The experiences of JCM scheme

implementation in Indonesia from

2013-2018

Dicky Edwin HindartoIndonesia JCM Secretariat

Indonesia NDC: The biggest opportunities is in forestry sector whilst the fastest growing emission is energy

Sector

GHG Emission

level 2010*(MTon CO2e)

GHG Emission Level 2030

GHG Emission ReductionAnnual Averag

eGrowth

BAU(2010-2030)

Annual Averag

e Growth2000-2012

BaU CM1 CM2

MTon CO2e %Total BAU

CM1 CM2

CM1 CM2

Energy* 453.2 1669 1355 1271 314 398 11% 14% 6.7% 4.5%

Waste 88 296 285 270 11 26 0.38% 1% 6.3% 4.00%

IPPU 36 69.6 66.85 66.35 2.75 3.25 0.10% 0.11% 3.4% 0.10%

Agriculture 110.5 119.6

110.4 115.9 9 4 0.32% 0.13% 0.4% 1.30%

Forestry** 647 714 217 64 497 650 17.2% 23% 0.5% 2.70%

TOTAL 1334 2869 2034 1787 834 1081 29% 38% 3.9% 3.20%

*Including Fugitive **Including Peat Fire

CM1 = Counter Measure (Unconditional Mitigation Scenarios)CM2 = Counter Measure (Conditional Mitigation Scenarios)

Energy demand growth in Indonesia is still very depended on

economic and population growth. Energy efficiency and renewable

energy implementation must be enhanced!

Private sectors barriers on implementing climate change mitigation actions

TechnologyFinancing

Regulation

Information

Awareness

Capacity • The most challenging aspect for private sector to implement mitigation actions is financing.

• Financing, technology, and capacity building need to be supported by other parties.

• Government has limited budget and capacity to support these.

Basic concept of JCM

The Objective of JCM

▪ Facilitate 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.

▪ 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.

▪ Contribute to the ultimate objective of the UNFCCC by facilitating global actions for emission reductions or removals

The JCM cooperation scheme

39 private companies

2 Stated Owned Companies

More than 100 companies are involved in JCM projects and FS

Indonesian Ministries

Indonesian Regional

Government

Japan Ministries

Japanese Private Sectors

State Owned Company

Indonesia Private Sectors

Third Party Entity 11 companies

Institutions related to JCM implementation

JCM City-to-City scheme

7

Large-scale Feasibility Study(In line with the city master plan)

Project implementation

The

JCM

larg

e-sc

ale

sch

eme

par

tici

pan

t

Bilateral Cooperation

City in Indonesia City in JapanCooperation (LoI, MoU)

Indonesia Entities Japan Entities

Indonesia Japan

Collaboration between private companies, NGO, CSO and Universities

The Implementation of City to City Collaboration: It is still on-going

City-to-City Cooperation

Surabaya & Kitakyushu

Bandung &

Kawasaki

Batam & Yokohama

Semarang and

Toyama

JCM financing schemes

Model Project

50%50%

Subsidized by MOE Investment by Participants

MOEJ

ADB

JFJCM(Trust Fund)

OCR/ADF*

JCM Credits

Grant

Loan/Grant etc.

* OCR: Ordinary Capita lResources, ADF: Asian Development Fund

Project

Additional costs with adoption of

advanced low-carbon technologies

Mitigation through conventional technologies(Selection frompipeline projects)

MRV

Other financial institutionsand funds Loan/

Grant etc.

Co-financing

Contribution

Total Cost of the installation

GHGEmission

Reduction

Subsidized by METI

Total investment is discussed and negotiated with METI

Up to more than 50%

ADB Trust Fund – JFJCM

Demonstration Project

Investment by Participants

Total investment of JCM implementation in Indonesia

1 2Grant for

Feasibility Study

10 mio US$

Study and Partnership with several institutions in Japan and Indonesia

Total investment of Projects Implementation

132 Mio US$ for

31 projects (12 of it had been accomplished)

62 Mio US$ of Government of Japan Subsidy

70 Mio US$ of Project Participants investment

sustainable development and emission reduction

Feasibility Study

*Per 2017, 115 feasibility studies have been conducted;

