Challenges and Actionsto Low Carbon Technologies Transfer

October 11th, 2016Shuichi OZAWA

Ministry of the Environment, Japan (MOEJ)

Challenges Towards Deployment of Low-Carbon Technologies at overseas

1. ・L2-tech List2. ・JCM（Model Project and ADB Trust Fund)3. ・Innovation of Technologies for Developing Countries4. ・City-to-City Collaboration (JCM Feasibility Studies)

・Establishment of Low-cost Business Model

1. Definition of Leading Low Carbon Technologies2. Initial Cost for Leading Low Carbon Technologies

(technologies with securing quality on not only initial performance but operation and maintenance)

3. Mismatch of Needs and Costs of technologies 4. Effective Formation of Low Carbon Projects

Challenges

1

MOEJ’s Actions:

1. L2-Tech List

“Leading”:That the element technology incorporated in the equipment or instruments, etc. is leading.That the combination or incorporation of the element technology(ies) is leading, even though it (they) may not be novel per se.That the efficiency has been dramatically improved in a short period.

“Low-carbon”: Technology that has the maximum “L2-Tech Standard” efficiency in the equipment or instruments, etc..

L2-Tech refers to “Leading Low-carbon Technologies”, which represents leading element technologies reducing energy consumption or carbon dioxide emissions of equipment and instruments to which they are applied. They are supposed to be most effective for reducing energy-originated CO2 emissions.

3

What is “L2-Tech”

L2-Tech Standard = Commercialized Best efficient equipment

No incentive for improvement Continuous incentive

Image of the “Standard Clearing Type”(Fixed standard, passive)

Image of the “Pursuit of Best Type”(Fluid standard (L2Tech Standard, proactive)

L Co. T Co. E Co. C Co. H Co. L Co. T Co. E Co. C Co. H Co.

4

L2-Tech Standard as persuing the Best

Note: Standard is updated twice a year

Industry and commercial Air conditioning, heat sources, etc.

Industry (sector-specific manufacturing equipment etc.)

Industries include iron and steel, chemical, paper and pulp manufacturing, petrochemical, automobile manufacturing, construction machinery, agricultural instruments (for cultivation), agriculture (horticultural facility)

Transportation Automobiles (passenger cars, commercial vehicles, heavy vehicles), two-wheeled vehicles, railways, shipping, aircraft

Residential Domestic electrical appliances, water heaters, window glass, etc.

Energy conversion Renewable energy, natural gas-fired power plants, etc. Waste treatment and recycling

General wastes treatment, industrial wastes treatment, material recycling, sewage treatment, sewage sludge treatment, etc.

5

Technologies in the L2-Tech List

☞ L2-Tech List is the list of equipment and instruments regarded as important for CO2 reduction by MOE☞ L2-Tech Certified Product List is the list of products of L2-Tech List presenting highest CO2 reduction

efficiency in the year

Select important ones CO2 reduction

High

Low

CO2 reduction

High

Low

A

B

C

G

H

I

Level

Level

SettableStandard evaluation

Disable

Equipment and instruments that contribute to low-carbonization (worldwide)

【L2-Tech Certified Product List】

【L2-Tech List】

Certify products used in equipment and instruments

【L2-Tech Standard List】

Standard evaluation is settable

Includes equipment and instruments superior in CO2 reduction for attaining target of 80% reduction by 2050

Products certified by MOE as presenting highest CO2 reduction efficiency

Indicates highest performance of “superior products” commercialized as L2-Tech Standard

6

Structure of information on technologies and products in L2-Tech

7

Example of L2-tech list : Co-generation

Co-generation unit

Generation efficiency[%]42.0%

Generation efficiency %～3000kW 28.4

3000kW～5000kW 30.45000kW～7000kW 39.37000kW～10000kW 34.310000kW～ 40.9

【Gas turbine type】

【Gas engine type】

Generation efficiency %～10kW 31.5

10kW～100kW 34.0100kW～500kW 41.6

500kW～1000kW 41.81000kW～3000kW 45.6

3000ｋW～ 49.5

【Fuel cell type】

Example：L2-Tech level of co-generation system

Fuel cell

Gas engine

Gas turbine

Gene

ratio

n ef

ficie

ncy

Generation capacity8

Example of L2-tech standard level : Co-generation

Offer informat

ion

Strengthen

support

【Increase public awareness】• MOEJ make L2-Tech List and disseminate it 【Ensure producer reliability】• Appeal performance certified by MOE.

