
(FY2006 Maximum Funds for Credit Acquisition: 12.2 billion yen)
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- Purpose
Japan is promoting comprehensive efforts to achieve its Kyoto Protocol target of reducing greenhouse gas emissions 6% below the 1990 level during the first commitment period of 2008 to 2012. Within the Kyoto Protocol, which came into force in February 2005, three flexibility mechanisms, now commonly referred to as “Kyoto Mechanisms,” were approved in order to assist countries efforts in meeting their emission reduction targets and to lower the overall cost of target attainment.
The three mechanisms are 1) the Clean Development Mechanism (CDM), wherein Annex I countries employ advanced technologies and fund emission reduction projects in Non-Annex I countries, resulting in the acquisition of emission reduction credits, 2) Joint Implementation (JI), wherein emission reduction credits are acquired through joint emission reduction projects among Annex I countries, and 3) Emissions Trading (ET), wherein emission reduction credits can be acquired or sold internationally.
In order for Japan to achieve its Kyoto Protocol target, the best efforts of private citizens and companies in every sector will be necessary, in combination with domestic GHG emission reduction countermeasures as well as the use of “carbon sinks.” However, even with the utmost domestic efforts, it is anticipated that Japan would still fall short of its Kyoto Protocol commitment by 1.6%. To offset this shortfall, Japan will need to utilize the above-mentioned Kyoto Mechanisms.
To do so, the Ministry of Economy, Trade and Industry (METI) and the Ministry of the Environment (MOE) have commissioned NEDO to acquire emission reduction credits. NEDO is implementing the “Kyoto Mechanisms Credit Acquisition Program” under the basic principles of (1) acquiring credits in a cost effective manner while reducing credit acquisition risks, and (2) preventing global warming by supporting sustainable development in Non-Annex I countries.
- Overview
Of the three Kyoto Mechanisms, NEDO expects to primarily utilize the Clean Development Mechanism. Within this framework, NEDO aims to acquire secure and cost-effective credits, sufficient to achieve its target, through two different methods:
Acquisition as a project participant (Figure A): Engage as a project participant in emission reduction projects and enter into credit-sharing Emission Reduction Purchase Agreements (ERPAs) with project developers, thereby acquiring credits directly from the United Nations Clean Development Mechanism Executive Board.
Acquisition from project implementers (Figure B): Acquire credits through entering into ERPAs on a resale basis with project implementers who have acquired or who are expected to acquire credits in the future. While payment for credits is made upon delivery, in principle, up-front payments can be made, subject to contract terms.
Project implementers are selected through requests for proposals in order to ensure transparency and cost-effective credit acquisition.
| Acceptance of proposals: |
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Year-round acceptance of proposals began on July 21, 2006. |
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| Contacts: |
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Mr. T. Eto, Mr. H. Yoshioka, Mr. S. Fukuda, Ms. C. Kawakami, Ms. A. Baba
Kyoto Mechanisms Promotion Department
Tel: +81-44-520-5185 Fax: +81-44-520-5196
E-mail: nedokp2006@nedo.go.jp
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