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This paper introduces a novel color filter array (CFA) image compression scheme capable of handling high dynamic range (HDR) representation. The proposed pipeline consists of a series of preprocessing steps followed by a JPEG XR encoding module. A 8-directional edge-sensing mechanism operator is used to reduce estimation error and preserve edge related information during color space conversion. The utilized YCoCg color space allows for a simplified pipeline implementation. Performance of the proposed solution is validated through objective quality assessment metrics and complexity analysis. Extensive experimentation reported in this paper indicates that the proposed solution is suitable for limited resource environments due to low complexity and high performance.