India-Japan Joint Crediting Mechanism – A New Frontier for International Carbon Trading Under Article 6
Introduction: A New Chapter in India's Carbon Journey
India's carbon market is no longer just a domestic affair. On June 8, 2026, India and Japan adopted the "Rule of Implementation" for their Joint Crediting Mechanism (JCM) under Article 6.2 of the Paris Agreement. This landmark agreement opens a new frontier for international carbon credit trading, allowing Indian projects to attract Japanese investment and technology while generating internationally transferable carbon credits.
The JCM is not just another carbon market mechanism. It represents a strategic partnership between two of Asia's largest economies, designed to mobilise climate finance, transfer low-carbon technologies, and support sustainable development. For Indian project developers, it offers access to Japanese capital and technology. For India, it supports the achievement of its Nationally Determined Contributions (NDCs).
With the CCTS scheduled to begin active trading in Q4 2026 and the JCM now operational, Indian businesses have more opportunities than ever to monetise their emission reductions. This guide provides a comprehensive overview of the India-Japan Joint Crediting Mechanism, how it works, what it means for Indian project developers, and how to participate.
What Is the Joint Crediting Mechanism (JCM)?
Definition
The Joint Crediting Mechanism (JCM) is a bilateral carbon crediting framework established under Article 6.2 of the Paris Agreement. It enables cooperation between two countries on mitigation activities that deliver GHG emission reductions or removals, while supporting sustainable development outcomes.
The India-Japan Partnership
India and Japan signed the Memorandum of Cooperation (MoC) for the JCM in 2025. On June 8, 2026, the two countries adopted the "Rule of Implementation," finalising the operational framework for the mechanism.
The Strategic Significance
| Aspect | Significance |
|---|---|
| Investment | Attracts Japanese investment to Indian climate projects |
| Technology | Brings low-carbon technologies to India |
| Capacity Building | Builds technical capacity in India |
| Climate Action | Supports both countries' NDCs |
| Carbon Credits | Enables cross-border credit sharing |
The Article 6.2 Framework
Article 6.2 of the Paris Agreement provides for cooperative approaches to climate action, including internationally transferred mitigation outcomes (ITMOs). The JCM is India's first major bilateral arrangement under Article 6.2.
The Article 6.2 Framework: Why This Matters
What Is Article 6.2?
Article 6.2 of the Paris Agreement allows countries to voluntarily cooperate to achieve their NDCs through the transfer of mitigation outcomes. These internationally transferred mitigation outcomes (ITMOs) can be used by one country to meet its NDC commitments.
Why Article 6.2 Matters for India
| Reason | Explanation |
|---|---|
| NDC Achievement | ITMOs can help India meet its NDC targets |
| Investment | Attracts international climate finance |
| Technology Transfer | Facilitates access to low-carbon technologies |
| Market Access | Creates new markets for Indian carbon credits |
| Global Leadership | Positions India as a leader in international carbon markets |
India's Article 6 Strategy
India is actively exploring Article 6 opportunities while safeguarding the integrity of its carbon market and sovereign mitigation goals. The JCM with Japan is the first major bilateral arrangement, and more may follow.
The Rule of Implementation
The Rule of Implementation defines:
- Robust governance arrangements
- A Joint Committee with representatives from both governments
- Transparent project approval procedures
- Third-party validation and verification
- Sustainable development safeguards
- National registries to track the issuance and transfer of credits
The Rule of Implementation: What Was Adopted on June 8, 2026
The Adoption
On June 8, 2026, the Government of India and the Government of Japan adopted the "Rule of Implementation" of the Joint Crediting Mechanism under Article 6.2 of the Paris Agreement.
What the Rule Covers
| Element | Description |
|---|---|
| Governance | Joint Committee with representatives from both governments |
| Project Approval | Transparent procedures for project approval |
| Validation and Verification | Third-party validation and verification |
| Safeguards | Sustainable development safeguards |
| Registries | National registries to track issuance and transfer |
The Joint Committee
The Joint Committee, comprising representatives from both governments, will oversee the implementation of the JCM. This ensures governance and accountability.