1

1

1

1

2

2

1

1

6

7

4

7

3

5

6

7

10

4

4

1

3

1

2

8

8

3

1

2

1

2

1

2

2

1 2

1

1

0 5 10 15 20 25 30

2010

2011

2012

2013

2014

2015

2016

2017

Feasibility Studies Conducted in 2010-2017

Agriculture Carbon Capture & StorageLULUCF & REDD-plus Energy EfficiencyFugitive Emission Large-scaleLow-Carbon City Renewable Energy

Step by step of JCM scheme

Measurement

Reporting

Verification

JCM infrastructure in Indonesia

Guideline:1. Project Design

Document2. Proposed

Methodology3. Third Party Entity4. Validation and

Verification5. Sustainable

Development Implementation Plan and Report

Procedure: Project Cycle Procedure

Rules: 1. Rules of Implementation2. Rules of Procedure for JC

Registry system

Methodologies:15 methodologies of energy

efficiency and renewable energy have been developed

ISO 1

40

65

base

d

*Methodology and guideline are the most important infrastructure aspect for SD and emission reduction implementation*

All projects must pass SDIP and SDIRprocedures

Sustainable Development Implementation Plan (SDIP)

Sustainable Development Implementation Report

(SDIR)

Sets out a plan of the JCM project to contribute to sustainable development based on ex-ante analysis

Sets out the achievement of SDIP implementation for a particular monitoring method

7 sustainable development items considered in JCM:

Environmental Impact Assessment

Pollution Control Safety and Health Natural Environment and Biodiversity

EconomySocial Environment and

Community ParticipationTechnology

Energy Saving at Convenience Stores

PT. MIDI UTAMA INDONEISIA Tbk

LAWSON, INC

Expected carbon emission reduction 28,5 ton CO2/year

per store

In this project, 12 Alfa Midi stores installed a highly efficient cooler installation, air conditioning, LED lamp. Through the implementation of the project, they are able

to reduce electricity consumption to up 25% of the total electricity demand.

12 Alfa Midi at Jakarta,Bekasi, Tangerang, Depok

Energy Saving at Convenience Stores

12 Alfa Midi at Jakarta,Bekasi, Tangerang, Depok

Installation of Solar Power System and

Storage Battery to Commercial Facilities

AEON Mall Indonesia

Itochu Corporation

Expected carbon emission reduction 549 ton CO2/year

500 KW Installation of Solar Power System and Storage Battery to Commercial Factory. The recently-operated Rooftop Solar Power generates 500 KW electricity

for lighting system in shopping center.

Aeon Mall, Jakarta Garden City, Cakung, East Jakarta

Installation of Solar Power System and

Storage Battery to Commercial Facilities

Aeon Mall, Jakarta

Garden City, Cakung, East

Jakarta

Reducing GHG Emission at Textile Factories by

Upgrading to Air-saving Loom

PT. EASTERNTEXPT. INDONESIA SYNTHETIC TEXTILE MILLSPT. CENTURY TEXTILE INDUSTRY TBK

TORAY INDUSTRIES, INC. TORAY INTERNATIONAL, INC

Expected carbon emission reduction 566 ton CO2/year

“JAT 810” system used in the textile factory, is able to reduce air supply consumption up to 20% which directly reflect to the electricity consumption on the air-compressor system . This utility is installed in 3 textile factory at Banten,

Jakarta, and East Java.

Banten, Jakarta, & East Java

Reducing GHG Emission at Textile Factories by

Upgrading to Air-saving Loom

Banten, Jakarta, & East Java

Solar PV Power Plant Project in Jakabaring Sport

City

PDPDE SUMATERA SELATAN

SHARP CORPORATION

Expected Carbon Emission Reduction 1.303 ton CO2/year

This solar power installed in Jakabaring sport center is able to generate electricity of 2 MW. This project is prepared for the electricity supply in Asian Games 2018

and promotes green sport event in South Sumatera. The project is expected to be completed in end of February 2018.

