Guidelines for Measurement, Reporting and Verification of GHG Emission Reductions in JBIC's GREEN (the "J-MRV Guidelines")

Following enforcement of the act to revise part of the Japan Finance Corporation Act (the Revised JFC Act) in March 2010, JBIC has launched the "Global action for Reconciling Economic growth and ENvironmental preservation (GREEN)" to support projects aiming to prevent global warming.

For this financial instrument, JBIC also established Guidelines for Measurement, Reporting and Verification of greenhouse gas (GHG) Emission Reductions in JBIC's GREEN (the "J-MRV Guidelines").

The J-MRV Guidelines were established, based on proposals of the Working Group in late May, consisting of outside experts. Considering lessons learned from the Kyoto Mechanisms and ISO (International Organization for Standardization) standards, the Working Group made the proposals aimed to make simple, practical and internationally acceptable guidelines for quantifying GHG emission reductions.

JBIC will continue improving the J-MRV Guidelines by lessons learned from application to JBIC's operations as well as taking account of international discussions on measurement, reporting and verification of GHG emissions.

In case of co-financing with any other institutions, such as Multilateral Development Banks, who have their own quantification measures of emission reductions, JBIC may consider to use their quantification measures if they are proved to be viable and reliable.

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Outlines of the J-MRV Guidelines

Scope

Objective

  • JBIC aims to support efforts of developing countries in preventing global warming through financing projects aiming to reduce emission of GHG under GREEN by using simple and practical quantification measures for emission reductions.

Eligible Projects

  • The J-MRV Guidelines are, in principle, applied to all projects seeking to prevent global warming under GREEN, including those financed through credit lines that JBIC provides to financial institutions and those financed through funds in which JBIC participates.
  • JBIC will measure emission reductions of the GHGs as set forth in the United Nations Framework Convention on Climate Change (UNFCCC). The GHGs other than CO2 such as Methane, Nitrous oxide, Hydrofluorocarbons, Perfluorocarbons, and Sulphur hexafluoride will be converted in terms of CO2 equivalent tons.

Principles and Procedures

Emission Reductions

Emission reductions = Baseline emissions - Emissions of the projects

Baseline Emissions

The baseline emissions are determined by considering from various aspects such as the investment circumstances of the project, the availability and reliability of the data, and with reference to the following options. As necessary, theoretical values and estimates based on sampling results may be also used. Also, in case of a project involving expansion of production capacity, the baseline emissions are, in principle, determined as adjusted to the expanded capacity.

  • Case A: Renovation and Improvement of Existing Facilities
    Options;
    • The emissions of the project before renovation or improvement of the existing facility
    • The emissions of similar projects with widely used facilities
    • The emissions of similar projects with recently-installed facilities
  • Case B: Installing New Facility
    Options;
    • The emissions of similar projects with widely used facilities
    • The emissions of similar projects with recently-installed facilities
    • The emissions determined based on the grid emission factors in the host country or region

Provisions for Various Effects

In cases of the insignificant effect within the project boundary, significant effect outside of the project boundary (leakage), or multiple emission sources shall follow as specified in the J-MRV Guidelines.

Procedures under the J-MRV Guidelines

Prior to JBIC Financing Decision

  • JBIC shall calculate planned emission reductions (difference between the baseline emissions and expected emissions) in project preparation stage with reference to feasibility study reports.
  • JBIC shall agree a monitoring plan (monitoring items and methods) with the borrower or the project proponent.

After JBIC Financing Decision

  • The borrower or the project proponent shall measure emissions of the project according to the monitoring plan, at the time of completion of construction/installation of the project ("Completion") and more than one year after the Completion, and report them to JBIC.
  • Upon receiving the report on measurement results above, JBIC shall calculate and conduct verification of the emission reductions of the project promptly.

Outside Experts

JBIC may retain outside experts if necessary, including consulting firms, for calculation of emission reductions of the project in accordance with the J-MRV Guidelines. JBIC may also seek opinions of the Advisory Committee below to review the results of application of the J-MRV Guidelines and advise on appropriateness of the relevant J-MRV Guideline processes for calculation and verification of the GHG emissions, in relation to a particular project or generally and make decisions on financing the projects.

The Advisory Committee

The Advisory Committee shall be established to administer the J-MRV Guidelines efficiently. It shall consist of not more than seven (7) experts on CDM, ISO and energy-utilizing projects, appointed by JBIC. The Advisory Committee shall submit opinions to JBIC on the following matters upon request from JBIC;

  • The amount of emission reductions attributable to the projects under the J-MRV Guidelines;
  • The provisions of the J-MRV Guidelines and methodologies under the J-MRV Guidelines (as revised from time to time) and other related matters;
  • Other matters necessary for efficient implementation of the J-MRV Guidelines; and
  • An annual review of the principles on which the methodologies under the J-MRV Guidelines are based.

Advisory Committee Members

  • Mr. Atsushi Kurosawa (The Institute of Applied Energy)
  • Mr. Yasuki Shirakawa (Climate Consulting, LLC)
  • Mr. Tsuyoshi Nakao (ERM Japan Ltd.)
  • Mr. Kuniyuki Nishimura (Mitsubishi Research Institute, Inc.)
  • Mr. Ryuji Matsuhashi (The University of Tokyo)
  • Mr. Shunsuke Managi (Kyushu University)
  • Mr. Kazuhito Yamada (Pacific Consultants Co., Ltd.)

Please note that the member's professional affiliations shown above are as of their appointment in 2016.