Title
INDO-PACIFIC ECONOMIC FRAMEWORK FOR PROSPERITY AGREEMENT RELATING TO A CLEAN ECONOMY
Preamble
The Parties to this Agreement:
RECALLING the United Nations Framework Convention on Climate Change, done at New York, May 9, 1992, and the Paris Agreement, done at Paris, December 12, 2015;
ACKNOWLEDGING that:
accelerated and meaningful efforts are necessary to mitigate and adapt to the impacts of climate change, while, in line with their respective climate goals, enhancing energy security and food security and promoting sustainable land, water, and ocean solutions, sustainable livelihoods, quality jobs and decent work for their populations, sustained, inclusive and sustainable economic growth, and full and productive employment;
the Parties are actively pursuing shared objectives and their respective pathways to net- zero-emission economies and sustainable development, taking into account each Party's unique national circumstances, including development needs;
clean economy transitions offer significant market, investment, industrialization, and quality jobs and decent work opportunities;
addressing the enormous energy and infrastructure needs of economies in the region is essential in their transitions to clean economies;
the transformation to more sustainable and resilient agriculture systems can advance water security, food security, and nutrition, achieve low-emission and climate-resilient production, and ensure that farmers and rural communities can thrive in a clean economy;
active participation in an open, transparent, and inclusive manner of private and public sector entities, including MSMEs, representative employers' and workers' organizations, and academic and research institutions, as well as women, Indigenous Peoples, persons with disabilities, rural and remote populations, vulnerable, disadvantaged and minority groups, and local communities, is essential for shaping the clean economy and realizing the Parties' shared goals; and
working together to mobilize resources for financing, including concessional financing, and for technology and capacity building, is essential for successful transitions to clean economies;
RECALLING:
commitments to rationalize and phase out inefficient fossil fuel subsidies that encourage wasteful consumption, while recognizing the importance of providing those in need with essential energy services, and to reach this goal, continue their efforts in an accelerated manner;
that efforts by the Parties pursuant to this Agreement should complement those in relevant international fora and be consistent with their respective obligations under the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh, April 15, 1994, and multilateral environmental agreements; and
the United Nations Declaration on the Rights of Indigenous Peoples, adopted at New York, September 13, 2007, and recognizing its importance in the context of this Agreement; and
SEEKING TO:
advance and mobilize cooperation and collaboration on research, development, commercialization, availability, accessibility, affordability, and deployment of clean energy and climate-friendly technologies, as well as on policy frameworks, capacity building, technical assistance, investment, innovative financing approaches, public- private partnerships, and networks that deliver quality and sustainable projects and solutions towards their shared objectives;
enable sustainable and inclusive trade and investment within and across their borders to reduce greenhouse gas emissions by sources, increase removals by sinks, and build climate resilience in the region by sustainably unlocking and utilizing the region's abundant clean energy resources and vast carbon sequestration potential;
promote employment in the clean economy and in just transitions through the creation of quality jobs and decent work, including labor rights as defined by this Agreement; and
advance efforts and cooperation that:
promote best practices and facilitate the conduct of trade, investment, or business;
use best available science, sound data, and evidence-based analysis, including taking into account local and traditional knowledge, to make informed decisions, measures, activities, and reviews of progress;
foster the interoperability of relevant policies and standards related to the clean economy, consistent with domestic laws, regulations, and rules;
facilitate sharing knowledge, information, and expertise that lend support to understanding and addressing the challenges of transitioning to net-zero greenhouse gas emissions and resilient economies; and
avoid harm to the environment and minimize adverse impacts on natural resources,
HAVE AGREED as follows:
Body
Section A. Initial Provisions
Article 1. Scope
The Parties, noting the IPCC assessments that the impacts of climate change will be much lower at a temperature increase of 1.5 degrees Celsius compared with 2 degrees Celsius and reiterating their resolve to pursue further efforts to limit the increase to 1.5 degrees Celsius, intend to enhance efforts and cooperation to advance their transitions to clean economies, taking into account national circumstances, aligned with their respective net-zero pathways and consistent with those further efforts, while enhancing climate resilience. Each Party emphasizes that its efforts should be implemented in a manner that is just and inclusive, maximizing socio-economic opportunities and positive collaborations. The Parties intend to take actions so as to mobilize tangible benefits. Cooperation under this Agreement includes cooperative work programs. The Parties intend for collective and individual action under this Agreement to address:
(a) energy security and transition;
(b) advancing low-greenhouse-gas technologies and solutions in the industrial and transport sectors;
(c) sustainable land, water, and ocean solutions;
(d) innovative technologies for greenhouse gas capture and removal; (e) incentives to enable the clean economy transition;
(f) just transition; and
(g) stakeholder engagement and institutional arrangements.
