The Implementation of the Market Based Mechanisms in Indonesia a - PowerPoint PPT Presentation

The Implementation of the Market Based Mechanisms in Indonesia a JCM Case Study Dicky Edwin Hindarto Indonesia JCM Secretariat

Current market based mechanisms in Indonesia CDM VCS Domestic Scheme Carbon Tax • • • • Giving very high Relatively small compare Still in the very The Energy Security expectation in the to CDM, but still growing preliminary stage. Fund/Levy is planned to • beginning, very difficult smoothly. High expectation to have be established. • • and complex to be Indonesia has the biggest the domestic scheme in This is a very good implemented, and REDD+ project under the Indonesia, but it will need opportunity for the suddenly everything was VCS, there is until now the very strong government Carbon Tax stopped due to the lack of only land based project support. Implementation. • demands, now we have under Indonesia VCS It is expected to be one of Indonesia Indonesia no new projects for CDM. development. the alternative for the • • The credits were Some of the CDM projects market based mitigation INDC INDC transferred to the buyer change to be VCS projects actions. countries, while in because of the lack of Mar Market et and non and non Indonesia we only receive CER’s demand from EU- market mar et appr pproac oaches hes co-benefits of the ETS and other countries. implementation. The JCM Scheme • The Joint Crediting Mechanism currently is the most progressive market based mechanism and climate change mitigation activities in Indonesia and in the world. • It is not only about the bilateral carbon trading, but rather how to develop and JCM is the newest market implement the green investment as well as low emission development and based mechanism to be technology transfer between the 2 countries. developed, but the fastest • Japan and Indonesia have their own national target on emission reduction to be growing in the world achieved, and it can be done through JCM, the emission reduction can be shared. • Both countries are required to increase their economic development as well as develop more opportunities for their private sectors to grow.

JCM basic Concept • The Joint Crediting Mechanism as a G-to-G scheme which encourages private sector organizations to invest in Low Carbon Development activities in Indonesia through incentive from the Government of Japan. • JCM cooperation is not only conducted by Japan and Indonesia, but also with other 16 developing countries. • Bilateral Cooperation on the Joint Crediting Mechanism for the Low Carbon Growth Partnership between the Republic of Indonesia and Japan has been signed by the Coordinating Minister for Economic Affairs of Indonesia and Minister for Foreign Affairs of Japan. • Objectives of the JCM: 1.Facillitate diffusion of leading low carbon technologies, products, systems, services, and infrastructure as well as implementation of mitigation actions, and contributing to sustainable development of developing countries. 2. Evaluate contributions to GHG emission reductions/removals from developed countries in a quantitative manner, through mitigation actions implemented in developing countries and use those emission reductions or removals to achieve emission reduction targets of the developed countries. 3. Contribute to the ultimate objective of the UNFCCC by facilitating global actions for emission reductions or removals.

JCM scheme Japan Notifies Joint Committee Notifies Indonesia registration registration Government of projects of projects Government Secretariat Issuance of credit Report Report Issuance of credit issuance Japanese Indonesian issuance of credits of credits Side Side communication Request registration of Request registration of projects projects Request Request Third Party Entities issuance of issuance of credits • Validate projects credits • Verify amount of Submit PDD / Submit PDD / GHG emission monitoring monitoring report report reduction or removal Project Participants Project Participants Inform results Inform results of validation / of validation / Implementation & Implementation & 4 verification verification monitoring of monitoring of Implement project together projects projects May contact TPE and Secretariat through one Contact Entity

JCM feasibility studies in Indonesia The JCM FS scheme provides financing funded by the Ministry of Environment Japan (MoEJ) and Ministry of Economy, Trade and Industry Japan (METIJ)

