-Businesses in both companies, mainly in Southeast Asia and Japan-
(Representative Director: Jun Ohkita, “Green Carbon”), a company that supports the creation and sale of carbon credits, has entered into a collaboration with Nippon Koei Co. (NKK), a leading global carbon credit provider, has started a collaboration with Nippon Koei Co. The project aims to generate carbon credits through methane gas reduction in Japan and Southeast Asia by extending the period of medium-drying1 and intermittent irrigation (AWD)2 in paddy rice cultivation in cooperation with Nippon Koei Co.
There are a wide variety of corporate and municipal initiatives to become carbon neutral. One of them is carbon offsetting, in which companies invest in greenhouse gas reduction activities in an amount commensurate with the greenhouse gas emissions. The emission reductions are certified as “credits” that can be traded.
- Background of Collaboration
Green Carbon has been developing credit creation and sales support business mainly in Southeast Asia. In Southeast Asia, Green Carbon’s main activity is credit creation through methane gas reduction through the implementation of intermittent paddy field irrigation (AWD).
Many areas in Southeast Asia lack irrigation facilities, and in such areas it is difficult to control the amount of water needed for AWD. In addition, the income of local paddy farmers is low, and it is important to improve farmers’ income and support their farming methods. In addition, reducing farmers’ labor for credit generation is one issue. Thus, to implement AWD-based credit creation in Southeast Asia, it is necessary to solve the following three issues: (1) providing guidance on water management for credit creation, (2) improving income through credit acquisition support and farming guidance, and (3) reducing labor for credit creation.
JICA has abundant experience in implementing irrigation facility development in Southeast Asia through Official Development Assistance (ODA) projects. We can provide consulting services on water management for rice paddies by utilizing irrigation facilities in Southeast Asia (Thailand, Vietnam, and the Philippines) in which JCI has been involved to date.
Through this collaboration, the two companies will support local farmers in generating credits through AWD by combining NKK’s extensive experience in water management and farm management support with Green Carbon’s knowledge of credit generation projects.
- Effects of this collaboration
Green Carbon and NCC will contribute to the decarbonization of Southeast Asia by supporting the creation and sale of credits and teaching AWD to local farmers to increase their income through higher yields. Green Carbon will conduct a demonstration study of AWD in collaboration with the University of the Philippines and the Vietnam National University of Agriculture and utilize the research results for this project.
- Reduce labor to generate credits
Green Carbon reduces farmers’ efforts to generate credits by utilizing the Agreen*3 platform service, which calculates the amount of credits to be generated and uploads the necessary documents to the service website. Agreen is a one-platform service that supports the entire process from complex application procedures to project implementation support and credit sales by uploading the necessary documents to the service website. The service is currently available only in Japan, but is scheduled to be rolled out overseas this year.
- Future Development
Through the collaboration, Green Carbon and Nippon Koei will demonstrate and expand AWD credit generation and return profits to farmers in Southeast Asia. In the future, Green Carbon and NKK will use the know-how of the credit generation business in Southeast Asia to expand the business to the Middle East, Africa, Central and South America, and other regions where NKK is conducting business.
- Potential from AWD Implementation in Southeast Asia (Thailand, the Philippines, and Vietnam)
There are a total of 60 irrigation facilities in Thailand, the Philippines, and Vietnam related to the work implemented by Nippon Koei, and if the paddy field area per facility is calculated as approximately 10,000 ha, the total area climbs to approximately 600,000 ha. If AWD is introduced in all paddy fields (taking into account that multiple cropping is common), it is expected to reduce greenhouse gas emissions by approximately 3.6 million tons4, which, when converted into carbon credit prices, will generate economic value of approximately 7.2 billion yen5 per year.
*1: Mid-drying: During the paddy cultivation period, water is drained from the paddy once before ear emergence to dry the surface of the rice field to prevent excessive offshooting (branching from near the root base) and to control growth.
*2: AWD: Alternate Wetting and Drying (AWD) is a method in which the paddy fields are filled with water and then drained and dried every few days, based on the water level of the paddy fields. Intermittent irrigation (AWD) reduces water consumption compared to continuous irrigation, thus contributing to the conservation of water resources.
*3: Agreen official website: https://agreen.cloud/
4: Calculated as a reduction of 6 tons of CO2 equivalent per 1 ha of paddy field, according to our own research.
5: Calculated at 2,000 yen/year per ton, according to our own research.
●Comments from Jun Ohkita, CEO of Green Carbon,inc.
However, there are many areas in Southeast Asia that lack irrigation facilities and equipment, making it difficult to generate credits through AWD in those areas. Therefore, by utilizing the irrigation facilities that NKK has been involved in, and by making water management easier, many farmers will be able to generate credits. In addition, by providing farmers with support for farming methods and guidance on AWD methods, Nippon KOEI will be able to help farmers improve their productivity and contribute to decarbonization.
●Mr. Hiroshi Matsuda, Managing Executive Officer of Nippon Koei Co.Ltd
Mr. Hiroshi Matsuda, Managing Executive Officer of Nippon Koei, commented, “Nippon Koei will utilize its experience in agriculture and irrigation projects in developing countries to create credits and improve farmers’ livelihoods through water management and agricultural method guidance for irrigation facilities in Japan and other developing countries. By promoting intermittent irrigation (AWD), the project will contribute to decarbonization and poverty eradication by reducing methane gas emissions and increasing rice yields. Working with Green Carbon Corporation, a leader in the business of creating and selling credits domestically and internationally, we will build a framework for achieving a sustainable society.”