Paris Agreement Article 6.2 & 6.4 Update: COP30 Recap & JCM Implications

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

This article covers key trends in carbon-related policies announced from November to December 2025, organized according to the following topics:

• Webinar Announcement: Carbon Credit Latest Trends Explanatory Seminar for GX/ETS (link)
• Policy Trends
  • Paris Agreement Article 6.2 (Bilateral Cooperation)
• Paris Agreement Article 6.4 (Paris Agreement Credit Mechanism)
• National Carbon Policies
• Non-State Actor Initiatives
• Analysis Article
  • COP30 Reflection: Nature-based Credits and the Current Status of Paris Agreement Article 6 Rules, also Involving JCM

Keywords: Article 6, Bilateral Cooperation, PACM, JCM, Nature-based, COP30

This article is written by Michelle Apia (Business Development Manager) and Chisa Umemiya (Carbon Specialist).

1. Introduction

This paper outlines key policy trends observed in international carbon markets over the past month since COP30, and explains relevant issues for Japanese companies considering nature-based projects under the JCM.

The policy trends section introduces key developments during this period, including Article 6.2, the Article 6.4 Mechanism (PACM), and national carbon-related policies such as CBAM and ETS.

The latter half, the analysis article, provides a detailed reflection on COP30. Regarding Article 6.2, given that the technical expert review of initial reports is beginning to function as a new gatekeeper for ensuring environmental integrity, we explain three points that Japanese companies participating in JCM should be aware of: approval and tracking systems, consistency with NDCs, and conservatism of methodologies. For Article 6.4, it was decided that there would be no "special treatment" for nature-based projects under the PACM rules. We explain that for JCM to approach such international standards, project proponents must individually pursue standards higher than JCM guidelines. Since the cost of this cannot be borne solely by proponents sustainably, there may be a need for the system to provide backup, such as increasing the price of JCM Credits.

2. GX/ETS Carbon Credit Latest Trends Explanatory Free Seminar

We will hold the following seminar on January 27th, after the new year. We are inviting Mr. Takahashi, Assistant Director of the JCM Promotion Office at the Ministry of the Environment, to explain and discuss the latest trends based on COP30, GX/ETS system design, and other related initiatives. We encourage your active participation!

Date and Time: January 27, 2026 (Tuesday) 14:00-16:00

Theme: Carbon Credit Latest Trends Explanatory Seminar for GX/ETS

Location: Online (Zoom Webinar)

Registration & Details: https://www.sustainacraft.com/260127/ (link)

3. Policy Trends

Article 6.2

In the past month since COP30, positive developments continued in the commitment to international cooperation for Credit trading, progress in sourcing eligible projects, and preparations for responding to Paris Agreement Article 6.

New partnership movements were observed:

• Ethiopia and Singapore signed a Memorandum of Understanding (MoU) on Carbon Credit collaboration. This marks Ethiopia's first agreement for carbon trading under Article 6.2 (Source). With Ethiopia finalizing its domestic carbon market regulations in 2026 and slated to host COP32 in 2027, further developments are anticipated (Source, Source). From a JCM perspective, Ethiopia has been a JCM partner country since 2013, but no projects have been registered or methodologies approved to date, so future progress is keenly watched (Source).
• Switzerland signed bilateral implementation agreements under Article 6 with Zambia and Mongolia, bringing Switzerland's total number of partner countries to 16. Switzerland also signed an MoU with Brazil aimed at establishing a partnership on climate action (Source).
• Norway and Senegal signed a bilateral implementation agreement under Article 6 at a COP30 side event. This follows Norway's announcement of up to 740 million USD in contributions to support Emission Reduction measures in developing countries (Source).
• Switzerland launched a coalition aimed at raising Article 6 ambition. This coalition seeks to promote voluntary Emission Reductions, with participation from Germany, Luxembourg, Norway, and Sweden (Source).

New developments regarding eligible projects were also observed in existing partnerships:

• Singapore and Bhutan launched a project call for proposals under their bilateral implementation agreement. While many industrial, energy, and waste management projects are eligible, forest and agricultural projects under Gold Standard (GS) and American Carbon Registry (ACR) are excluded (Source).
• Singapore and Thailand published a list of eligible projects and Methodologies under their bilateral implementation agreement. To be eligible, projects must use specific pre-approved Methodologies based on standards such as Gold Standard, VCS, or GCC, and Issue Credits between 2021 and 2030. However, High Forest, Low Deforestation (HFLD) projects are excluded, and some Agricultural Land Management (ALM) Methodologies, such as Verra's VM0042, will be evaluated on a case-by-case basis. (Source)

Article 6.4

Movements surrounding Article 6.4 have accelerated in the past month, indicating that the Paris Agreement Article 6.4 Mechanism (PACM) is transitioning from the system design phase to an initial operational phase.

