The Paris Agreement of 2015 gave almost every country an environmental target to meet. Article 6 is the part of that agreement that lets countries work together to reach those targets, and it is where carbon credits enter the picture. The text itself is short. The rules beneath it run deep.
Article 6 sets out three routes for cooperation: two are market-based, in which carbon credits exchange hands, and the third is one in which countries cooperate through finance, technology, and expertise, with credits kept out of it. This guide sets out the essentials in plain language: What a carbon credit is, and how the three routes under Article 6 work.
Under the Paris Agreement, each country sets its own climate plan, known as a Nationally Determined Contribution (NDC). An NDC lists the emissions cuts and environmental measures a country commits to deliver.
Article 6 rests on a simple point: a tonne of carbon dioxide has the same effect on the climate wherever it is cut, and the cost of cutting it varies widely from place to place. Cooperation allows a country to finance reductions where they can be achieved at lower cost or greater speed, and allows host countries to attract climate finance in return. Applied well, it raises collective ambition and directs limited climate finance to where it delivers the greatest effect.
The article sets out three routes for that cooperation. Article 6.2 covers direct deals between countries. Article 6.4 runs a central crediting system through the United Nations. Article 6.8 covers cooperation that involves no trading at all. The sections below take each in turn. Together, these three routes form the backbone of the Paris Agreement carbon market, and shape how carbon credits work under the treaty.
A carbon credit (or carbon unit) stands for one tonne of carbon dioxide equivalent (CO₂e) that a project has kept out of the atmosphere or removed from it. A credit earns its value from two tests: a baseline, which sets what emissions would have been without the project, and additionality, which confirms the project would go ahead only with carbon finance. An independent auditor verifies the reduction before any credit is issued. One verified tonne, one credit.
Read more: Carbon Credit Quality in 2026: A Buyer's Guide
Article 6.2 is the most direct route. Under a bilateral agreement, one country funds or hosts an emissions reduction, and the resulting units transfer from one national account to the other. These arrangements are termed cooperative approaches.
One country, typically a buyer facing a costly path to its own target, finances an emissions reduction project in another country, where the same reduction can be achieved at lower cost or greater speed. The host country delivers the reduction, and the two governments agree to transfer the outcome. Each transaction is governed by a bilateral agreement that sets the price, the standards, and the reporting obligations both sides observe. Countries design these approaches themselves, within common UN rules on transparency and accounting.
The unit that moves between countries is an Internationally Transferred Mitigation Outcome (ITMO). To keep the accounting clean, the host country makes a corresponding adjustment: it adds the transferred tonnes back to its own emissions total, so only the buyer counts them towards its NDC. This step is what stops a single reduction being claimed twice, once by the country that produced it and once by the country that paid for it. The corresponding adjustment is the piece that makes an international transfer credible.
A recent transfer illustrates the model in operation. Zambia and Switzerland have authorised the movement of roughly 1.6 million ITMOs under Article 6.2, generated through to 2030 by a clean-cooking programme that replaces charcoal stoves with biomass-pellet models. The credits count towards Switzerland's 2030 target and are acquired through the KliK Foundation, the agency the Swiss government has appointed to purchase ITMOs on its behalf. Both the Swiss and Zambian registries record the transfer, so that each tonne is claimed once.
Article 6.4 creates a single crediting system run under UN oversight, open to governments and companies alike. It is known as the Paris Agreement Crediting Mechanism, or PACM.
PACM succeeds the Clean Development Mechanism (CDM), the Kyoto-era scheme that issued nearly 2.5 billion credits over two decades. A UN body, the Article 6.4 Supervisory Body, oversees PACM: it approves the methods projects use, registers projects, and issues credits. The aim is a higher, more consistent standard than the CDM delivered, with stronger rules on additionality and clearer accounting so each reduction counts once.
The process follows a defined sequence:
PACM issues two kinds of credits, and the difference decides what a buyer can claim. The difference comes down to whether the host country keeps the tonne on its own books.
An authorised credit carries a corresponding adjustment. The host country holds its own target, so when it authorises a credit for sale abroad, it removes that tonne from its own account. The reduction then counts only for the buyer, who may set it against its own emissions and make a compensation claim.
A mitigation contribution unit carries no such adjustment. The tonne stays on the host country's account and counts towards that country's target. The buyer therefore supports climate action in the host country and makes a contribution claim.
Both kinds meet the same quality bar. The claim a buyer can make is the thing that differs, a point we return to below.
Article 6.8 covers the third route: cooperation that creates no tradable credit at all. These are called non-market approaches.
Here, countries help each other cut emissions and adapt to a changing environment through finance, technology transfer, capacity-building, and shared expertise, with no exchange of carbon units. A developed country might finance a clean-energy programme, transfer technical expertise, or support climate-resilient agriculture in a partner country, with no credit changing hands and no claim made on the reduction. The purpose is cooperation that raises ambition in areas a market transaction would struggle to reach.
A dedicated body, the Glasgow Committee on Non-market Approaches (GCNMA), oversees this work, and a UN web platform records the approaches countries put forward and helps match needs with support. Article 6.8 is the quiet part of Article 6: less visible than the credit markets, but central to the treaty’s aim of pairing mitigation with finance and development.
For a buyer, the practical question concerns less the article a credit originates from than the claim it permits.
Credits from Article 6.2, and authorised credits from Article 6.4, carry a corresponding adjustment. They can support a compensation claim, where a company balances part of its own emissions against a reduction made elsewhere. Mitigation contribution units support a contribution claim, where a company funds environmental action and states precisely that, with no balancing against its own footprint. Both are legitimate; they simply constitute different claims.
The accounting is the thread that ties Article 6 together. A corresponding adjustment keeps the same tonne from being claimed twice, by both the host country and the buyer. This is why the type of credit, and the paperwork behind it, matters more to the strength of a claim than the headline label. Anyone weighing PACM carbon credits or ITMOs works from that same principle.
The rules are sound in principle: independent verification, conservative baselines, corresponding adjustments, and methodologies approved by a UN body. Their credibility rests on how they are applied. Baselines may be set too generously, methodologies may lag behind the science, and verification may fall short. Early issuances under the new mechanism have drawn scrutiny over whether the credited reductions are reliable, which is why methodology and verification now receive such close attention.
For a reader or a buyer, the conclusion is consistent: assess the individual credit, not the route it travelled. A credit is only as strong as the baseline, the methodology, and the verification behind it. Article 6 establishes the framework; the rigour resides in the detail.
Article 6 translates a shared goal for the environment into a set of working rules: two means of trading a tonne of carbon, one means of cooperating without trading, and a common accounting system to hold them together. Understanding which route a credit originates from, and what stands behind it, is the first step towards reading the carbon market with a discerning eye.