【Possibility of support】• Subsidy from revenueof CO2 tax• Support for technology development

Support for introduction and sales of L2-Tech products

Expected users’ behavior

Equipment L2-Tech product

Gas heat pump XYZ123A-4

・・・ ・・・ Awareness

Interest

Introduction

Approach to users of L2-Tech products

9

Advantages of L2-Tech certification brings in- 316 products were certified in Summer 2015, and 1,377 in Winter 2015

2. JCM Model Project/ ADB Trust Fund

JAPANPartner Country

Leading low carbon technologies and mitigation projects

GHG emission reductions/

removals

Used to achieve Japan’s emission reduction target

CreditsOperation and management

by the Joint Committee 11

Basic Concept of JCM

The amount of emission reductions and removals acquired by Japan under the JCM will be appropriately counted as Japan’s reductionin accordance with the Paris Agreement.Accumulated emission reductions or removals by FY 2030 through governmental JCM programs to be undertaken within the government’s annual budget are estimated to be ranging from 50 to 100 million t-CO2.

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JCM in Japan’s INDC

Mongolia Jan. 8, 2013（Ulaanbaatar）

BangladeshMar. 19, 2013(Dhaka)

EthiopiaMay 27, 2013(Addis Ababa)

Kenya Jun. 12,2013 (Nairobi)

MaldivesJun. 29, 2013(Okinawa)

Viet Nam Jul. 2, 2013 (Hanoi)

Lao PDR Aug. 7, 2013(Vientiane)

Indonesia Aug. 26, 2013(Jakarta)

Costa Rica Dec. 9, 2013(Tokyo)

Palau Jan. 13, 2014(Ngerulmud)

CambodiaApr. 11, 2014(Phnom Penh)

MexicoJul. 25, 2014(Mexico City)

Saudi Arabia May 13, 2015

ChileMay 26, 2015(Santiago)

MyanmarSep. 16, 2015(Nay Pyi Taw)

ThailandNov. 19, 2015(Tokyo)

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16 partner countries (as of May 2016)

JCM Partner Countries

Government of Japan

International consortiums (which include Japanese entities)

MRV and deliver at least half of JCM credits

Finance part of an investment cost(less than half)

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JCM Model Projects by MOE

Waste heat recovery in the Cement plant

Eco-driving with digital tachograph

High efficient transformers in power distribution

Indonesia Vietnam Vietnam

Gas Engine Co-generation system at the automobile assembly

plant

Indonesia

15

Examples of JCM Model Projects

Solar PV installation on the building roof top

Palau

High efficient boiler for heating

Mongolia

○ Model project in FY 2013 (3 countries, 7 projects)○ Model project in FY 2014 (7 countries, 14 projects)■ ADB project in FY 2014 (1 country, 1 project)○ Model project in FY 2015 (10 countries, 34 projects)○ Model project in FY 2016 (9 countries, 28 projects) ● REDD+ Model Project (2 countries, 2 projects)

Total 15 partner countries, 85 projectsThe underlined projects have been registered as the JCM projects (13 projects) ※these projects account for 2 registered JCM projects respectively, as they’re operating in different sites

Mongolia:○Heat Only Boiler (HOB)※ ○2.1MW Solar PV in Farm○10MW Solar PV ○8.3MW Solar PV in Farm

