New Delhi(The Peepal): India and Japan have adopted the Rules of Implementation for the India–Japan Joint Crediting Mechanism (JCM) under Article 6.2 of the Paris Agreement.

According to the Press Information Bureau, both governments adopted the implementation rules on 8 June 2026. Earlier, India and Japan had signed a Memorandum of Cooperation on 7 August 2025.

In simple words, Japan can support low-carbon projects in India through investment, technology and technical knowledge. In return, verified emission reductions from those projects may generate carbon credits.

However, the projects cannot create credits merely through claims. Instead, independent agencies must measure and verify the actual emission reductions.

After verification, India and Japan may share the credits according to approved rules and their respective contributions. Nevertheless, the mechanism raises an important question: how many credits should India retain for its own climate targets, and how many should it transfer to Japan?

Summary

The India–Japan Joint Crediting Mechanism creates a government-backed system for developing low-carbon projects in India.

Under the mechanism, Japan may provide clean technology, investment, equipment or technical support. Meanwhile, India may provide suitable projects, industrial capacity and opportunities to reduce emissions.

Moreover, independent agencies must validate the projects and verify their results. National registries will then record the issuance, ownership and transfer of the resulting carbon credits.

Therefore, the mechanism may help India attract climate finance and advanced technology. However, India must ensure that it receives fair economic and technological benefits before transferring valuable credits abroad.

Key Points

  • India and Japan adopted the implementation rules on 8 June 2026.
  • Earlier, both countries signed a cooperation agreement in August 2025.
  • The mechanism operates under Article 6.2 of the Paris Agreement.
  • Japan may support low-carbon projects in India.
  • However, projects must produce measurable and verified emission reductions.
  • A Joint Committee will supervise project approval and credit issuance.
  • In addition, independent third parties will validate and verify projects.
  • National registries will track the carbon credits.
  • Therefore, India and Japan must prevent double counting.
  • Moreover, India must protect the credits needed for its own climate commitments.
  • Ultimately, fair credit sharing will determine the mechanism’s long-term value.

Why ABC Live Is Publishing This Report Now

The government has presented the India–Japan Joint Crediting Mechanism as an important climate-action partnership.

However, terms such as carbon credits, mitigation outcomes, corresponding adjustments and national registries remain difficult for many readers.

Moreover, this mechanism may influence India’s domestic carbon market and its future climate commitments. For example, a credit transferred to Japan may no longer remain available for India’s international climate accounting.

Therefore, ABC Live is publishing this report to explain how the mechanism will work, what India may gain and what safeguards the country needs.

For wider context, readers may also examine ABC Live’s earlier coverage of India’s Carbon Credit Trading Scheme, which explains India’s emerging domestic carbon-market framework.

What Has Happened?

India and Japan signed a Memorandum of Cooperation on the Joint Crediting Mechanism on 7 August 2025.

At that stage, the memorandum established the broad framework for bilateral climate cooperation. In particular, it allowed institutions from both countries to develop mitigation projects and allocate the resulting emission reductions according to their contributions.

Later, the first meeting of the India–Japan Joint Crediting Mechanism Joint Committee took place on 22 September 2025. During that meeting, the two sides discussed implementation and the commencement of project submissions.

Now, the two governments have adopted the Rules of Implementation. Therefore, the arrangement can move from broad cooperation towards project approval, monitoring, verification and credit issuance.

In effect, the 2025 memorandum created the partnership, while the 2026 rules explain how that partnership should operate.

What Is the Joint Crediting Mechanism?

The Joint Crediting Mechanism is a bilateral climate-cooperation system.

“Bilateral” means that two countries operate the arrangement together. In this case, those countries are India and Japan.

Under the mechanism, Indian and Japanese institutions may jointly develop projects that reduce or remove greenhouse-gas emissions in India.

Japan may contribute:

  • Climate finance
  • Advanced equipment
  • Low-carbon technology
  • Technical expertise
  • Training
  • Emission-monitoring systems
  • Project-development support

Meanwhile, India may contribute:

  • Project locations
  • Local investment
  • Industrial infrastructure
  • Skilled workers
  • Policy support
  • Opportunities for emission reduction

After implementation, independent experts will assess the project’s actual results. If the reduction meets the approved conditions, the mechanism may issue carbon credits.

Therefore, the system connects Japanese finance and technology with Indian opportunities for emission reduction.

What Is a Carbon Credit?

A carbon credit generally represents one tonne of carbon dioxide, or an equivalent amount of another greenhouse gas, reduced or removed from the atmosphere.

For example, an Indian factory may replace old machinery with a more energy-efficient system.

First, experts will estimate how much the factory would have emitted without the new technology. Next, they will compare that estimate with the emissions produced after the project.

Suppose the project achieves a verified reduction of 20,000 tonnes. In that situation, the mechanism may issue an eligible number of carbon credits for the reduction.

However, the project cannot simply declare that it has reduced emissions. Instead, it must use an approved method and provide reliable data.

Moreover, independent experts must check the calculations. Therefore, the credibility of a carbon credit depends on proper measurement and verification.

How Will the India–Japan JCM Work?

The mechanism will broadly involve several stages.

Project proposal

First, an Indian or Japanese organisation will propose a low-carbon project in India.

