Article 6 (A6) of Paris Agreement – Explained Pointwise

The adoption of the Paris Agreement Crediting Mechanism (Article 6.4) at COP29 marked a milestone in the transition from the Clean Development Mechanism & has paved the way for a more rigorous, transparent, and globally aligned crediting framework under the Paris Agreement. In this entire scenario of climate finance, India has transformed from a cautious negotiator into one of the most proactive global players in the Article 6 landscape.

What is Article 6 of Paris Agreement?

• Article 6 (A6) of the Paris Agreement deals with international cooperation between countries to help them meet their climate targets (NDCs – Nationally Determined Contributions) in a cost-effective and transparent way.
• It allows countries to work together, trade emission reductions, and support sustainable development, instead of acting completely alone. Thus, it effectively creates the framework for a global carbon market.

3 Pillars/Pathways of Article 6:

Article 6 is divided into three main “paths” for international cooperation:

What is the potential of Article 6?

1. Cost Reduction: The World Bank and IETA estimate that Article 6 could reduce the total cost of implementing national climate targets (NDCs) by more than $250 billion per year by 2030.
2. Efficiency: It allows “buyer” countries (often wealthier nations with high domestic costs for greening heavy industry) to fund projects in “seller” countries where the same dollar can remove much more CO2 (e.g., through massive reforestation or rapid solar deployment).
3. Emission Gap: If countries reinvest the $250 billion they save, Article 6 has the potential to remove an additional 5 gigatonnes of CO2 per year by 2030 at no extra cost. This is roughly equivalent to the annual emissions of the United States.
4. Beyond Net Zero: The Overall Mitigation in Global Emissions (OMGE) rule means that every trade under the UN-led market (Article 6.4) automatically “retires” 2% of the credits. This ensures that the market isn’t just a zero-sum game but actually results in a net benefit for the atmosphere.
5. High-Integrity Standards: Article 6 creates a “Gold Standard” for carbon credits. Credits authorized by the UN are seen as lower risk for investors, potentially unlocking trillions in private capital for projects in the Global South.
6. Adaptation Funding: Unlike previous agreements, Article 6 has a built-in “tax” for good. A 5% levy on trades under Article 6.4 goes directly to the Adaptation Fund, providing a predictable stream of billions of dollars for vulnerable nations to build sea walls, drought-resistant crops, and early warning systems.

What has been various initiatives undertaken by India with respect to Article 6?

1. The “Positive List” of Eligible Activities: To operationalize both Article 6.2 & 6.4, the Ministry of Environment, Forest and Climate Change (MoEFCC) released a finalized list of 13 eligible activities. The list prioritizes capital-intensive, emerging technologies rather than old-style offsets such as Green Hydrogen and Green Ammonia, Renewable Energy with Storage (specifically the stored component) etc. It can fundamentally shift the country’s emission profile & significantly contribute to the acceleration of India’s economic growth trajectory.  
2. India-Japan Joint Crediting Mechanism (JCM): Signed in August 2025, this is India’s most significant Article 6.2 deal. It allows Japanese companies to invest in Indian green projects (like Green Hydrogen) in exchange for a share of the carbon credits (ITMOs). India is currently in advanced negotiations with the EU, Singapore, and the UAE to create similar corridors for trading high-integrity carbon credits.
3. Carbon Credit Trading Scheme (CCTS): Launched by the Bureau of Energy Efficiency (BEE), this scheme creates a compliance market for heavy industries (like steel and cement).
4. National Carbon Registry: India has established a centralized digital registry to track every credit generated. This prevents “double counting” – a major requirement for Article 6 compliance – by ensuring a credit sold to Japan is subtracted from India’s national tally (Corresponding Adjustment).
5. NDAIAPA: India established the National Designated Authority for the Implementation of the Paris Agreement. This high-level inter-ministerial committee is the “gatekeeper” that decides which projects get the green light for international sale.

What should be the way forward for India with respect to Article 6?

1. Prioritizing “Hard-to-Abate”: India’s “Positive List” focus on high-cost, emerging technologies. India should use Article 6 funds specifically for sectors where domestic capital is insufficient – such as Green Hydrogen in steelmaking and Sustainable Aviation Fuel (SAF).
2. Finalizing “Corresponding Adjustments”: India must operationalize its National Carbon Registry to seamlessly subtract any credits sold to countries like Japan or Singapore from its own national inventory. This prevents “double counting” and maintains global trust.
3. Digital MRV (Monitoring, Reporting, and Verification): India should lead in using blockchain, AI, and satellite imagery to track carbon sequestration (especially in the new Mangrove and Forestry methodologies) to provide real-time, tamper-proof proof of impact.
4. Price Stability Mechanisms: India should implement a Price or Supply Adjustment Mechanism (PSAM). This would prevent the market from being flooded with cheap credits, which could crash the price and discourage industry investment.
5. Expanding Bilateral Corridors: Beyond Japan, India should fast-track Article 6.2 deals with the EU (to help Indian exporters navigate the Carbon Border Adjustment Mechanism/CBAM) and ASEAN countries.
6. Leading on Article 6.8 (Non-Market): India can use this often-ignored “non-market” path to secure technology transfers and direct grants for climate-resilient infrastructure, moving beyond just “trading” to “transforming.”
7. Streamline Project Clearance: According to a research done by CEEW, the carbon projects in India take over 1600 days to register for Agriculture, Forestry & Other Landuse Projects, as compared to just 400 days elsewhere in Asia. To correct this, a Steering Committee should be created at the cabinet level to offer broader guidelines & regularly take stock. For A6 projects, where land & multiple stakeholders are often involved, a single-window clearance system is essential.
8. Build & Strengthen Removal Market: The global demand for carbon removals is rising. A6 provides an ideal platform to build a domestic market for activities like Biochar & Enhances Rock Weathering, positioning India as a supplier of high-quality removal credits.
9. Strengthen South-South Collaboration: India can take the lead in building shared systems, knowledge networks, and financing models across developing countries.

Conclusion: India’s participation in the A6 mechanism hold critical significance as it can translate into transfer of advanced tech, support to R&D, strengthen bilateral relations & channel much needed climate finance into the economy. This can be a lever for socio-economic transformation that aligns with India’s domestic climate goals.