Jakabaring Stadium, Palembang South Sumatera

Solar PV Power Plant Project in Jakabaring Sport

City

Jakabaring Stadium, Palembang South Sumatera

Power Generation by Waste-heat Recovery in

Cement Factory

PT. Semen IndonesiaTbk

JFE Engineering Corporation

Expected carbon emission reduction 122.000 ton

CO2/year

32 MW Waste Heat Recovery Power Generation at Cement Factory. 4factory units at PT Semen Indonesia in Tuban are able to capture its flue

gases emission which is a hot 400 degree celcius air to be used as boiler to generate electricity. This system enables to reduce electricity consumption

up to 25% of the total electricity required in the factory.

PT. Semen Indonesia at Tuban, East Java

Installation of Gas Co-generation System for

Automobile Manufacturing Plant

PT. Toyota MotorManufacturing Indonesia

Toyota TsushoCorporation

Expected Carbon Emission reduction

20.310 ton CO2/year

8 MW cogeneration system at PT. Toyota Motor Indonesia.This cogeneration system is able to deliver 30% of the total factory

electricity demand and also replaces the needs of utilising the other two boilers.

PT. Toyota Mobile Manufacturing Indonesia, Karawang, West Java

Installation of Gas Co-generation System for

Automobile Manufacturing Plant

PT. Toyota Mobile Manufacturing Indonesia, Karawang, West Java

Power Generation by Waste-heat Recovery in

Cement Factory

PT. Semen Indonesia at Tuban, East Java

City-to-City Cooperation

Surabaya and Kitakyushu City-to-City Cooperation

Nishihara: Waste Management Project

• A collaboration between Nishihara Co. with Dinas Kebersihan dan Pertamanan (DKP) Surabaya

• In 2013, the FS is registered under the JCM scheme. In the subsequent year it has no longer registered under the JCM however the collaboration is still continue until now.

The sister-city scheme allows collaborations between cities in Indonesia and Japan even without involvement of JCM scheme

Nishihara DepoHandling 20 tons of waste daily whereby 85%of the waste is selected for resale. Currentlythe management is transferred to DKP

Nishihara Composting CenterStarted its operation in 2015 with support fromJICA. Handling 8 tons of waste from 4 traditionalmarket and parks in Surabaya daily

City-to-City Cooperation

Surabaya and Kitakyushu City-to-City Cooperation

Energy Saving for Air-Conditioning at Shopping Mall with High Efficiency Centrifugal

Chiller

PT. PAKUWON JATI,Tbk

NTT FACILITIES,INC

Expected carbon emission reduction 966 ton CO2/year

NTT Facilities dan PT. Pakuwon Jati Tbk, worked together to implement a highly efficient chiller (centrifugal chiller). This chiller is able to reduce electricity usage of 1.136 MW/year. This chiller is utilised for the shopping center air-conditioner

operational usage.

Mall Tunjungan Plaza, Surabaya, East Java

Some challenges on Indonesia JCM implementation(and other climate change mitigations)

Reliability of New TechnologyBecause of most of the technologies are new, it requires more analysis in risk management, feasibility and other impact of implementing the technology. A success story of the partner or a demo project is very helpful in this situation.

High Initial Capital CostsEnvironment friendly technology usually more pricey than conventional one. In some cases cash flow is more important than economic value.

Technical BarrierThe management has to assess the integration of new technology to their existing equipment & system.

Clarity of future Cost & ResponsibilitiesThe Management has to ensure that the future liability, responsibilities, or other consequences doing the projects are identified and clearly states which will bear the cost/responsibility.

Environmental AwarenessThe awareness and attention to environmental issues have to be well developed in top management before the decision to do CDM, JCM or other “Environmental Friendly Initiatives”.

Currency RiskIndonesia has experienced currency crisis in the past, this has actually createda serious impact on some companies/project during that times. This situation forced the Top Management to be more cautious in the decision making.

Carbon Credit SharingThe management needs time to understand and analyze the utilization of carbon credit since this is new thing for them. Also possibility to claim the ownership of the credits could be an issue.

Procurement RiskIndonesia is still in the development stages of Procurement Practices especially in Government and State Owned Enterprises.

Relationship & Trust to PartnerIn many cases, the partner should have proven achievement to convinced the management, but that is not enough. The Partner should also convinced that the localcompany will also enjoy the result and benefit of the projects.