Indonesia:○Centrifugal Chiller at Textile Factory ○Energy Saving at Convenience Store○Refrigerants to Cold Chain Industry※ ○Double Bundle-type Heat Pump○Centrifugal Chiller at Textile Factory 2 ○Waste Heat Recovery in Cement Industry○Solar Power Hybrid System ○Regenerative Burners○Centrifugal Chiller at Textile Factory 3 ○Old Corrugated Cartons Process○Upgrading to Air-saving Loom ○Centrifugal Chiller in Shopping Mall○Smart LED Street Lighting System ○Once-through Boiler System in Film Factory○Gas Co-generation System ○Once-through Boiler in Golf Ball Factory○Solar PV in Jakabaring Sport City ●REDD+ through controlling slush-and burn○10MW Hydro Power Plant ○Looms in Weaving Mill○LED Lighting to Sales Stores ○Industrial Wastewater Treatment System○Air-conditioning Utility System in Airport

Palau:○Solar PV for Commercial Facilities○Solar PV for School○Solar PV for Commercial Facilities Ⅱ

Maldives:○Solar Power on School Rooftop■Smart Micro-Grid System

Malaysia:○Solar PV

Kenya:○Solar Diesel Abatement Projects○6MW Hydropower Generation○Solar PV at Salt Factory

Thailand:○Energy Saving at Convenience Store ○Solar PV on Factory Rooftop○Upgrading Air-saving Loom ○Centrifugal Chiller & Compressor○Co-Generation in Motorcycle Factory ○Centrifugal Chiller in Tire Factory○Air Conditioning System & Chiller ○Refrigeration System○Ion Exchange Membrane Electrolyzer ○Chilled Water Supply System○LED Lighting to Sales Stores ○Waste Heat Recovery in Cement Plant○Co-generation System ○Refrigerator and Evaporator○Solar PV and EMS in Paint Factory ○3.4MW Solar PV

Cambodia:○LED Street Lighting ○0.2MW Solar PV at International School○Solar PV & Centrifugal Chiller ○0.8MW Solar PV at International School

Myanmar:○Waste to Energy Plant○Brewing Systems to Beer Factory○Once-through Boiler in Instant Noodle Factory

Laos:●REDD+ through controlling

slush-and-burn

Ethiopia:○Biomass CHP Plant

Saudi Arabia:○Electorolyzer in Chlorine

Production Plant

Mexico:○4.8MW Power Generation with Methane

Gas Recovery System

Costa Rica:○5MW Solar PV○Chiller and Exhaust Heat

Recovery System

Bangladesh:○Centrifugal Chiller ○Loom at Weaving Factory○PV-diesel Hybrid System ○50MW Solar PV Power Plant○Centrifugal Chiller ○Air-conditioning system

Viet Nam:○Digital Tachographs ○Amorphous transformers○Air-conditioning in Hotel ○Air-conditioning in Lens Factory○Container Formation Facility ○Electric Furnace○Solar PV in Shopping Mall ○Amorphous transformers 2○Air-conditioning Control System ○Electricity Kiln○Waste Heat Recovery in Cement Plant ○Water Pumps○Energy saving Equipment in Lens Factory ○Amorphous transformers 3○Energy Saving Equipment in Wire Production Factory

16

JCM Financing programs by MOEJ （FY2013/2014/2015） as of July 15, 2016

MOEJ supports incremental cost of advanced low-carbon technologies for GHG emission reduction through contribution to ADB Trust Fund (JFJCM)

17

MOEJ

ADB

JFJCM

OCR/ADF*

ADB projectsin DMCs

(which have signed

bilateral documents for

JCM with Japan)

MRVJCM Credits

Grant(Max USD10MM)

Loan/Grant

*OCR: Ordinary Capital Resources , ADF: Asian Development Fund

ADB Trust Fund (JFJCM)

Addu

AdduJFJCM

(Japan Fund for JCM)

ADB Grant

ADB-administeredStrategic Climate Fund

(CIF SREP)

European Investment Bank

Islamic Development Bank

Use of Proceeds Location (Atolls and Islands)

Grid

PV

Lithium-ionBatteryEMS

Goidhoo

Buruni

Vilingili

Khurendhoo

Maldives

Improvement of energy efficiency and reduction of energy-derived CO2 emission in Addu

Diesel

POISED Phase 15 islands

USD38MM

Addu has a population of over 23,000 inhabitants, the second largest habited island in Maldives.