The Ministry's Statement
"The Joint Crediting Mechanism demonstrates India's firm commitment to climate action. It will catalyse investment, technology transfer, and capacity-building for projects involving low-carbon technologies in India to support climate change mitigation and sustainable development," the ministry said.
Key Features of the India-Japan JCM
Feature 1: Bilateral Cooperation
The JCM is a bilateral mechanism between India and Japan. It enables cooperation on mitigation activities that deliver GHG emission reductions or removals.
Feature 2: Investment and Technology Transfer
Japanese investment and technology can help fund projects in India that reduce or remove greenhouse gas emissions. This includes:
- Financial investment in Indian climate projects
- Transfer of low-carbon technologies
- Technical capacity building
Feature 3: Carbon Credit Sharing
Carbon credits generated through the JCM can be shared between the two countries. This means:
- India can retain a portion of the credits for its NDC
- Japan can use credits to meet its climate targets
Feature 4: Sustainable Development
The JCM supports sustainable development outcomes in India. Projects must contribute to sustainable development, not just emission reductions.
Feature 5: Robust Governance
The Rule of Implementation defines robust governance arrangements, including a Joint Committee, transparent procedures, and national registries.
How the Mechanism Works: From Project to Credit
The Project Cycle
| Phase | Description |
|---|---|
| 1. Project Identification | Identify eligible project in India |
| 2. Project Development | Develop project design and secure financing |
| 3. Approval | Submit project for approval by the Joint Committee |
| 4. Implementation | Implement the project |
| 5. Monitoring | Monitor emission reductions |
| 6. Verification | Third-party verification of emission reductions |
| 7. Credit Issuance | Credits issued and recorded in national registries |
| 8. Credit Transfer | Credits transferred between countries as agreed |
The Role of National Registries
National registries will track the issuance and transfer of credits. This ensures transparency and prevents double counting.
The Role of Third-Party Verifiers
Third-party validation and verification are required. This ensures the environmental integrity of credits.
The Role of the Joint Committee
The Joint Committee oversees the entire process, from project approval to credit transfer.
What Types of Projects Qualify?
Eligible Project Types
The JCM covers projects that reduce or remove greenhouse gas emissions. Eligible project types include:
| Project Type | Description |
|---|---|
| Renewable Energy | Solar, wind, hydro, biomass |
| Energy Efficiency | Industrial, commercial, residential |
| Waste Management | Waste-to-energy, landfill gas capture |
| Forestry | Afforestation, reforestation, forest management |
| Agriculture | Soil carbon, regenerative agriculture |
| Transport | Electric vehicles, modal shift |
Technology Requirements
Projects must use low-carbon technologies. Japanese technology transfer is a key component of the mechanism.
Sustainable Development Requirements
Projects must contribute to sustainable development outcomes in India. This includes:
- Economic development
- Social benefits
- Environmental protection
NDC Contribution
Projects must contribute to the achievement of India's Nationally Determined Contributions.
The Governance Structure: The Joint Committee
What Is the Joint Committee?
The Joint Committee is a governance body with representatives from both the Indian and Japanese governments. It oversees the implementation of the JCM.
Responsibilities of the Joint Committee
| Responsibility | Description |
|---|---|
| Project Approval | Approve projects under the JCM |
| Rule Interpretation | Interpret the Rule of Implementation |
| Oversight | Monitor the implementation of the mechanism |
| Dispute Resolution | Resolve disputes between the parties |
| Reporting | Report on the mechanism's performance |
How the Committee Operates
The Joint Committee is expected to meet regularly to review project proposals, approve new projects, and oversee the mechanism's implementation.
The Significance for Project Developers
For Indian project developers, the Joint Committee is the approving authority for JCM projects. Understanding its requirements is essential for successful participation.
