Japan–Vietnam Carbon Deal Updated Ahead of New Trading Rules

Vietnam and Japan have strengthened their bilateral carbon cooperation, formally updating their Joint Crediting Mechanism (JCM) to comply with Article 6 of the Paris Agreement—the multilateral framework governing internationally traded carbon units.

Japanese and Vietnamese delegates signing an updated Joint Crediting Mechanism agreement aligned with Article 6 of the Paris Agreement, with reforestation project and wind turbines in the background. AI generated picture.

The revised agreement, signed on 2 May 2026, establishes that credits verified under the JCM are eligible to qualify as Internationally Transferred Mitigation Outcomes (ITMOs). The two countries confirmed that verified reductions and removals from JCM projects can count towards both nations' Nationally Determined Contributions (NDCs)—their respective commitments under the Paris Agreement.

The document explicitly rules out double use of credits. Neither government will apply JCM mitigation projects to any other international mechanism, with the aim of preventing double counting in emissions accounting.

The original JCM agreement between the two countries was signed in July 2013. The updated version extends the partnership to 2030, with an automatic five-year renewal.

To comply fully with Article 6, participating countries must report the terms of their cooperative agreements, authorise projects individually, and submit annual project-level reports.

The update comes as Vietnam prepares to bring its regulation on international carbon credit trading into force on 19 May 2026. The final version imposes stricter limits on the volume of units permitted for international transfer than earlier drafts had set out.

Japan has been building out its JCM network across multiple countries and received its first Article 6-aligned JCM credits from a project in Thailand in November 2025. The country has committed to reduce emissions by 46% by 2030, 60% by 2035, and 73% by 2040 from 2013 levels, with JCM credits contributing to those national targets.