A JI project is a cost-efficient way for industrialised countries that have signed the Kyoto Protocol to meet reduction commitments. It is also an incentive for industrialised countries to share knowledge on green technology. Cooperating parties earn emission reduction units (ERU) for their efforts.

JI investors can use the emissions reduction acquired from the project to increase their emissions allowance. For the host country that transfers the emission reduction the emissions allowance is correspondingly reduced.

Cost-efficient emissions cutting
The JI scheme provides for a cost-effective implementation of the Kyoto Protocol, where emissions reductions can be reached at the lowest possible cost. A JI project could be to replace a coal-fired power plant with a more efficient combined heat and power plant. Or it could be to reforest land. In practice, JI projects are most likely to take place in countries with transitioning economies, e.g. Eastern Europe. These countries tend to have more options for cutting emissions at a lower cost.

Putting the climate first
Participation is voluntary, and benefits are reaped by both parties, as well as the environment:

• Host country receives foreign investment and advanced green technologies.
• Investor country receives help to achieve compliance with part of their emissions reduction commitments at a lower cost than it would domestically.
• Real, measurable, long-term, and cost-effective benefits that can help reduce the climate change are achieved.
• Reductions in emissions that are additional to that of efforts applied to the usual operations of a company are achieved.

What requirements is your JI project subject to?
According to the Kyoto Protocol, your JI project could be subject to one or more external assessments by an operating entity:

• Validation prior to project implementation is not a requirement under the Kyoto Protocol, but you may choose to undergo one. There are some national guidelines for JI projects, like the ERU-PT program in the Netherlands, which require independent third party validation in addition to verification of JI projects. For more information about JI project validations, please contact us.
• Determination of its projects is a requirement for countries who have not established GHG inventories and reporting procedures in accordance with the Kyoto Protocol. The determination of a JI project is equal to a validation in its nature.
• Verification of the emission reductions/removals and compliance with criteria defined in the Kyoto Protocol. According to the Kyoto Protocol and Marrakech Accords, there are two different procedures for carrying out a JI project depending on whether the host country meets certain requirements for methodology and reporting:
  
  1. When the host country fully meets the requirements, the host party may apply its own procedures to the process, issue emission reduction units (ERU), and transfer them to the investing party.
  
  2. When the host country does not meet the requirements, the ERUs from a project must follow a verification procedure performed by an independent third party.