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Paris Agreement Article 6 Regular Update / SBTi Corporate Net Zero Standard v2

Chisa Umemiya

• 12 min read
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Paris Agreement Article 6 Regular Update / SBTi Corporate Net Zero Standard v2

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 a newsletter from

Deloitte Tohmatsu Sustainacraft, Inc. This article is Section B (Policy Trends) of our VCM Updates (Voluntary Carbon Market updates).

Introduction

In this month's highlight (insight article), we examine the future of nature-based Carbon Credits following the announcement of the SBTi "Corporate Net Zero Standard (CNZS) v2.0." The key factor is "Carbon Durability." The positioning of nature-based Credits will change significantly depending on whether they are categorized as Removals or Reduction/Avoidance.

We will cover the following topics:

  • Policy Trends
    • Major Global Regulatory Trends
      • Paris Agreement Article 6.2 (Bilateral Cooperation)
      • Paris Agreement Article 6.4 (Paris Agreement Crediting Mechanism)
      • National Carbon Policies
      • Non-state Actor Initiatives
    • UNFCCC Registry
  • Insight Article
    • SBTi "Corporate Net Zero Standard v2.0" - What happens to nature-based Credits Beyond Value Chain Mitigation?

Keywords: Article 6, Bilateral Cooperation, PACM, SBTi, CNZS

Paris Agreement Article 6.2 Related

The first highlight is the completion of the international transfer of ITMOs (Internationally Transferred Mitigation Outcomes) under the JCM. A total of approximately 86,000 tons were transferred from four renewable energy (solar) projects under the Japan-Mongolia JCM (Source).

Supply and cooperation frameworks are also progressing in other countries:

  • Brazil has launched a public consultation on the draft text for ITMO regulations, which had been delayed (Source). Since expressing its intent to utilize Article 6 in its second NDC at the end of 2024, Brazil has been watched as a major South American country with high supply potential. With the legal framework moving forward, full-scale project creation is expected. According to the published draft resolution, the Brazilian government aims to authorize the transfer and sale of up to 50 million tons (50 MtCO2e) of ITMOs to the international market for the 2031-2035 period (Source).
  • UNIDO (United Nations Industrial Development Organization) has started calling for JCM projects in Africa (Source). The JCM, which previously skewed toward Asia, is now expanding into Africa.
  • Indonesia and Singapore signed an MoU on carbon credit cooperation (Source). The MoU includes activities to identify high-quality carbon projects and work toward Article 6 bilateral cooperation.

Paris Agreement Article 6.4 Related

Regarding Paris Agreement Article 6.4 (the new mechanism: PACM), the transition process from the old mechanism has reached a major milestone.

This month marked the deadline for CDM project transition applications to PACM (June 30, 2026).

  • Specifically, there are concerns that short-term supply may concentrate in a few countries, as China and India withheld many approvals to prioritize achieving their own NDCs (Source).
  • CDM Credits that have not transitioned are scheduled to be cancelled on July 1, 2027, and the impact on market liquidity is being closely monitored.

On the other hand, the development of rules for new project creation under PACM is progressing:

  • The Supervisory Body recommended two new Methodologies (Source).
  • UN draft texts have established rules for first transfers and real-time reporting, advancing the digitalization of administrative procedures (Source).

National Carbon Policies

In July 2026, discussions on Carbon Pricing and market integration deepened across Europe, Oceania, and Asia.

  • EU ETS (Emissions Trading System) Reform Discussions:
    • A review by the European Commission pointed out that revenue recycling (redistribution to households or tax reductions) is key to gaining public support for carbon pricing (Source).
    • Furthermore, discussions continue regarding the possibility of reintroducing international Credits into the EU ETS in the future (Source).
  • CBAM (Carbon Border Adjustment Mechanism):
    • The UK published details on emission calculation rules for the implementation of its CBAM (Source).
    • In the EU, a rule was agreed upon to apply country-specific default values to importers attempting to exploit the system (Source).
  • Integration of Carbon Removals:
    • New Zealand introduced a legislative amendment bill to integrate Carbon Removals into its ETS (Source). This serves as a pioneering case for incorporating removal technologies into the market to achieve Net Zero.
  • Trends in Asia:
    • Taiwan announced plans to launch a pilot phase of its ETS by 2028 (Source).

