The 25th Knowledge Sharing Conference: Joint Crediting Mechanism for CCUS Projects: An Overview of the Opportunity and Methodology
CCUS technology is a promising technology for achieving net-zero emissions targets in ASEAN and East Asia. Economically, the capital intensity of CCUS projects remains a substantial barrier. Perceived risks, together with low or uncertain returns, have resulted in limited participation from private-sector financiers. However, over the past two years, investors and financial institutions have changed their attitudes towards CCUS. Some banks and other financial institutions have begun financing CCUS projects. In addition, collaborative financing models are emerging. The Joint Crediting Mechanism (JCM) is one potential financing mechanism for supporting the development of CCUS in ASEAN.
The Joint Crediting Mechanism (JCM) is a bilateral system initiated by the Government of Japan to facilitate the diffusion of leading low-carbon technologies, products, systems, services, and infrastructure. The regulatory framework is governed by a Joint Committee (JC), consisting of representatives from the Japanese government and the partner country. The JC is responsible for developing and modifying rules, guidelines, and methodologies, as well as registering projects and deciding on the issuance of credits. A key pillar of the framework is the Measurement, Reporting and Verification (MRV) process, which ensures that greenhouse gas (GHG) emission reductions are real, measurable, and verifiable.
The JCM now spans 30 partner countries and more than 270 projects, mobilising over USD 3 billion in investment. The Government of Japan has pledged to achieve emissions reductions of 100 MtCO₂ by 2030 and 200 MtCO₂ by 2040 through JCM activities. To support this ambition, the JCM Agency was launched in April 2025 to manage JCM operations, while Japan plans to establish its domestic compliance carbon market in 2026. Importantly, JCM credits will be eligible as compliance units, potentially generating significant demand for high-integrity credits.
A key milestone in 2024 was the adoption of revised JCM rules consistent with Article 6 of the Paris Agreement, fulfilling the prerequisites for the international transfer of credits. In parallel, Japan and several partner countries signed Mutual Recognition Arrangements (MRAs) linking the JCM with national systems. This has opened the door to new initiatives, particularly in the CCUS sector. The JCM Joint Committee has also adopted new CCS/CCUS guidelines.
To successfully deploy CCUS through the JCM, the following areas require attention:
Strategic Collaboration: Public–private partnerships are essential. This includes G2G (Government-to-Government) cooperation to align regulatory standards and B2B (Business-to-Business) joint ventures to share technical and commercial risks.
Human Resource Development (HRD): Intensive capacity building is needed to enable partner countries to develop expertise in CCUS-specific MRV, site selection, and long-term monitoring. Technical training for local engineers in capture-plant operations and reservoir management is also critical.
Risk Management: Comprehensive frameworks are required to address technical risks (e.g. CO₂ leakage), financial risks (e.g. credit-price volatility), and political risks. Insurance mechanisms and clear legal definitions of liability during the post-closure phase of storage sites are essential to attracting private investment.
To build a better understanding of JCM implementation in CCUS projects, the Secretariat will host a knowledge-sharing conference to discuss these issues.
Programme and Agenda