Article 2. Definitions
For the purposes of this Agreement:
Agreement means the Indo-Pacific Economic Framework for Prosperity Agreement Relating to a Clean Economy;
carbon capture, utilization, and storage (CCUS), also referred to as carbon capture, utilization, and sequestration, includes any process that captures carbon dioxide and either reuses or durably stores it, resulting in net global greenhouse gas emissions reduction;
central level of government means:
(a) for Australia, the Commonwealth Government;
(b) for Brunei Darussalam, the national level of government;
(c) for the Republic of Fiji, the national level of government;
(d) for the Republic of India, the Central Government;
(e) for the Republic of Indonesia, the central level of government;
(f) for Japan, the Government of Japan;
(g) for the Republic of Korea, the central level of government;
(h) for Malaysia, the federal level of government;
(i) for New Zealand, the national level of government;
(j) for the Republic of the Philippines, the national level of government;
(k) for the Republic of Singapore, the national level of government;
(l) for the Kingdom of Thailand, the national level of government;
(m) for the United States of America, the federal level of government; and
(n) for the Socialist Republic of Viet Nam, the national level of government;
Chicago Convention means the Convention on International Civil Aviation, done at Chicago, December 7, 1944;
clean energy means any energy source that generates energy resulting in low- or zero- greenhouse-gas emissions, including from low- or zero-emission technologies that significantly reduce greenhouse gas emissions, or any solution that saves energy through efficiency and conservation, consistent with achieving net-zero emissions and the Parties' shared climate goals;
cooperative work program means a cooperative work program covered by Article 23; days means calendar days;
economic cluster means a special economic zone, subnational hub, industrial park, eco-industrial park, industrial estate, industrial complex, or comparable agglomeration;
enterprise means any entity constituted or organized under applicable law, whether or not for profit, and whether privately or governmentally owned or controlled, including any corporation, trust, partnership, sole proprietorship, joint venture, association, or similar organization;
green shipping corridor means an international maritime route that uses near-zero or zero- emission lifecycle (1) fuels, technologies, or energy sources and promotes the development of decarbonized ports, with the ambition to achieve net-zero greenhouse gas emissions across all aspects of the shipping value chain within the boundaries of its energy system by or around, i.e., close to, 2050;
ILO means the International Labour Organization;
ILO Declaration means the JLO Declaration on Fundamental Principles and Rights at Work and its Follow-up (1998), as amended in 2022;
ILO Guidelines means the ILO Guidelines for a Just Transition Towards Environmentally Sustainable Economies and Societies for All (2015);
IMO means the International Maritime Organization;
interested Parties, as used in a provision of this Agreement, means those Parties that intend to engage in the cooperation or other activities referred to in that provision;
IPCC means the Intergovernmental Panel on Climate Change;
IPEF Clean Economy Committee or Committee means the IPEF Clean Economy Committee established under Article 24.1;
labor rights means:
(a) the following rights, set out in the ILO Declaration: (2)
(i) freedom of association and the effective recognition of the right to collective bargaining;
(ii) the elimination of all forms of forced or compulsory labor;
(iii) the effective abolition of child labor and, for the purposes of this Agreement, a prohibition on the worst forms of child labor;
(iv) the elimination of discrimination in respect of employment and occupation; and
(v) a safe and healthy working environment; and
(b) acceptable conditions of work with respect to minimum wages and hours of work; (3)
MSMEs means micro, small, and medium-sized enterprises;
Paris Agreement means the Paris Agreement done at Paris, December 12, 2015;
Party means any State or separate customs territory for which this Agreement is in force; and
sustainable aviation fuel (SAF) means a renewable or waste-derived aviation fuel that meets the sustainability criteria referenced in Volume IV of Annex 16 of the Chicago Convention, including any future amendments to that Annex.