Non-state Actor Initiatives

Alongside a review of the first half of 2026, data confirming a "shift to quality" in the Voluntary Carbon Market (VCM) was released in succession.

According to analysis results this month (Sylvera/Abatable), the VCM in the first half of 2026 showed a trend where "Retirement volumes decreased slightly, but market value increased" (Source 1, Source 2).

  • This is analyzed as a result of Buyers prioritizing high-quality Credits, such as CCP-approved Credits, and paying a price premium.
  • It was also noted that the Oversupply state, which had persisted for the last decade, has been moving toward resolution over the past two years.

Initiative Trends:

  • SBTi launched a call for input on the latest draft of the Net Zero Standard for the power sector (Source).
  • ICVCM released new guidance for navigating high-integrity markets, continuing to strengthen market discipline (Source).
  • In the agricultural sector, the PAC (Partnership for Agricultural Carbon), supported by VCMI, has begun promoting climate-resilient agriculture using carbon finance in regions like Latin America (Source).

2. UNFCCC Updates

This month, there were a total of two submissions to the UNFCCC registry. These consisted of one Biennial Transparency Report (BTR) and one Annual Information Report based on Paris Agreement Article 6.2.

There were no submissions of new or updated NDCs during the target period.

Liberia (LBR) - First Biennial Transparency Report (First BTR)

  • Submission Date: 2026-07-07 (Source)
  • Overview: This is Liberia's first BTR submission. Based on the "Enhanced Transparency Framework (ETF)" under the Paris Agreement, it reports on the country's emission status and progress toward achieving its NDC.

Article 6.2 Related Reports

Ghana (GHA) - Annual Information Report v1.0

  • Submission Date: 2026-06-26 (Source)
  • Analysis:
    • Approval Record: The Government of Ghana approved mitigation outcomes arising from Methane avoidance activities in the agricultural sector based on the Cooperative Approach (ID: CA0002).
    • Approved Volume: A substantial volume of 1,125,655 t-CO2eq has been approved for the target period of 2021 to 2030.
    • Implementation Structure: The United Nations Development Programme (UNDP) Ghana office is involved as an approved entity, serving as a model case for Article 6 utilization in coordination with international organizations.
    • Registry Management: A tracking system using unique identifiers for ITMOs is operational, and the definition of the First International Transfer is also clearly stated.

3. Insight Article: SBTi "Corporate Net Zero Standard v2.0" - What happens to nature-based Credits Beyond Value Chain Mitigation?

Introduction

The Science Based Targets initiative (SBTi) "Corporate Net Zero Standard" is a leading standard for companies to set Net Zero targets based on climate science, with over 2,000 companies participating in Japan alone (Source). In June 2026, SBTi announced the revised "Version 2.0" (Source, effective February 1, 2027).

One of the core components of this revision is the replacement of "Beyond Value Chain Mitigation (BVCM)," which was previously merely a voluntary recommendation, with a phased system called "Ongoing Emissions Responsibility (OER)." In this OER framework, there is a strong emphasis on carbon "durability," and the required portfolio construction differs significantly between the voluntary phase starting in 2027 and the mandatory phase from 2035 onwards. This represents a signal that cannot be ignored by companies involved in the development and procurement of nature-based Carbon Credits.

Below, we explain the basis for this conclusion in the following order: (1) Background and overview of OER introduction, (2) Mandatory phase from 2035 onwards, (3) Immediate voluntary phase, and (4) Reactions from various sectors.

1. Background and Overview of OER Introduction from BVCM

Companies will continue to emit GHGs until they reach their Net Zero targets (including Scopes 1-3) by 2050 or earlier. Regarding these "ongoing emissions," SBTi has established a framework to encourage companies to support other mitigation outcomes or climate actions separately from their own targets (= "climate contribution").

© 2026. For information, contact Deloitte Tohmatsu Group.