On June 18, 2007, the New Energy and Industrial Technology Development Organization (NEDO) launched the "FY2007 Kyoto Mechanisms Credit Acquisition Program"(KMCAP)[PDF:119KB]to commence the acquisition of emission reduction credits for this fiscal year.

1. Purpose
     Japan is promoting comprehensive efforts to achieve its Kyoto Protocol obligation 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 to meet 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, 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.




1.	Of which 12.2 billion yen has been allocated for credit purchases and which is included in "FY2007-2013 Budget"
2.	Maximum amount that can be contracted in FY2007 for credits to be delivered between FY2007-2013.



2. Overview of credit acquisition process
     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 from credit issuers (Type A): NEDO, as a project participant, acquires credits directly from credit issuers (UNFCCC CDM Executive Board (EB) and Annex I countries (JI and GIS)). NEDO signs Emission Reduction Purchase Agreements (ERPA) with other project participants or it signs agreements with Annex I countries in the case of GIS.
     Acquisition from project implementers and others (Type B): NEDO purchases credits under ERPA from project implementers and others who have acquired or will acquire credits.
   
   Project implementers are selected through requests for proposals in order to ensure transparency and cost-effective credit acquisition.
   
   Acceptance of proposals:
         Year-round acceptance of proposals began on June 7, 2007.
   
   Please be aware that it is possible for NEDO to conduct negotiations in English and accept Emission Reduction Purchase Agreements (ERPA) based on English Law for promising proposals once all necessary initial documentation has been submitted to NEDO in Japanese.
   
   

   Contacts and Inquiries:
   	Mr. T. Eto, Mr. S. Fukuda, Mr. K. Ichinose, Ms. A. Baba Kyoto Mechanisms Promotion Department Tel: +81-44-520-5185 Fax: +81-44-520-5196 E-mail: km-ap@nedo.go.jp