The United Nations Framework Convention on Climate Change (UNFCCC) has approved the first issuance of carbon credits under the Article 6.4 mechanism of the Paris Agreement (2015). This marks a historic transition of the global carbon market from rule-making to live operation under the Paris framework. It also establishes the benchmark for high-quality, Paris-aligned carbon credits, with over 165 projects transitioning from the older CDM to the new Article 6.4 mechanism.
First Approved Project
- Clean‑cooking project in Myanmar: It distributes efficient cookstoves that reduce harmful household air pollution and lessen pressure on local forests.
- Cooperation: The project was developed in cooperation with South Korea.
- Use of Carbon Credits: Credits authorized for Korea
- Can be transferred to Korean entities
- Usable under the Korean Emissions Trading System (ETS)
- Contribute to Korea’s Nationally Determined Contribution (NDC)
- Remaining credits: To be used by Myanmar toward its own NDC
What is Article 6.4 (Paris Agreement Crediting Mechanism)?
- It is a UN-regulated carbon market mechanism established under the Paris Agreement.
- It allows countries to raise climate ambition and implement national action plans more affordably.
- It identifies and encourages opportunities for verifiable emission reductions, attracts funding to implement them, and allows cooperation among countries and other groups to conduct and benefit from these activities.
- Example: A company in one country reduces emissions and generates certified credits. These credits can be sold to another country or company to help meet its climate targets.
- Governance Structure: The Article 6.4 mechanism is overseen by a Supervisory Body, responsible for developing and supervising the requirements and processes needed to operationalize it. This includes
- Developing and/or approving methodologies
- Registering climate mitigation activities
- Accrediting third-party verification bodies
- Managing the Article 6.4 Registry
- NOTE: Apart from article 6.4, other two components of Article 6 are
- Article 6.2: Provides accounting and reporting guidance for Parties
- Article 6.8: Provides opportunities for non-market-based cooperation
Significance
- Operationalizes global carbon market under Paris Agreement
- Enhances climate finance flows to developing countries
- Supports cost-effective climate mitigation
- Strengthens international climate cooperation
- Moves from voluntary frameworks to structured UN-backed mechanism