*POISED: Preparing Outer Islands for Sustainable Energy Development

USD12MM

USD50MM

USD10MM

After Phase 2Total 160 islands

1st Project adopted by JFJCM

18

USD5MM

3. Innovation of Technologies for Developing Countries

Subsidy program for innovation of low carbon technologies for developing countries

Background, Objectives Summary of subsidy program

Subsidy Scheme

- Excellent low carbon technology is in high demand in developing countries and essential to strengthening global climate change countermeasures. - However such technology may not be appropriate to be introduced in the market of developing countries due to the difference of environmental regulations and systems, cultural practices and restriction of energy resources.- The program aims to fundamentally improve technologies in order to meet the requirement of developing countries, and realize low carbon society, promoteInternational expansion of technology, as well as reduce CO2 emission.- The innovation process in the program will lead to technology development in Japan and dissemination its technologies in other regions.

This program provides subsidies to private organizations for fundamental improvement of low carbon technologies in order to meet various requirements of the developing countries, such as environmental regulations and system, cultural practices and restriction of energy resources.

Expected impact

- Scale-up utilization of the Joint Crediting Mechanisms (JCM)- Diffuse appropriate low carbon technology in developing countries- Strengthen global competitiveness of excellent low carbon technologies

Target: Private organization (subsidy：1/2～2/3 of whole project budget)Implementation period: Maximum 3 years

For image only

Building sector Infrastructure sector Consumer equipment sector Energy sector

Low carbon technology at office and householdLow carbon technology at office and household

Low carbon technology for air conditioning and refrigerator systemHeat pump technology

Low carbon technology for air conditioning and refrigerator systemHeat pump technology

Renewable energy, cogeneration technologyIndependent / distributed low carbon energy system

Renewable energy, cogeneration technologyIndependent / distributed low carbon energy system

Low carbon technology at transport infrastructure systemWater infrastructure technologyWaste management technology

Low carbon technology at transport infrastructure systemWater infrastructure technologyWaste management technology

Innovation

Japanese Company

Internal reflow

Development of low carbon technology / demonstration

Market deployment and dissemination

Fundamental improvement of excellent low carbon technology

SupportMOEJ

Other developing countries

Developingcountries

Example of the technologies

20

21

EV bus in Cat Ba Island, Hai Phong, Vietnam

• Support the development of a sightseeing EV bus suitable for mountainous topography and high temperature and humidity

• Core technologies: Battery charge from PV with unique charging control , auto-body with aluminum alloy, CIGS PV favorable for cloudy climate

CIGS Flexible PVCharge

Battery StationRevolving Replacement

Copyright 2016 Google

eco-friendly transport system with renewable energyin Cat Ba island, registered as UNESCO biosphere reserve

STEP1 (2015)Introduction of 1 demo EV bus for further improvementSTEP2 (2016)Introduction of 10 EV bus and PV at a local bus companyFuture(2017-)Introduction of 60 EV bus to accommodate increasing Transport demand. Cost is covered by admission fees.

4. City-to-City Collaboration and Establishment of Low-cost Business Model

• The role of cities was articulated at COP21 and G7 environment ministers meeting • It is necessary to establish low carbon societies (LCS) in developing and emerging countries in

order to globally reduce GHG emission to achieve 2 degree target. • City-to-city collaboration can realize continuous diffusion of advanced low carbon technologies as

well as transfer of knowledge and know-how to foreign cities from Japanese municipalities with long-term support

The Government of Japan emphasizes and supports the “city-to-city collaboration”

Win-Win Relationship

Contribution to establishment of low carbon societiesin JCM host countries

Advanced low carbon technologies

Transferred Japan’s experience, knowledge and know-how

• Overcome of pollution and establishment of LCS

• Operation experiences of institutions and infrastructures

City-to-City Collaboration as JCM Feasibility Studies

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Advantages of City-to-City Collaboration- Support project formation to realize low-carbon society based on City-to-City collaboration between a Japanese and a foreign municipality

