[Japan-Vietnam First] Green Carbon Partners with Korea's KIH to Launch AWD Project for JCM Credit Creation in Nghe An, Vietnam

Green Carbon Inc. (Representative Director: Jun Okita, hereinafter "Green Carbon"), which operates one of Japan's largest nature-based carbon credit generation and sales businesses, announced that it has partnered with the major Korean financial group, Korea Investment Holdings Co., Ltd. (hereinafter "KIH"), to launch a rice paddy methane reduction project utilizing Alternate Wetting and Drying (AWD) technology in Nghe An province, central Vietnam.

This initiative applies the Joint Crediting Mechanism (JCM) promoted by the Japanese government, marking the first carbon credit project in both Japan and Vietnam aimed at issuing JCM credits for the agricultural sector in Vietnam. Through collaboration with local farmers, government authorities, and partner companies, Green Carbon aims to expand the generation of agricultural carbon credits in Southeast Asia, contributing to decarbonization for both the planet and corporations.

◆ Background of this partnership Under the vision of "Saving the earth with the power of life," Green Carbon provides comprehensive support for the generation, registration, and sales of nature-based carbon credits, promoting agricultural carbon credit projects across Southeast Asian countries. In Vietnam, Green Carbon is particularly focused on reducing methane emissions from rice cultivation using AWD technology. Since establishing a local office in August 2024, the company has built strong partnerships nationwide, signing Memorandums of Understanding (MOU) with provincial authorities in 15 provinces, including the Mekong Delta region, to accelerate the deployment of AWD.

Meanwhile, KIH Group, as a representative financial group in Korea, is actively expanding its business in ESG investment and global climate change countermeasure areas. In recent years, as a leading trader in Korea's largest K-ETS (Korea Emissions Trading Scheme), the company possesses extensive market knowledge and trading experience, promoting carbon credit-related businesses centered on the Asian region. Simultaneously, it is strengthening collaborations with credit originators, consumers, and financial institutions with a view to forming related funds.

Against this backdrop, the two companies held discussions toward launching an AWD project in Nghe An, Vietnam, leading to the commencement of this initiative. This project will work on reducing methane emissions from rice paddies using AWD technology, with the aim of developing a JCM methodology and issuing JCM credits in the future. Furthermore, it aims to create multifaceted value, not limited to technology verification, but also including improving regional agricultural sustainability, increasing farmer income, and enhancing water usage efficiency.

Moving forward, based on the results of the pilot project, the companies will consider expanding the target areas and acreage, and will proceed to build a model case for agricultural JCM projects in Vietnam.

◆ Japan's JCM and agricultural sector initiatives The Joint Crediting Mechanism (JCM) is a system where Japan and partner countries work together to reduce greenhouse gas emissions and share the reduction results. JCM includes private-sector JCM, where credits are distributed between private companies and the government, and facility investment-type JCM, where distribution is between governments. It is drawing attention as a compliance credit that, like J-Credits, can be used for national NDC (Nationally Determined Contributions) targets. The Japanese government has set a target of creating 100 million tons of credits by 2030 and 200 million tons by 2040 using the JCM.

While JCM credits have primarily been issued in the renewable energy and energy conservation sectors, expansion into the agricultural sector has been progressing in recent years. According to think tank statistics, assuming the current pace is maintained and JCM credits are issued sequentially, the cumulative emission reduction/removal through JCM by 2030 is projected to be around 57 million tons. The remaining approximately 43 million tons needed to reach the 100 million ton target is expected to be secured through additional private-sector JCM projects.

Among private-sector JCM initiatives, AWD in particular is drawing attention in Southeast Asian countries as a method to reduce rice-derived methane gas. In the Philippines, this methodology was approved by the JCM Joint Committee of the Japanese and Philippine governments in February 2025. Leveraging this methodology approval, Green Carbon is fully launching JCM projects within the Philippines.