• The UN launched a public consultation for the first global savanna fire management Methodology under Article 6.4. This is a particularly important development for regions where the importance of fire management has been discussed, but an international compliance framework has not existed (Source).
• At COP30, it was agreed to transfer approximately 30 million USD from the Clean Development Mechanism (CDM) of the Kyoto Protocol era to the PACM. This is a significant step, as funding shortages have been a challenge for the PACM (Source, Source).
• The G20-backed "Common Carbon Credit Data Model (CCCDM)" carbon market data model, which aims to integrate voluntary and international market infrastructure, announced plans to incorporate the PACM's registry rules once they are finalized (Source).

National Carbon Policies

Carbon pricing and trade-related climate policies continue to evolve, with new developments in CBAM, ETS, and carbon market regulations reshaping corporate compliance costs, market access, and the nature of international cooperation.

CBAM

• The UK has announced its intention to legislate a Carbon Border Adjustment Mechanism (CBAM) from 2027, based on consultation outcomes. Meanwhile, the EU has agreed on a negotiating mandate to link the EU ETS and the UK's carbon market. While UK businesses will be subject to the EU CBAM starting in January 2026, future market linkage could lead to reduced long-term trade friction and carbon costs (Source, Source).
• CBAM has faced criticism and backlash from other countries. For instance, at COP30, China and India reportedly called on the EU to withdraw CBAM, arguing it is a unilateral trade measure circumventing the Paris Agreement. Additionally, India requested an exemption from CBAM, stating it imposes disproportionate burdens on developing economies, but the EU plans to reject this request (Source, Source).

ETS

• The Australian government has finalized a revised landfill gas Methodology for Australian Carbon Credits (ACCUs) after several years of review. As the Baseline will be rising, projects will be required to improve Methane (CH4) recovery over time to maintain the same level of Credit Issuance (Source).
• Switzerland announced partial changes to its CO2 law starting early next year, aligning its ETS with the EU system. For example, operators of high-temperature process facilities that have concluded CO2 Emission Reduction agreements with the Swiss Confederation can now apply for a reduction in their minimum Greenhouse Gas (GHG) reduction targets under certain conditions (Source).
• The European Commission confirmed that the revision of the EU ETS next year is expected to slightly ease the reduction of allowances withdrawn from the market after 2030. This aims to reduce pressure on energy-intensive industries and promote investment in decarbonization (Source).

Other Policies

• Nepal's Cabinet approved long-awaited carbon trading regulations under the Environment Protection Act, paving the way for participation in international carbon markets. These regulations have finally been approved, having been drafted since 2019 (Source, Source).
• Senegal is accelerating the development of its carbon market infrastructure, aiming to complete its regulatory framework and national carbon market registry within a few months. This seeks to establish a pioneering position within Africa's expanding Article 6 market (Source).
• Ghana proposed a new Benefit Sharing framework for Article 6 revenues. The proposal allocates 5% of revenues to climate action, green industry support, and government operations. This proposal is currently under review and has not yet been formally approved (Source).

Non-State Actor Initiatives

Industry-led collaborations are also advancing, seeking clearer and faster implementation of international carbon market mechanisms, including JCM.

Dozens of Japanese companies established the "MIDORI Consortium" to support "MIDORI INFINITY," a government-backed initiative to expand Japanese Emission Reduction technologies in agriculture overseas through public-private partnerships. While Project Developers like Faeger and Green Carbon are responsible for Carbon Credit Issuance in agricultural projects, Yanmar, a leading Japanese machinery manufacturer, is working on water management solutions and improving fertilizer use efficiency (Source).

Furthermore, the International Air Transport Association (IATA), together with the governments of Japan and Malaysia and key industry stakeholders, issued a joint statement calling on host countries to accelerate regulations for Article 6 implementation. This aims to promote the Issuance of Letters of Authorization (LoA) and facilitate the supply of CORSIA Eligible Emission Units (EEUs) (Source).

4. (Analysis Article) COP30 Reflection: Nature-based Credits and the Current Status of Paris Agreement Article 6 Rules, also Involving JCM

Article 6.2: Implementation Progresses, but Technical Review Becomes a New Gatekeeper

The COP30 decision (link) regarding Article 6.2 indicated steady progress in its implementation by countries.

• 39 cooperative approaches
• Approval by 14 countries
• Submission of relevant reports

These advancements have been confirmed.

However, the first technical expert review (link) of initial reports also highlighted a clear gap between the requirements of Article 6.2 and the practical capabilities of various countries.

Here, we will organize the key issues based on the case of Guyana (link), one of the first countries subject to review. Guyana reported Jurisdictional REDD+ under the ART (TREES standard) as a cooperative approach.