Article 3. Inclusive Transitions to Clean Economies
1. The Parties acknowledge each Party's diverse social and cultural contexts and geography. The Parties recognize that Indigenous Peoples, and local communities, as understood in each Party's domestic framework, have an important role in the transitions to clean economies.
2. In implementing this Agreement, in accordance with domestic law and policies, each Party intends to partner with its Indigenous Peoples, and local communities, including through enabling participation and, as appropriate, drawing on their traditional knowledge and practices to enhance efforts to transition to clean economies, including the sustainable management and governance of ecosystems, forests, oceans, and waterways and the move towards sustainable agricultural practices.
3. With respect to any matter covered by this Agreement, a Party may: (4)
(a) in fulfillment of its obligations to its Indigenous Peoples under its law oratreaty, promote and protect the rights, interests, duties, and responsibilities of its Indigenous Peoples; or
(b) in fulfillment of its obligations under its law, promote and protect the rights, interests, duties, and responsibilities of its local communities.
Section B. Energy Security and Transition
Article 4. Clean Energy Technology Development and Capacity Expansion
1. The Parties intend to cooperate on achieving energy security and accelerating deployment of clean energy technology. Such cooperation may include, as appropriate, policy discussions, technical analyses, knowledge transfer, and technology exchange on voluntary and mutually agreed terms, financing, or workforce development.
2. The Parties recognize the importance of rapidly increasing research on, and deployment of, clean energy technologies through laws, regulations, policies, standards, best practices, and projects. The Parties intend to support, adopt, or maintain measures that:
(a) expand access to clean, affordable, and reliable power, as well as incentivize an increased share of clean energy in the electricity supply;
(b) promote transparent licensing, siting, and permitting for clean energy and related generation, transmission, distribution, and storage projects in the electricity sector and support a goal of collectively catalyzing at least US $120 billion investment for clean energy storage by 2030;
(c) deploy safeguards to support clean energy transitions, which may include social, economic, and environmental impact assessments; and
(d) encourage new energy infrastructure investments that enhance resilience against the impacts of climate change.
3. The Parties recognize the importance of further collaboration on technologies and sharing information on developing regulations, codes, and standards for hydrogen, building on efforts in relevant fora in which Parties participate, such as the International Partnership for Hydrogen and Fuel Cells in the Economy.
4. The Parties recognize that, by displacing fossil-derived commodities and utilizing existing infrastructure, recycled carbon fuels and gases, such as e-fuels and e-methane, can reduce emissions that cannot be avoided otherwise. Interested Parties intend to consider research, development, and utilization of recycled carbon fuels and gases that result in net global greenhouse gas emissions reduction, including in hard-to-abate sectors, and intend to collaborate to develop necessary arrangements to facilitate recycled carbon fuels and gases.
