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The objectives of this study were: (i) to establish a methodology for calculating CO2 reduction from railway developments at the project appraisal stage, and (ii) to develop a tool and a manual to enable JBIC staff to estimate CO2 emission reductions by themselves. The study covered the following tasks: (i) development of a methodology for estimating the amount of CO2 emission reductions from a railway project, (ii) carrying out a case study of the Chennai Metro project, and (iii) preparing EXCEL spreadsheets for estimating CO2 emission reductions and an accompanying operating manual.