Overview of Joint Crediting Mechanism (JCM)

Through the JCM, the GHG emission reductions achieved by these projects are quantified into carbon credits, which are then recognized and shared between Japan and the partner country under a transparent agreement, jointly monitored by both parties.
I. How the JCM Works
The JCM follows a three-step implementation process:
1. Project Implementation in the Partner Country
Enterprises or organizations in partner countries, such as Viet Nam, carry out GHG mitigation projects. Examples include:
- Rooftop solar systems for manufacturing facilities
- Installation of high-efficiency combustion equipment
- Wastewater treatment systems with energy recovery
- Use of energy-saving inverter air conditioners

2. Japan Provides Technological and Financial Support
The Japanese government subsidizes part of the initial investment cost through programs such as the GEC Financing Program, while also supporting the transfer of technology, equipment, and MRV (Measurement, Reporting, and Verification) systems.

3. Carbon Credits Recognition and Sharing
The amount of GHG emissions reduced compared to a predefined “baseline” is quantified into JCM credits, which are then shared between the two countries. These credits can be:
- Counted toward the Nationally Determined Contributions (NDC) of either party
- Reserved for domestic carbon markets
- Converted into ITMOs (Internationally Transferred Mitigation Outcomes) under Article 6 of the Paris Agreement

II. Benefits of Participating in the JCM for Partner Countries
As of May 2025, 30 countries have joined the JCM with Japan. Viet Nam was one of the first countries to participate, starting in 2013. Currently, 23 approved methodologies are available for use in Viet Nam.

Benefits for partner countries joining JCM:
Financial Benefits
- The JCM can subsidize up to 50% of the initial investment costs for participating enterprises
- Helps reduce capital burden and facilitates access to clean technologies, especially for small and medium-sized enterprises (SMEs)

Economic Benefits
- Supports green growth and the development of low-carbon supply chains
- Creates new opportunities for exporting climate-aligned technologies, equipment, and products, as well as additional revenue from carbon credit sales

Technology & Capacity Development
- Enables access to advanced Japanese technologies
- Improves the capacity for MRV systems (Measurement, Reporting, and Verification)
- Enhances technical skills in operating and managing carbon projects for all stakeholders involved

JCM Credits and International Standards
In the future, JCM credits are expected to align more closely with international standards, including: ISO 14064-2 (Quantification and reporting of GHG emission reductions at the project level), ISO 14064-3 (Verification and validation of GHG information), ISO 14065 (Requirements for GHG validation/verification bodies).

As a result, JCM credits are increasingly compatible with both voluntary and compliance carbon markets, enabling enterprises to engage more actively in the global carbon market.

III. Conclusion
The Joint Crediting Mechanism (JCM) is not only an effective tool for reducing emissions, but also a strategic cooperation platform between Viet Nam and Japan in transitioning to a low-carbon economy.
Participation and expansion of the JCM will enable Viet Nam to:
- Accelerate progress toward its commitment of net-zero emissions by 2050
- Enhance the green competitiveness of domestic enterprises
- Expand access to climate finance and clean technologies on a global scale