The government has adopted a plan to offer Indonesia energy-saving technology in a trade for greenhouse-gas emission rights, the Environment Ministry said Tuesday.
It is the first project under the so-called Bilateral Offset Credit Mechanism to come to fruition.
The installation of a Japanese-made cooler at an Indonesian plant is expected to reduce carbon dioxide emissions there by 800 tons by 2020 and allow Tokyo to earn emission credits on 400 tons, the ministry said.
The project has been in place since fiscal 2013, but a joint Indonesian and Japanese government committee had to hammer out how the plan should work.
So far, Japan has agreed to bilateral emission trading schemes with 12 countries, including Mongolia and Bangladesh. In Indonesia, nine other projects are underway, according to a ministry official.