April 2025 VCM Updates Section B

This article is an automatically translated version of the original Japanese article. Please refer to the Japanese version for the most accurate information.

sustainacraft Inc. newsletter. This article is Section B (Trends in Major International Regulations) of VCM Updates (Voluntary Carbon Market Updates). For inquiries, please contact us here.

This article covers the following:

• Key decisions and important matters from the Supervisory Body meeting SB15 for the Article 6.4 mechanism
• Updates on carbon-related policies in various countries

Keywords: Article 6.4 mechanism, Corresponding Adjustment

Introduction

The Supervisory Body meeting SB15, the decision-making body for the Article 6.4 mechanism, was held. At this meeting, topics such as the launch of an interim registry and decisions regarding the transition from CDM to Article 6.4 were discussed, and methodological standards are also steadily being considered.

Meanwhile, related to the trends in national policies discussed later in this article, the designation of Designated National Authorities (DNAs) is steadily progressing as the first step in advancing the "Article 6 mechanism." However, the submission of "Participation Requirements(*)" to the UNFCCC has not progressed significantly. Concerns have been raised that this gap indicates delays in the development of detailed domestic rules (such as approval processes and sustainable development criteria) necessary for actual project participation.

Regarding national carbon-related policies, emerging economies (expected to become "sellers" of Carbon Credits) are generally prioritizing the achievement of their NDCs and are moving to establish domestic compliance markets, while also indicating their intention to engage in Corresponding Adjustment under the Article 6 framework, consistent with their newly submitted NDCs. It is particularly noteworthy that several South American countries with significant Carbon Credit supply potential, such as Brazil, Peru, and Colombia, which had not shown much activity previously, have recently started to make moves.

(*) Participation Requirements are introduced in our February 2025 article.

Announcements

1. Signing of a Cooperation Agreement between sustainacraft and Conservation International Brazil (link)

   COP30 will be held in Brazil this year, and we are focusing on advancing projects with Brazilian Project Developers and environmental NPOs. This time, we announced a project with Conservation International Brazil, which we have been working on, at the Japan-Brazil Economic Forum held recently in Japan. For this project, we are developing a forest monitoring scheme for forest restoration projects, targeting three biomes: the Amazon rainforest, the Atlantic Forest, and the Cerrado.

   

2. SBTi Corporate Net Zero Standard Seminar to be Held(link)

   As a reminder, we will be holding the seminar mentioned in the title next week on April 22nd. If you are interested, please register by April 21st.

Key Decisions and Important Matters from the Supervisory Body Meeting SB15 for the Article 6.4 Mechanism

(link)

Regarding the Article 6.4 mechanism, the Supervisory Body meeting (SB15) was held. Here, we present key decisions and important matters from SB15. An overview is provided below:

• Recognition of Delays in National Rule-making:

  • While 98 countries have designated DNAs, only 14 countries have submitted Participation Requirements (as of February 14, 2025).

• Governance and Management Matters:

  • Approval of work plans, requests concerning expert panels (emphasizing the importance of 'science' and 'removal expertise').

• Transition from CDM to Article 6.4:

  • Approval of revised 'criteria' and 'procedures' for the transition from CDM.

  • Approval of the first CDM transition application (CDM PoA 10415).

• Methodological Standards (MEP: Methodologies Expert Panel in charge)

  • Detailed guidance provided on criteria for Baseline setting.

  • Criteria for demonstrating Additionality adopted.

• Mechanism Registry:

  • Launch and operationalization of an interim Mechanism Registry.

• Next 16th Meeting (SB16):

  • Scheduled to be held in Bonn, Germany, from May 12 to 16, 2025.

Recognition of Delays in National Rule-making