Why Article 6 of Paris Agreement is a powerful tool for India

To strengthen the delivery and efficiency of climate finance, the carbon markets under Article 6 (A6) of the Paris Agreement were made fully operational at COP29. According to the A6 Implementation Partnership, there are 89 cooperation arrangements made under Article 6.2 across 58 Parties, reflecting the growing momentum and acceleration of bilateral and plurilateral carbon market collaborations. The adoption of the Paris Agreement Crediting Mechanism (Article 6.4) at COP29 marked a milestone in the transition from the Clean Development Mechanism. This step has paved the way for a more rigorous, transparent, and globally aligned crediting framework under the Paris Agreement.

After years of anticipation and careful deliberation, in August 2025, India entered a new era of carbon markets by signing the Joint Crediting Mechanism (JCM). This effectively operationalised Article 6.2 of the Paris Agreement and signalled a new chapter in international climate cooperation.

The potential of Article 6

Why does participation of India in the A6 mechanism hold critical significance for India? Partnerships within A6 can translate into transfer of advanced tech, support to research and development, strengthen bilateral relations and channel much-needed climate finance into the economy. This can be a lever for socio-economic transformation that aligns with domestic climate goals, especially for a rapidly growing country such as India.

Critically, the potential of A6 market mechanisms (both 6.2 and 6.4) is not just restricted to generating climate finance through the exchange of carbon credits, known as internationally transferred mitigation outcomes. Instead, the real prize lies in using this mechanism to accelerate a low-carbon industrial and technological transformation, while building resilient trade relationships in a carbon-constrained world.

The Paris Agreement’s Rule book sets out the architecture for A6. It allows countries to cooperate bilaterally or multilaterally, transferring emissions reductions while ensuring rigorous accounting to avoid double counting. India’s new JCM partnership with Japan is an early example of how this cooperation can work.

To operationalise both Article 6.2 and 6.4, the Indian government has already strategically identified a first set of 13 eligible activities keeping both developmental and climate goals in balance. These are high-end, emerging technologies that can fundamentally shift the country’s emissions profile and significantly contribute to the acceleration of India’s economic growth trajectory. For the next three years, credits can be generated in sectors which hold most attention for the country in all fronts. These include renewable energy with storage; solar thermal power plants and offshore wind; green hydrogen and compressed bio-gas; emerging mobility solutions like fuel cells; high-end energy-efficiency technologies; and sustainable aviation fuel.

The current Indian list of activities reflects a deliberate and forward-looking strategy that aligns with India’s long-term goals of sustainable growth and deep decarbonisation. As India continues to depend on coal for power generation, emerging solutions such as offshore wind, large-scale energy storage, and marine energy can accelerate diversification of its energy mix. Green hydrogen, particularly in industrial applications like steelmaking, offers a pathway to significantly lower emissions intensity across critical sectors. In hard-to-abate industries such as cement, carbon capture, utilisation, and storage provides a credible route to deep decarbonisation. Each of these technologies complements national priorities while strengthening the foundation for a low-carbon economy.

From intent to action

However, to unlock these opportunities, India must now move from intent to action. Key policy priorities stand out. First, strengthen the domestic framework. India has appointed a Designated National Authority for A6, but so far it is yet to detail the scope of the activities to be implemented. This necessitates the articulation of rules governing the issuance of Letters of Authorisation, the application of corresponding adjustments, and the establishment of a stable legal and regulatory framework for carbon trading.

Second, streamline project clearances. A steering committee could be created at the Cabinet level to offer broader guidelines and regularly take stock. CEEW research shows that voluntary carbon projects in India take over 1,600 days to register for Agriculture, Forestry and Other Land Use projects, compared to less than 400 days elsewhere in Asia. For A6 projects, where land and multiple stakeholders are often involved, a single-window clearance system is essential.

Third, build and strengthen the removals market. The global demand for carbon removals is rising. Article 6 provides an ideal platform to build a domestic market for activities like Biochar and Enhanced Rock Weathering, positioning India as a supplier of high-quality removal credits.

Fourth, strengthen South–South collaboration. India can take the lead in building shared systems, knowledge networks, and financing models across developing countries.

India’s first step under A6 marks more than a technical milestone; it is an opportunity to access advanced technologies, attract climate-aligned finance, and deepen international partnerships.