5. The Parties recognize the importance of low-carbon and renewable hydrogen and their derivatives, such as ammonia, as a versatile decarbonization pathway with significant applications. The Parties intend to develop a hydrogen ecosystem by building up key supply chain enablers needed to support a global market for low-carbon and renewable hydrogen by efforts such as:
(a) exchanging information and best practices on regulations, frameworks, safety standards, and measures to facilitate the cross-border trade of hydrogen;
(b) accelerating the development of mutually recognized emissions accounting methodologies, standards, and certifications on the carbon intensity of hydrogen and its derivatives to improve tradability;
(c) identifying necessary infrastructure and supply-side capabilities for hydrogen and its derivatives;
(d) supporting research and development on hydrogen technologies that facilitate cross-border transport and trading or new applications; and (e) exploring collaborative pilots and demonstration projects to provide confidence for investment and encourage further development and deployment.
6. Interested Parties may also explore collaboration on:
(a) multi-fuel firing, such as hydrogen, ammonia, and methanol, in existing pulverized coal-fired (PC-fired) boilers and gas turbines;
(b) agro-based biomass and refuse-derived fuel firing in conventional PC-fired boilers for replacing coal with minimum modification; and
(c) labeling of thermal power that promotes more environmentally compliant units (in terms of SOx and NOx emissions and through biomass co-firing) as transition measures towards decarbonization.
7. Parties that support the use of nuclear energy recognize the important role that nuclear energy and civil nuclear cooperation play in ensuring energy security as well as providing affordable low-carbon energy. To this end, these Parties intend to:
(a) ensure that sound policy and regulatory frameworks in nuclear safety and waste management are in place when considering the adoption of nuclear energy technologies;
(b) support frameworks consistent with international best practices and the highest standards of safety, security, and safeguards, including those of the International Atomic Energy Agency, to facilitate safe and secure deployment of such technologies; and
(c) consider collaborations to enable the deployment of advanced nuclear energy technologies.
8. The Parties emphasize the importance of enhancing investment to drive clean energy sector development through continued improvement of regulatory, legal, and policy frameworks that incentivize broad participation in energy markets, taking into account grid integration and flexibility.
Article 5. Electrification, Regional Grid Interconnection, Energy Efficiency, and Conservation
1. The Parties recognize the value of energy efficiency, which contributes to accelerating clean energy transitions, promoting economic growth, enhancing energy security, and reducing emissions. The Parties intend to cooperate to advance and maintain policies to expand and incentivize energy efficiency and conservation measures and investments, including by:
(a) utilizing energy performance standards and labeling schemes to increase public awareness of energy efficiency and consumption as well as potential costs and savings;
(b) sharing best practices and facilitate collaboration on relevant efficiency labeling schemes;
(c) advancing performance standards and building codes to reduce energy consumption or intensity and improve performance in new and existing buildings; and
(d) promoting energy efficiency in large energy-consuming commercial clusters by encouraging the adoption of clean energy sources and energy efficient solutions.
2. Each Party intends to promote energy efficiency and conservation schemes, which may include those offered by energy service companies and energy performance contracting, that can help monetize energy savings and emission reductions and accelerate investment in energy efficiency.
3. Interested Parties intend to work together to develop a regional framework for cross- border electricity interconnections and trading, including technical, regulatory, and financial frameworks and standards. These Parties intend to:
(a) encourage regional energy interconnections, including of measurement, reporting, and verification frameworks, to accelerate the development of clean energy,
(b) collaborate on technical, regulatory, and safety measures to coordinate and facilitate joint planning of, investment in, and secure operation of, interconnected grids to reduce costs and emissions;
(c) support effective frameworks for cross-border clean energy and supply chain development; and
(d) explore cooperation on subsea electricity cables to enhance cross-border electricity trade.
4. The Parties acknowledge the benefits of subsea electricity cables and the expeditious and efficient installation, maintenance, and repair of these cables to facilitating cross-border electricity trade. Those Parties that engage in cross-border electricity trade intend to work together, as appropriate, to facilitate the secure transport of electricity and the development of offshore electricity infrastructure for unrestricted cross-border electricity trade in accordance with applicable domestic laws and regulations of each Party and relevant international law, including with respect to implementation of procedures consistent with international law for permits for the laying, maintenance, and repair of subsea electricity cables, as well as mitigation ofrisk of damage to subsea electricity cables that are operated, owned, or controlled by a person of another Party.
