The Joint Crediting Mechanism (JCM) recently shifted gears, signaling a strategic move away from broadly funding traditional solar power installations toward more selective support for innovative, higher-impact technologies.

The latest auctions reveal a notable tightening of conditions, significantly limiting support for conventional crystalline silicon-based solar projects. This underscores Japan’s intent to push technological boundaries to achieve deeper emissions cuts per investment.

Since its inception in 2013, the JCM has successfully funded numerous solar projects across partner countries, notably in Asia. However, as standard solar installations reach saturation in regions like Thailand and Indonesia, Japan’s Ministry of the Environment is keenly aware of the diminishing returns on emission reductions from repeating similar deployments.

Since 2018, the carbon credits mechanism – which is aligned with Article 6 of the Paris Accord – has evolved from supporting projects that upgrade local tech to cleaner alternatives and improved energy efficiency to rewarding initiatives that involve technology transfer and new solutions. The end goal of the JCM program, however, remains unchanged: help Japan accumulate credits that represent a CO2 reduction of 100 million tons by 2030.