Benefits for Indian Project Developers
Benefit 1: Access to Japanese Investment
| Aspect | Benefit |
|---|---|
| Financing | Access to Japanese capital for climate projects |
| Terms | Potentially favourable financing terms |
| Scale | Ability to scale projects with Japanese investment |
Benefit 2: Access to Japanese Technology
| Aspect | Benefit |
|---|---|
| Technology Transfer | Access to advanced low-carbon technologies |
| Capacity Building | Build technical capacity in India |
| Innovation | Exposure to cutting-edge climate solutions |
Benefit 3: International Carbon Credits
| Aspect | Benefit |
|---|---|
| Market Access | Access to international carbon markets |
| Price Premium | Potential for premium pricing |
| Diversification | Diversify revenue sources |
Benefit 4: NDC Contribution
| Aspect | Benefit |
|---|---|
| National Recognition | Contribution to India's NDC targets |
| Government Support | Potential for government support |
| Reputation | Enhanced climate leadership reputation |
Benefits for India's Climate Goals
Benefit 1: NDC Achievement
| Aspect | Benefit |
|---|---|
| ITMOs | Internationally transferred mitigation outcomes help meet NDC targets |
| Flexibility | Additional flexibility in achieving NDC commitments |
| Ambition | Enables more ambitious climate action |
Benefit 2: Investment Mobilisation
| Aspect | Benefit |
|---|---|
| Climate Finance | Attracts international climate finance |
| Private Investment | Catalyses private investment |
| Scale | Enables scaling of climate action |
Benefit 3: Technology Transfer
| Aspect | Benefit |
|---|---|
| Innovation | Access to advanced low-carbon technologies |
| Capacity | Builds domestic technical capacity |
| Competitiveness | Enhances industrial competitiveness |
Benefit 4: Global Leadership
| Aspect | Benefit |
|---|---|
| Paris Agreement | Reinforces India's commitment to the Paris Agreement |
| International Cooperation | Demonstrates international cooperation |
| Reputation | Enhances India's climate leadership reputation |
The CBAM Connection: International Crediting and Export Competitiveness
The CBAM Challenge
India's steel and aluminium exports to the European Union fell 24.4% in FY 2025, with steel alone down 35.1%, before any Carbon Border Adjustment Mechanism (CBAM) financial obligation had taken effect. The decline suggests European buyers are already reorienting toward lower-emission producers.
How International Crediting Can Help
| Aspect | Benefit |
|---|---|
| Carbon Compliance | JCM credits demonstrate carbon compliance |
| CBAM Deduction | Carbon prices paid in India could be offset against CBAM liabilities |
| Competitiveness | Maintains export competitiveness |
The India-EU FTA CBAM Annexure
The India-EU FTA includes provisions for carbon price recognition. JCM credits could be part of this framework.
The Strategic Opportunity
Indian companies that participate in the JCM and generate internationally recognised credits will be better positioned to:
- Meet CBAM requirements
- Maintain export competitiveness
- Access premium markets
How the JCM Differs from the CCTS Offset Mechanism
The CCTS Offset Mechanism
| Aspect | CCTS Offset Mechanism | JCM |
|---|---|---|
| Scope | Domestic | International (India-Japan) |
| Participants | Indian entities | Indian entities with Japanese partners |
| Credits | CCCs (Carbon Credit Certificates) | Internationally Transferred Mitigation Outcomes (ITMOs) |
| Market | Indian market | International market |
| Investment | Domestic investment | Japanese investment and technology |
| Governance | BEE | Joint Committee (India-Japan) |
Complementarity
The JCM and the CCTS offset mechanism are complementary. Indian project developers can potentially:
- Register projects under both mechanisms
- Generate CCCs for the domestic market
- Generate ITMOs for international transfer
The Strategic Choice
| Factor | Consideration |
|---|---|
| Target Market | Domestic (CCCs) vs. International (ITMOs) |
| Investment | Domestic vs. Japanese investment |
| Technology | Domestic vs. Japanese technology |
| Governance | BEE vs. Joint Committee |
| Price | Domestic price vs. International price |
Opportunities for Indian Businesses
For Project Developers
| Opportunity | Description |
|---|---|
| Access Capital | Japanese investment for climate projects |
| Access Technology | Advanced low-carbon technologies |
| International Credits | Generate internationally tradeable credits |
| NDC Contribution | Contribute to India's NDC targets |
For Japanese Businesses
| Opportunity | Description |
|---|---|
| Investment | Invest in Indian climate projects |
| Technology | Transfer low-carbon technologies |
| Credits | Acquire carbon credits for climate targets |
| Market Access | Access Indian markets |
For Indian SMEs
| Opportunity | Description |
|---|---|
| Technology Access | Access to Japanese low-carbon technologies |
| Capacity Building | Build technical capacity |
| International Credibility | Enhance credibility through international partnership |
Our Services
| Service | What We Do |
|---|---|
| JCM Eligibility Assessment | Determine if your project qualifies under the JCM |
| Project Design Support | Help you design projects that meet JCM requirements |
| Joint Committee Engagement | Guide you through the approval process |
| Technology Identification | Help you identify suitable Japanese technologies |
| Investment Facilitation | Connect you with potential Japanese investors |
| Credit Monetisation | Help you monetise JCM credits |
| Legal Documentation | Draft watertight agreements |
Why Choose Carboned.in?