5. The Parties emphasize the urgent need for immediate, deep, rapid, and sustained reductions in global greenhouse gas emissions in this critical decade to achieve global net-zero emissions by or around mid-century, including by rapidly scaling up the deployment of clean power generation and energy efficiency measures. The Parties intend to:
(a) promote deployment of renewable energy and support a goal of catalyzing at least US $20 billion in investment for renewable energy in the region by 2030, which may include support for projects, public or private sector investment, carbon markets, financing, or public-private partnerships;
(b) cooperate through sharing knowledge, best practices, and technical expertise to reduce dependence on unabated fossil fuels; and
(c) cooperate on the deployment of advanced planning and forecasting techniques to identify sustainable pathways to rapidly transform energy systems to increase the use of clean energy and reduce the use of and dependence on unabated fossil fuels, while maintaining and ensuring the reliability, affordability, and availability of energy and energy systems.
6. Interested Parties intend to collaborate on capacity building, research and development, knowledge transfer, and technology exchange on voluntary and mutually agreed terms to support mini-grid renewable energy solutions that enable affordable and economically viable clean energy access and energy security for rural populations in the region. Interested Parties further intend to develop rules, regulations, and frameworks to enable the cross-border trade of renewable energy equipment and components for mini-grids, and related technologies and supply chains.
Article 6. Market Stability and System Resiliency
1. The Parties recognize the importance of, and intend to cooperate on, energy market stability and systems resilience through technical cooperation and capacity building and mobilizing investment and sustainable finance in the context of their transitions to clean economies.
2. Interested Parties intend to cooperate by sharing information and promoting best practices regarding oil and gas security. This may include capacity building and coordination among these Parties to efficiently utilize surplus petroleum storage. Interested Parties with surplus petroleum storage capacity may enable other Parties seeking to increase their strategic stocks to utilize available storage capacity through leasing contracts or other appropriate written arrangements, consistent with their respective applicable domestic law and policies.
3. The Parties recognize the importance of the diversification, resilience, and sustainability of clean energy supply chains. The Parties intend to cooperate on the reduction of vulnerabilities and risk posed by supply chains that are adversely monopolized by single suppliers. Such cooperation may include:
(a) promoting analytical efforts to characterize supply chain challenges and develop pathways to clean energy while also enhancing supply chain security;
(b) sharing information, as appropriate and feasible and on voluntary and mutually agreed terms, regarding sources and trade flows of clean energy technologies and parts and components from non-Parties, with the goal of enhancing market-based production and investments in promoting clean energy transitions; and
(c) working together to secure the availability of critical minerals or materials, parts, and components of clean energy technologies by building resilient supply chains and enhancing resource efficiency and circularity to support clean energy transitions.
4. In developing cross-border energy interconnections, the Parties intend to cooperate, with a view to ensuring safety, security, and reliability, to ensure that power sector investment does not compromise the ability of each Party to effectively regulate its power system consistent with its applicable domestic laws and regulations.
Article 7. Energy Sector Methane Abatement
1. The Parties recognize the benefits of capturing wasted methane, particularly through cost-effective measures in the energy sector, and intend to support efforts that contribute to the reduction of global anthropogenic methane emissions by 2030.
2. The Parties intend to reduce methane emissions in the energy sector by:
(a) reducing emissions from methane flaring, venting, and leakage in their respective oil and natural gas value chains;
(b) minimizing coalbed methane leaks from underground mining to the greatest extent practicable;
(c) supporting credible monitoring, reporting, and verification policies; and
(d) incentivizing infrastructure and equipment investments that reduce methane emissions.
3. The Parties acknowledge the use of waste-to-energy technologies as a means of reducing methane emissions.