List of JCM implemented project (1) Estimated Annual No Project Entities Emission Reduction (tCO2) 1 Remote Auto-Monitoring System for Thin-Film Solar Power Sharp & PLN 1,433 Plant in Indonesia 2 Energy Saving by Optimum Operation at Oil Refinery Yokogawa & Pertamina 3,400 3 Utility Facility Operation Optimization Technology Azbil & Pertamina 58,000 4 The low carbonization of mobile communication’s BTS (Base KDDI Corporation, Ernst & Young 163 Transceiver Station) by the Introduction of “TRIBRID Sustainability Co., Ltd. , PT. Packet system” in Indonesia. Systems Indonesia , and PT Huawei Services 5 Power generation by waste heat recovery in cement JFE Engineering Corporation & PT 122,000 industry Semen Indonesia Tbk 6 Energy Savings at Convenience Stores Lawson & PT Midi Utama Indonesia, Tbk 396 7 Energy saving through introduction of regenerative burners Toyotsu Machinery Corporation, PT 856 to the aluminum holding furnace of the automotive Yamaha Motor Parts Manufacturing components manufacturer Indonesia, Hokuriku Techno Co. Ltd., PT Matahari Wasiso Utama 8 Solar power hybrid System installation to existing base ITOCHU Corporation & PT 2,786 transceiver stations in off-grid area Telekomunikasi Selular 9 Energy saving for textile factory facility cooling by high Ebara Refrigeration Equipment & 118 efficiency centrifugal chiller System Co., PT Nikawa Textile Industry, PT Ebara Indonesia 10 Energy saving by double bundle-type heat pump Toyota Tsusho Corporation & PT TTL 170 Indonesia

List of JCM implemented project (2) Estimated Annual No Project Entities Emission Reduction (tCO2) 11 Introduction of High efficient Old Corrugated Kanematsu Corporation & PT Fajar 14,884 Cartons Process at Paper Factory Surya Wisesa Tbk 12 Reducing GHG emission at textile factories by Toray Industries, Inc, PT Indonesia 566 upgrading to air-saving loom Synthetic Textile Milles (ISTEM) / PT Easterntex / PT Century Textile Industry Tbk (CENTEX) / PT Toray Industries Indonesia (TIN) 13 Energy saving for air-conditioning and process Ebara Refrigeration Equipment & 117 cooling at textile factory Systems & PT Primatexco Indonesia 14 Energy Saving for Shopping Mall with High NTT Facilities, INC & PT. Pakuwon Jati 925 Efficiency Centrifugal Chiller Tbk 15 Energy Saving for Industrial Park with Smart NTT Facilities, INC dan PT. Maligi LED Street Lighting System Permata Industri Estate, PT. Harapan 900 Anang Bakri & Sons, PT. Karawang Tatabina Industrial Estate 16 Energy saving by introduction of high Mitsubishi Plastics, INC & PT. MC Pet 429 efficiency once-through boiler system in a film Film Indonesia factory 17 REDD+ Model Project in Boalemo District Kanematsu Corporation & PT. Gobel 100,000 Group DKM)

List of JCM implemented project (3) Estimated Annual Emission No Project Entities Reduction (tCO2) 18 Installation of Gas Co-Generation System Toyota Tsusho Corporation & PT Toyota 20,439 for Automobile Manufacturing Plant Motor Manufacturing Indonesia 19 Jakabaring Mega Solar Power Plant Project Sharp Corporation & local company 1,265 20 Introduction of high efficiency once- Sumitomo Rubber Industries, Ltd, & PT 380 through boiler and RO Sumi Rubber Indonesia pure water system in golf ball factory 21 Energy saving for air-conditioning and Ebara Refrigeration Equipment & 116 process cooling by Introducing High- Systems, Nippon Koei, dan PT efficiency Centrifugal Chiller Primatexco Indonesia Registered projects 22 Project of Introducing High Efficiency Mayekawa Manufacturing Co., Ltd, PT 120 Refrigerators to a Food Industry Cold Adib Global Food Supplies, PT Storage in Indonesia Mayekawa Indonesia 23 Project of Introducing High Efficiency Mayekawa Manufacturing Co., Ltd, PT 21 Refrigerator to a Frozen Food Processing Adib Global Food Supplies, PT Plant in Indonesia Mayekawa Indonesia Total Estimated Annual Emission 329,483 Reduction In 2 years In s we have received about 41 mi millions s USD JCM sub subsi sidy y fr from m Japan Governme ment and generate about 70 mil millions s USD fr SD from In m Indonesi sia priva vate sectors! The average abatement cost is more than 200 USD per ton CO2….

JCM project implementation (1) 30.6 MW power generation by waste heat recovery at cement factory USD 12 million/year No. DESCRIPTION SHARE REMARKS 1. INVESTMENT COST 49.05% Major equipment supply, supervision > Foreign scope Local installation, civil buidling, local 50.95% > Local scope fabrication, dust conveying, water treatment plant TOTAL INVESTMENT 100.00% 2. NET INVESTMENT 81.56% 3. SUBSIDY (from JCM) 18.44% (from JCM) Total Investment: IDR 638 billion (51 Lower investment index (Rp/kW) by utilization of JCM million USD), Japan government JCM subsidy scheme is around 11 million USD.