- Japanese cities, having overcome environmental challenges in the past, can provide their knowledge and technologies

Cities in collaboration in 2014-2016(9 Japanese Cities with 17 partner cities）

Yokohama city ：Batam city (Indonesia)Bangalore city (India)Da Nang city (Vietnam),Bangkok city (Thailand)

Kanagawa pref. ：Siem reap province (Cambodia)Kitakyushu city ：Phnom Penh city (Cambodia)

Rayong (Thailand)Haiphong city (Vietnam)Iskandar (Malaysia)Surabaya city (Indonesia)

Kawasaki city ： Yangon city (Myanmar)Bandung (Indonesia)

Fukushima city ： Ayeyarwady (Myanmar) Sapporo city ： Ulaanbaatar city (Mongolia)Osaka city ： Ho Chi Minh city (Vietnam)Kyoto city ： Vientiane city (Laos)Kobe city : Phu Quoc island (Vietnam)

Supporting Master Plan Development

Phase 1

Feasibility Study

Project Screening

Project Finding

Phase 2

Phase 3

Phase 4

JCM project formation

City to City collaboration will facilitate low-carbon project formation efficiently.

Advantages of city to city collaboration

-Japanese city with environmental experience support partner cities to establish master plan for low carbon development.

-Local information is provided by partner city to conduct project findings effectively.

-Partner city provides local knowledge and data to assess project potentials.

-Permission procedures are facilitated, if necessary, by partner city-Resources for project implementation is arranged and provided by partner cities -Applying successful cases to other locations and/or cities

Digital tachograph(Vietnam)

Photovoltaics(Malaysia)

Waste to Energy(Myanmar)

Process towards project formation

Achievements : the JCM Model Projects

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Feasibility Study on JCM Project by City to City Collaboration

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1. The study of high-efficiency heat pump installation projects for Energy-saving field and PV generation projects for RE* field in Mongolia(Ulaanbaatar City-Sapporo City/Hokkaido Prefecture)

2. The study of cogeneration and exhaust heat recovery projects for RE field in Vietnam(Hai Phong City-Kitakyushu City)

3. The study of PV generation projects for RE field and high-efficiency boiler installation projects for Energy-saving field in Myanmar(Yangon City-Kawasaki City)

4. The study of water treatment system installation and WtE projects for RE field in Myanmar(Pathein City-Fukushima City)

5. The study of biomass power generation projects and PV generation projects for RE field in Cambodia(Siem Reap State-Kanagawa Prefecture)

6. The study of WtE, cogeneration and exhaust heat recovery for RE field in Thailand(Rayong Province-Kitakyushu City)

7. The study of project formulation by assisting planning the action plan for the climate change strategy and projects for RE field and Energy-saving in Cambodia(Phnom Penh city-Kitakyushu City)

8. The study of cogeneration projects for RE field and high-efficiency air conditioning system installation projects for Energy-saving field in Malaysia(Iskandar Development Region-Kitakyushu City)

9. The study of high-efficiency air conditioning system installation and heat desorption unit installation projects in Indonesia(Batam City-Yokohama City) *RE : Renewable Energy

１

98

76 54

3 2

FY2016 Feasibility studies with city-to-city collaboration

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Bilateral Matching Platform

Policy Makers(Central/ Local Government

Agencies)

Businesses(Business associations, business

units, etc.)

Funding Agencies(Banks, ESCOs, etc.)

Policy Makers(Central/ Local Government

Agencies)

Businesses(Business associations, Business

units, Multinational enterprises, etc.)

Funding Agencies(Banks, ESCOs, etc.)

Stakeholders from Demand CountryStakeholders from Supply Country

Challenge to establishing low-cost matchmaking platform

- For continuous formation of low-carbon projects, establishing cost-effective platform needs to be considered

- MOEJ supports the formation of demonstrative matchmaking platform in India to promote BtB, BtF, and BtP relationship for low-carbon project development.

Thank you for your attention !