| Reason | Why It Matters |
|---|---|
| Legal Expertise | Led by Siddharth Gupta, Advocate, Calcutta High Court |
| Regulatory Knowledge | Deep understanding of Article 6.2 and the JCM |
| International Experience | Experience with cross-border carbon transactions |
| End-to-End Support | From assessment to credit monetisation |
Your first consultation is completely free. No obligation. Just honest advice.
Conclusion: A Strategic Opportunity for Early Movers
The India-Japan Joint Crediting Mechanism represents a significant opportunity for Indian project developers. With the Rule of Implementation adopted on June 8, 2026, the mechanism is now operational.
Key Takeaways
| Aspect | What You Need to Know |
|---|---|
| Mechanism | India-Japan Joint Crediting Mechanism |
| Legal Basis | Article 6.2 of the Paris Agreement |
| Adoption Date | June 8, 2026 |
| Key Benefits | Japanese investment, technology transfer, international credits |
| Governance | Joint Committee with representatives from both governments |
| Project Types | Renewable energy, energy efficiency, waste management, forestry, agriculture, transport |
The Choice Is Yours
| Option | Outcome |
|---|---|
| Act now | Access Japanese investment and technology, generate international credits, contribute to India's NDC |
| Wait and see | Miss first-mover advantage, face higher competition later |
📞 Ready to Explore the India-Japan JCM?
Book a free consultation with Siddharth Gupta, Advocate, Calcutta High Court.
- Assess your project's JCM eligibility
- Navigate the Joint Committee approval process
- Access Japanese investment and technology
- Monetise JCM credits
Your first consultation is completely free. No obligation. Just honest advice.
How Carboned.in can help
Our team covers every dimension of India's carbon market — pick the service that matches where you are.
Frequently Asked Questions
What is the Joint Crediting Mechanism (JCM)?+
A bilateral carbon crediting framework under Article 6.2 of the Paris Agreement, enabling cooperation between India and Japan on mitigation activities.
When was the Rule of Implementation adopted?+
June 8, 2026.
What is Article 6.2 of the Paris Agreement?+
A provision enabling countries to voluntarily cooperate to achieve their NDCs through the transfer of mitigation outcomes (ITMOs).
Who approves JCM projects?+
The Joint Committee, comprising representatives from both governments.
What types of projects qualify?+
Renewable energy, energy efficiency, waste management, forestry, agriculture, and transport projects that reduce or remove GHG emissions.
Can JCM credits be used for compliance?+
Yes, JCM credits are internationally transferred mitigation outcomes (ITMOs) that can be used to meet NDC commitments.
How does the JCM differ from the CCTS offset mechanism?+
The JCM is international (India-Japan), while the CCTS offset mechanism is domestic. JCM credits are ITMOs; CCTS credits are CCCs.
What is the Joint Committee?+
A governance body with representatives from both governments that oversees JCM implementation.
Does the JCM require third-party verification?+
Yes, third-party validation and verification are required.
How can Carboned.in help?+
We provide JCM eligibility assessment, project design support, Joint Committee engagement, technology identification, investment facilitation, and credit monetisation. ---
Siddharth Gupta is the founder of Carboned.in and specialist counsel for India's carbon compliance framework — advising obligated entities, project developers, and buyers on CCTS, CR-I registration, and credit transactions.
Related Articles
Article 6 of the Paris Agreement – Opportunities for Indian Project Developers in 2026
Trade and Sustainable Development – How India's Carbon Market Is Shaping the Future of Global Trade