The Green Dividend: Oman’s new carbon partnership with Japan

MUSCAT, MAY 11
A newly launched Joint Crediting Mechanism (JCM) between Oman and Japan is expected to open the door to significant Japanese investment, advanced technologies and technical expertise across a broad spectrum of decarbonisation projects in the Sultanate of Oman, according to Kiyoshi Serizawa, Ambassador Extraordinary and Plenipotentiary of Japan to Oman.
The framework, formally agreed last month by the two governments, establishes a mechanism for cooperation in implementing projects that reduce or remove greenhouse gas emissions while contributing to the climate goals of both countries under the Paris Agreement.
The agreement was signed in Muscat by Eng Salim bin Nasser al Aufi, Minister of Energy and Minerals; and Ambassador Serizawa. Under the mechanism, part of the resulting carbon credits generated from approved projects in Oman can be counted towards Japan’s nationally determined contributions (NDCs), while simultaneously helping Oman advance its own net-zero ambitions.
In an interview with the Observer, Ambassador Serizawa described the JCM as a potentially transformative platform capable of accelerating Oman’s transition towards a low-carbon economy.
“The new JCM is expected to significantly enhance Oman’s attractiveness for foreign investment, particularly from Japanese companies with decarbonisation technologies”, the Ambassador said.
“One of the main reasons is the availability of Japanese government subsidy mechanisms. If a project meets the subsidy requirements and is approved, it can receive financial support from the Japanese government, thereby reducing the initial investment burden on Japanese companies”.
He said this financial support, combined with the transparency and credibility of the JCM framework, creates strong incentives for Japanese firms seeking international opportunities in the clean energy and sustainability sectors.
“The framework is consistent with the Paris Agreement and involves both governments, making it highly credible and reliable for Japanese companies considering investments in Oman”, he stated. “In my view, the two key merits for companies are government subsidies and a transparent, internationally aligned framework”.
The mechanism is expected to benefit a wide range of sectors capable of delivering measurable emission reductions through renewable energy deployment and energy-efficiency improvements. These include green hydrogen, manufacturing, transportation, waste management and agriculture.
“Essentially, any sector capable of delivering measurable greenhouse gas emission reductions or removals could benefit”, the Ambassador explained, adding that no specific priority sectors have yet been identified under the framework.
The JCM is also expected to serve as a major conduit for the transfer of Japanese decarbonisation technologies and technical know-how into Oman. According to Ambassador Serizawa, the collaborative nature of the projects will naturally encourage knowledge sharing between Japanese and Omani partners.
“JCM projects are expected to be joint Omani-Japanese initiatives, because it would be difficult for Japanese companies to implement projects independently in Oman”, he noted. “Cooperation and engagement from Omani companies are essential, whether in dealing with local authorities or — with regulations. Through this collaborative process, technology, expertise, knowledge and know-how are expected to be transferred naturally from the Japanese side to the Omani side”.
He stressed that Omani private sector firms — including SMEs — would play a pivotal role throughout the JCM value chain. Local companies could contribute through engineering, construction, ICT services, digital monitoring systems, operations and maintenance, data management and equipment installation linked to decarbonisation projects.
Beyond reducing emissions, the framework is expected to generate broader economic gains for Oman, including job creation, industrial localisation, human capital development and new opportunities for green entrepreneurship.
“Carbon credits will also be distributed to local participants as an incentive for engagement”, the Ambassador said, adding that Japanese government support measures would encourage the participation of local developers, utilities and other stakeholders.
A central feature of the mechanism is the establishment of a bilateral Oman-Japan Joint Committee responsible for overseeing project approvals and credit issuance. Ambassador Serizawa said the committee — currently being established — would include representatives from both governments.

Its responsibilities will include approving projects, reviewing implementation reports, discussing operational matters and confirming the issuance of credits verified by independent third-party organisations accredited under UN or ISO standards.
To ensure environmental integrity and transparency, the Ambassador said project operators would conduct continuous monitoring and reporting, while independent verifiers would assess project outcomes before credits are formally issued.
“This helps ensure transparency, environmental integrity and alignment with the Paris Agreement, including safeguards against double counting”, he explained.
The mechanism is also expected to support Oman’s long-term efforts to establish a functioning domestic carbon market in line with Article 6 of the Paris Agreement, which governs international carbon trading and cooperation.
“Over time, Oman would be able to build the institutional and technical capabilities needed to engage with international carbon markets”, Ambassador Serizawa said.
He added that Japan is already supporting countries worldwide through capacity-building initiatives such as the Article 6 Implementation Partnership (A6IP), aimed at helping governments develop the legal and technical frameworks necessary for carbon market participation.
The Ambassador noted that Oman remains in the early stages of implementation compared with some regional peers. While Saudi Arabia has reportedly completed at least one JCM-related transaction and the UAE is still developing its framework, Oman’s agreement represents an important early step towards integrating with emerging international carbon market systems.
According to Ambassador Serizawa, the Ministry of Energy and Minerals — working through the Oman Net Zero Centre — will serve as the principal Omani counterpart for the mechanism, coordinating with other entities including the Environment Authority and the Ministry of Finance.
Analysts say the JCM could ultimately position Oman as an attractive destination for climate-linked investment and green industrial development, particularly as the Sultanate of Oman pursues ambitious renewable energy and green hydrogen strategies under Oman Vision 2040 and its Net Zero 2050 pathway.