The Joint Crediting Mechanism (JCM) Between Indonesia and Japan

Updated 2026-11-02 · 4 min read · By the akar.earth specialist team

JCM Indonesia explained: the 2013 Indonesia–Japan crediting partnership, how JCM credits work under Article 6.2, and what it means for forest and land projects.

The Joint Crediting Mechanism (JCM) is a bilateral crediting partnership between Japan and Indonesia, signed in 2013. Japan helps finance low-carbon projects in Indonesia, the resulting emission reductions are measured under jointly agreed methodologies, and credits are allocated between the two countries; Japan treats it as a cooperative approach under Article 6.2 of the Paris Agreement.

What the JCM is

Japan launched the JCM to support emission reductions in partner countries and to count part of those reductions towards its own climate targets. Indonesia was one of the first partner countries. Each partnership is governed by a joint committee of the two governments, which approves methodologies, registers projects and decides on credit issuance.

Typical features:

• Bilateral governance through a joint committee rather than an international standard body.
• Japanese finance, often a subsidy covering part of the cost of advanced low-carbon technology.
• Jointly approved methodologies, usually designed to be conservative and simple to monitor.
• Credit allocation between Japan and the partner country, agreed per project.

Most Indonesian JCM projects have been in energy efficiency, renewable energy and industrial processes. The JCM also has REDD+ rules, but forest projects have been a small share. Check the official JCM project list for current numbers, as we have not verified them.

How it fits Indonesian regulation

The JCM predates Indonesia’s carbon economic value (NEK) framework. Since Perpres 98/2021 and now Perpres 110/2025, Article 6 cooperation sits inside the national framework. The Komrah NEK secretariat lists Article 6 schemes as one of the NEK instruments, with carbon trading, results-based payments and the carbon levy.

Three implications follow:

1. Authorisation. Credits transferred to Japan and counted towards Japan’s target need Indonesian authorisation and a corresponding adjustment. Recent sector rules separate foreign transfers that need authorisation from those that do not.
2. Registry recording. Indonesia now expects carbon units to be recorded in SRUK. How JCM credits are recorded alongside the JCM registry should be confirmed with the Ministry of Environment.
3. NDC accounting. Each adjusted tonne leaves Indonesia’s NDC balance. That affects how willing the government is to share credits, especially in forestry, which carries the largest share of Indonesia’s NDC reductions.

Who it applies to

• Japanese companies investing in low-carbon projects in Indonesia, often with Indonesian partners.
• Indonesian project hosts in industry, energy, transport and, in principle, land use.
• Both governments, through the joint committee.

Independent forest-carbon developers without a Japanese partner are not the usual JCM participants.

What it means for forest-carbon developers and buyers

A niche, not a main route. For most forest-carbon developers, the JCM is a possible channel rather than the default. It works best where a Japanese company wants to invest directly and is comfortable with government-to-government governance.

Strong integrity signals. JCM credits come with explicit government involvement on both sides and, as an Article 6.2 approach, corresponding adjustments for transfers. That is attractive to buyers who need credits that count towards national targets.

Methodology availability matters. Check whether an approved JCM methodology fits your activity. If not, developing one takes time and joint committee approval. Compare with international standard routes on the Article 6 hub and in our guide to Article 6.2 ITMOs.

Japanese corporate buyers. Japan’s own compliance and voluntary schemes may recognise JCM credits. Japanese buyers of Indonesian forest credits should ask whether a JCM or Article 6.2 route is needed for their intended claim.

Questions to ask before using the JCM

If you are weighing the JCM against a voluntary-market route, ask four things early. Does the Joint Committee accept your project type and methodology? How will credits be shared between Indonesia and Japan, and what does that leave for your investors? Will the credits be authorised and adjusted under Article 6? And how will the project be recorded in Indonesia’s own registry? The answers decide whether the JCM adds value or only adds steps.

Open questions

• Number and type of active Indonesian JCM projects: check the JCM registry rather than secondary counts.
• REDD+ under the JCM in Indonesia: whether new forest projects are being accepted and on what terms.
• Interaction with SRUK and with Indonesia’s recognition arrangements; see mutual recognition arrangements.
• Credit-sharing ratios for new projects under the current NEK rules: not verified.

Our carbon strategy service helps developers compare JCM, Article 6 and voluntary routes. For the full domestic framework, see the Indonesia regulation hub.