Transparancy and Accountability In some cases, Indonesia project participant candidates are very difficult to be transparant in their business processes and financial system.

Communication and Understanding Among MinistriesIt is a fact that one of the most difficulty to develop a new initiative in Indonesia is the government acceptance. The scheme should be well understand among ministries and government stakeholders in order to enhance acceptance and ownership.

Regulatory BarrierBoth participant have to be sure that the implementation is comply with all related regulations & policies, including that related to the new national and international climate policies.

Communication and JCM

Most of the challenges were caused by lack of communication between stakeholders and lack of capacity. In this regard, we developed communication strategy and implemented communication activities to solve the challenges and promote JCM scheme.

Indonesia JCM scheme communication strategy was developed in 2014 to fulfill the communication gap and to do JCM promotion. Communication activities and materials were developed based on this strategy.

Communication activities in JCM implementation

• We maximise our website, develop material communication, as well as using facebook, twitter, and youtube to disseminate the JCM scheme.

• We have been participated in many national and international events on climate change issues.

• JCM has several media converages and actively conduct press conferences to enhance JCM understanding among stakeholders.

Not only the emission reduction that we have delivered, but also other co-benefits

Environment

Society

Economy

Sustainable Development Impacts

Clim

ate Ch

ange Im

pacts

MRV

MRVMRVMRV MRV MRVMRV

MRV

MRV

MRV

Every JCM projects are impelemented not only for the emission reduction purposes but also must be embedded with SD criteria that can be measured. In Indonesia, we develop a set of SD criteria MRV to

ensure that every project will deliver positive impacts

and enviromental integrity.

JCM may contribute to SDG goals

achievement

• Every project delivers transparent and measurable achievement

• Sustainable development criteria must be embedded in every activities

• Direct SDG criteria could be achieved through our projects

• It is not an easy task, but it ensures the sustainability of the scheme.

• JCM, particularly in Indonesia, has its own SD criteria which shows the scheme’s contribution to UN’s SDG

• With these set of criterias, we are confident that JCM will deliver positive impacts to Indonesia in sustainable manner.

Lesson learn from JCM experiences

Good financing scheme for

climate changemitigation

A methodology is a must

Transparent procedure is

the key

Communication strategy must

be good

Good and transparent

infrastructures and processes

Sustainable development is

one of the evaluation

criteria

Good cooperation

among stakeholders

MRV that based on

international standards

Based on good FS and actual

condition

Real emission reduction

program that can be

duplicated and registered

1. In JCM scheme, every type of technology must have one methodology.2. The JCM methodologies currently are being explored for the ISO 14080

examples that will be implemented soon.3. JCM implementation from financing, methodology development, project

implementation, to the registry system can be good examples for the NDC implementation in Indonesia, particularly that used private sector participation.

The evolution of JCM scheme in

Indonesia

JCM basic concepts

JCM business to business

implementation

JCM City to City

cooperation

Sustainable low carbon

growth implementati

on

Sustainable development and emission

reduction achievement

JCM implementation in Indonesia is an evolving scheme that allow us to enhance benefits and long term goals of implementation. The JCM implementation should be harmonized with national law and regulation as well as targets on emission reduction and sustainable development.

New challenges

1.ICAO CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation).

2. ISO 14080 for climate change methodology development.

3. Implementation of article 6 (market and non market mechanism).

4.Domestic and international market based mechanism implementation in other countries.

What must we do?

1.Mainstreaming JCM scheme into national strategy and action of national emission reduction and NDC implementation.

2. Integrating all of the JCM emission reduction achievement to the national registry system.

3.Disseminating JCM experiences and lesson learn to the Indonesia stakeholders, particularly private sectors.

4.Using JCM best practices to other Indonesia mitigation activities.

Our website: http://jcm.ekon.go.idContact us at secretariat@jcmindonesia.com

Sekretariat JCM IndonesiaGedung Kementerian Koordinator Bidang Perekonomian Lt.2

Jl. Medan Merdeka Barat 7, Jakarta 10110

Thank you! Terima kasih!