Japan Revamps Carbon Credit Scheme to Meet Paris Agreement Standards

Japan has launched a consultation to align its Joint Crediting Mechanism (JCM) with the carbon market rules established under Article 6 of the Paris Agreement. This initiative follows decisions made at COP29 in Baku, where global carbon market standards were finalized.

Situated on Yakushima Island, the Yakushima Forests rank among Japan's largest woodlands and are home to ancient Japanese cedar trees, some over 2,000 years old. AI generated picture.

The Ministry of Economy, Trade, and Industry (METI) has outlined plans to modernize the JCM’s verification, registration, and crediting processes to comply with Article 6 requirements. Japan aims to secure 100 million carbon credits by 2030 to fulfill its Paris Agreement targets.

The JCM, operational since 2013, predates the Paris Agreement and the newly agreed Article 6 framework, making updates essential for compatibility. Among the COP29 outcomes were rules for authorizing carbon credits, known as Internationally Transferred Mitigation Outcomes (ITMOs), and connecting national registries with the Article 6.4 mechanism.

METI is committed to expanding the JCM’s global reach while streamlining its procedures. The Japan International Cooperation Agency will play a key role in implementing methodologies under Article 6.4 to ensure efficient operation.

The consultation document includes draft rules for recording emissions reductions under the JCM, inviting stakeholders to submit feedback by January 6. Over the past decade, the JCM has expanded to 29 countries with over 300 projects. To handle the increasing volume of administrative work, METI plans to delegate tasks to an external organization under government oversight.

This initiative represents a pivotal step in harmonizing Japan’s carbon offset program with international standards, fostering transparency and supporting global efforts to support nature restoration.