In a move set to revolutionize the carbon credits markets globally, a United Nations panel has approved the first methodology under Article 6.4 of the Paris Agreement, which will help countries and companies offset emissions under one global standard.
The new system, Article 6.4, also known as the Paris Agreement Crediting Mechanism (PACM), ensures that carbon credits come from verifiable emissions cuts, replacing the old Clean Development Mechanism (CDM) from the Kyoto protocol.
This is the first method approved since the UNFCCC Supervisory body met in mid-October 2025 to review new market methods, and it supports renewable energy projects, especially small wind and solar developments in developing countries.
What Article 6.4 Means
Part of the Paris Agreement’s cooperation plan, Article 6.4 lets one country fund emission reduction projects in another country and count those reductions toward its own climate goals.
The system aims to:
- Stop double-counting of emission reductions.
- Improve transparency through strict monitoring.
- Build trust between developing and developed nations.
If implemented effectively, the mechanism could unlock significant economic and environmental benefits.
According to the World Bank estimations, Nationally Determined Contributions cooperation could cut up to 5 billion tonnes of emissions annually by 2030 and could also unlock around $250 billion in climate finance each year, giving investors a clear way to support credible carbon projects.
Until now, discussions around Article 6.4 have focused mainly on rules and design. The panel’s decision moves the system from theory to action. It shows that global carbon trading is ready to begin.
Experts predict global demand for carbon credits could reach 2 billion tons by 2030, and as high as 13 billion tons by 2050. The UN aims to ensure that only verified, high-quality credits enter this fast-growing market.
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