The Paris Agreement Crediting Mechanism after COP29

(Photo: UN Climate Change – Kamran Guliyev)

The Paris Agreement Crediting Mechanism (PACM) under Article 6.4 of the Paris Agreement represents a significant evolution in international carbon markets. It is a centralized, UNFCCC-overseen carbon crediting mechanism which allows activities to generate emission reduction or removal credits, so called Article 6.4 Emission Reductions (A6.4ERs). A6.4ERs – once authorized – can be transferred internationally and used by countries toward their Nationally Determined Contributions (NDCs) or for other international mitigation purposes (OIMP).

For buyer and seller countries, project developers and investors eager to participate in this new mechanism, understanding the current state of operationalization is crucial. This paper addresses several key questions:

1. Which elements of the PACM are already in place and operational?
2. Which components are still under development, and when can they be expected?
3. What are the potential bottlenecks in the implementation process?

The paper “The Paris Agreement Crediting Mechanism after COP29: Fundamentals in place, substance in progress” aims to provide clarity on the PACM’s operational status after the 29th Conference of the Parties to the Paris Agreement (COP29) held in Baku in November 2024, highlighting both the progress made and the work still ongoing. By distinguishing between completed components, those in development, and elements awaiting creation, the paper offers a comprehensive overview of the mechanism’s current state.

It is important to emphasize that the PACM is a fast-developing space. At and since COP29, significant progress has been made in operationalizing various aspects of the mechanism. However, many detailed standards, procedures, and guidelines are still under development, creating a dynamic environment that requires continuous monitoring.

This paper provides a snapshot of the current state of PACM implementation as of April 2025, recognizing that additional elements may be approved or modified in the coming months. For project developers and investors, understanding both what is possible now and what to expect soon is essential for strategic planning and successful participation in this evolving carbon market mechanism.

Read the paper here.

This report was prepared with support from Perspectives Climate Research and financial support from the Federal Ministry for Economic Affairs and Climate Action of Germany (BMWK).