Paris Agreement Article 6.2 & 6.4 Update; JCM Cambodia Forest Guidelines

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

This is the newsletter from sustainacraft.

This article provides an update on major carbon-related policy trends announced from February 2026 to March 2026, structured under the following headings:

• Policy Trends
  • Paris Agreement Article 6.2 (Bilateral Cooperation)
  • Paris Agreement Article 6.4 (Paris Agreement Credit Mechanism (PACM))
  • National Carbon-related Policies
  • Non-State Initiatives
  • UNFCCC Registry
• Feature Article
  • Cambodia JCM Forest Guidelines Adopted – Key Insights from a Comparison of Old and New Guidelines –

Keywords: Article 6, Bilateral Cooperation, PACM, JCM, Forest Guidelines 

Introduction

This month, the UN approved the first Issuance of Carbon Credits under Paris Agreement Article 6.4 (PACM). Additionally, under Article 6.2, the signing of bilateral agreements and calls for projects, particularly centered around Singapore, have become increasingly active. Furthermore, significant developments questioning the balance between "quality" and "economic viability" in both compliance and Voluntary Carbon Markets have occurred, including discussions on EU ETS reform and the stricter labeling standards by IC-VCM.

The latter half of this newsletter features an article examining the JCM Cambodia Forest Guidelines, which were adopted in March. By comparing the new and old guidelines, it highlights their characteristics and explains how guidelines are becoming standardized in the JCM forest sector. This development should improve institutional predictability for deployments in other countries to some extent, making it more realistic than ever to build portfolios targeting multiple countries.

Policy Trends

Paris Agreement Article 6.2

Progress in Singapore's Bilateral Agreements

• Singapore and Paraguay signed an Implementation Agreement to facilitate structured cooperation on Nature-based Solutions (Source).
• Singapore and Rwanda opened a new project application round under their bilateral Implementation Agreement (Source).
• Singapore is also expected to launch a call for projects with Thailand under a bilateral agreement next month (Source).

Progress of Japan's JCM Projects

Under the JCM framework between Japan and Chile, a call for public comments has been initiated for three proposed projects in Chile. These include the "3.4MW Rice Husk Power Generation Project in Maule" (Source) and the "3MW Solar Power Generation Project Utilizing Agricultural Land" (Source).

Paris Agreement Article 6.4

Regarding Paris Agreement Article 6.4 (PACM), the UN has approved the first Credit Issuance, marking the transition of the mechanism's operation into a full implementation phase.

First Approval of PACM Credit Issuance

The UN has approved the Issuance of the first Carbon Credits (PACM Credits) under the Paris Agreement for a clean cooking project in Myanmar (Source). This project, in cooperation with Korean participants, also allows for Credit transfers within the Korean Emissions Trading Scheme (Source).

Transition from CDM to PACM

According to a UNEP announcement, 29 activities were allowed to transition from CDM to PACM last month, following approval from host countries (Source).

Additionally, the Dominican Republic announced that it became the first country in the Latin America and Caribbean region to register two wind power plants under PACM (Source).

National Carbon-related Policies

Countries have advanced diverse policies aimed at reducing Carbon Dioxide emissions. Particularly in the EU, discussions surrounding ETS reform have intensified, and the introduction of systems in emerging economies is also progressing.

EU ETS Reform and Member State Conflicts

In the EU carbon market, concerned about the burden on industry due to surging energy costs, the European Commission is considering easing emissions benchmarks and reviewing the free allocation system (Source). Following the German Chancellor's hints at price reductions and system reforms, and Italy's indication of a plan to request a temporary suspension of the system, permit prices sharply declined (Source). In contrast, allied countries such as Sweden and France oppose postponing the introduction of the new market (ETS2) or excessive intervention in price suppression, urging the maintenance of the system's fundamental structure (Source).

Trends in Voluntary Carbon Removal Certification and CBAM in the EU

The European Commission adopted the world's first voluntary carbon removal certification Methodology, covering Direct Air Carbon Capture and Storage (DACCS), Bioenergy with Carbon Capture and Storage (BECCS), and carbon farming (Source). Meanwhile, regarding CBAM, Belgian authorities reported that they have not yet heard from about half of the affected importers, indicating practical challenges remain for the full transition of the scheme (Source).

National System Building (UK, Malaysia, etc.)

• The UK announced plans to protect remaining oil refineries from rising carbon permit costs (Source), while also outlining a policy to expand its Emissions Trading Scheme to the international shipping sector starting in 2028 (Source).
• Malaysia decided to introduce a carbon tax targeting the steel and energy sectors in its 2026 budget, taking a step towards its 2050 Net Zero goal (Source).
• In Kenya, East African clean cooking company KOKO Networks was forced to cease operations after its Letter of Approval (LoA) from the government was rejected, highlighting the political risks for host countries in the carbon market (Source).

Non-State Initiatives

Rigorous screening of existing Credits and capacity building for market infrastructure development were advanced.

Market Bifurcation and Quality Strictness by IC-VCM

IC-VCM decided to exclude 240 million Carbon Credits from renewable energy projects from eligibility for the CCP label. This move is seen as a defining step towards bifurcating the market, aiming to tighten quality standards for Carbon Credits and shift the market towards higher-quality Credits (Source).

Capacity Building in Africa by VCMI and GIZ

VCMI and GIZ jointly published a report on strengthening the capacity of Validation/Verification Bodies (VVBs) in Africa. The report points out that a shortage of VVBs in Africa accounts for a significant portion (10-50%) of project delays and cost overruns. By strengthening the local ecosystem, they aim to mitigate Greenwashing risks and return economic value to the region (Source).

Expansion of Voluntary Markets in Various Regions

A Saudi Arabian state-backed regional Voluntary Carbon Market (VCM) company formed a partnership with a North American player, expanding its international footprint in GHG accounting and Credit sales (Source). The South Korean government also announced plans to establish a voluntary carbon market by the end of this year to support the development of climate technology (Source).

UNFCCC Registry Updates

In February 2026, a total of six UNFCCC-related reports were submitted. This article highlights the Biennial Transparency Report (BTR) from Tunisia, a JCM partner country, and Uzbekistan's Article 6.2 Initial Report. Uzbekistan's submission of its Initial Report is a particularly important milestone, indicating progress in institutional development for JCM project formulation.