The proposal must describe the technology, expected emission reductions, financing and sustainable-development benefits.

Moreover, the developer must explain how it will monitor the project’s performance.

Project validation

Next, an independent third party will examine the project design.

It will check whether the proposed method can measure emissions accurately. In addition, it will assess whether the claimed reductions appear realistic.

Therefore, validation examines whether the project design is credible before the project starts generating credits.

Government approval

After validation, the Joint Committee will consider the proposal.

The committee may approve the project, reject it or seek further information. Consequently, a project cannot enter the official mechanism without government-level approval.

Project implementation

After approval, the developer will install or operate the low-carbon technology.

Meanwhile, the project must monitor its energy use, production levels and emissions.

Verification

Once the project begins operating, an independent verification body will examine its actual performance.

It will determine whether the claimed emission reductions genuinely occurred. Moreover, it may check equipment records, energy bills, production data and monitoring systems.

Credit issuance

After verification, the Joint Committee may approve the issuance of credits.

However, the number of credits issued should reflect only the reduction that the verification process confirms.

Credit allocation

India and Japan may then allocate the credits according to the approved arrangement and their respective contributions.

For example, the allocation may take account of finance, technology, local investment and project risk.

Registry tracking

Finally, both countries will record the credits in their national registries.

As a result, the registries will show whether the credits remain available, have been transferred or have already been used.

What Does Article 6.2 of the Paris Agreement Allow?

Article 6 of the Paris Agreement allows countries to cooperate in reducing greenhouse-gas emissions.

More specifically, Article 6.2 provides an accounting and reporting framework for countries that transfer mitigation outcomes internationally.

These transferred reductions are commonly known as Internationally Transferred Mitigation Outcomes (ITMOs).

A country receiving an authorised mitigation outcome may use it towards its Nationally Determined Contribution. However, the participating countries must follow transparency and accounting rules.

Most importantly, they must ensure that two countries do not claim the same emission reduction.

Therefore, Article 6.2 is not simply a private carbon-trading arrangement. Instead, it directly affects national climate accounting.

What Is a Nationally Determined Contribution?

A Nationally Determined Contribution (NDC) is a country’s climate commitment under the Paris Agreement.

Each country decides its own targets and policies. It then communicates those commitments through the United Nations climate system.

India’s commitments include reducing the emissions intensity of its economy and expanding non-fossil electricity capacity.

Japan also has its own emission-reduction targets.

The India–Japan Joint Crediting Mechanism may help both countries work towards their commitments. However, the governments must clearly identify which country will count each transferred reduction.

For wider background, readers may refer to ABC Live’s analysis of India’s climate commitments and Nationally Determined Contributions.

What Does Double Counting Mean?

Double counting occurs when more than one country claims the same emission reduction.

For example, suppose a project in India reduces emissions by 10,000 tonnes.

If India counts the full 10,000-tonne reduction towards its own climate target, Japan cannot also claim the same reduction.

Therefore, when India authorises a credit for transfer and use by Japan, India must make a matching accounting adjustment.

This process is generally called a corresponding adjustment.

In simple words, India must remove the transferred amount from the reduction that it claims for itself.

Consequently, one verified reduction should support only one country’s international climate accounting.

Without this adjustment, the same climate benefit could appear twice in international records. Therefore, preventing double counting remains one of the most important safeguards under Article 6.2.

What Is the Joint Committee?

The Rules of Implementation provide for a Joint Committee consisting of representatives from both governments.

The committee will oversee the mechanism.

Its functions may include:

  • Approving project methodologies
  • Registering eligible projects
  • Reviewing validation reports
  • Reviewing verification reports
  • Approving credit issuance
  • Supervising credit allocation
  • Monitoring sustainable-development safeguards
  • Ensuring compliance with the mechanism’s rules

The Joint Committee gives both governments a formal role in decision-making.

Therefore, private companies cannot independently create or transfer official JCM credits.

Moreover, the committee can ensure that project decisions reflect the climate interests of both countries.

What Is Third-Party Validation?

Validation examines a project before it begins generating credits.

An independent organisation checks whether the project design, emission baseline and calculation method appear credible.

For example, a proposed solar project may claim that it will replace electricity generated from fossil fuels.

In that situation, the validator will examine the project documents and the method used to calculate avoided emissions.

Moreover, the validator may examine whether the project would proceed without carbon-credit support.

Therefore, validation asks whether the project can produce credible and additional emission reductions.

What Is Third-Party Verification?

Verification takes place after the project has operated.

An independent body checks how much emission reduction actually occurred.

For example, it may examine:

  • Equipment records
  • Energy consumption
  • Production levels
  • Monitoring systems
  • Emission calculations
  • Supporting documents

Therefore, verification asks whether the project delivered the results it claimed.

Validation looks at the project design. In contrast, verification looks at the project’s actual performance.

Both processes are necessary because weak carbon credits can damage trust in the entire market.

ABC Live has earlier examined this credibility challenge in its report on climate transparency and greenwashing.

What Are National Carbon Registries?

A national carbon registry is a secure system that records the creation, ownership and use of carbon credits.

In simple terms, it works like a digital ledger.

A registry may record:

  • The project that generated the credits
  • The number of credits issued
  • The date of issuance
  • The current owner
  • Transfers between accounts
  • International transfers
  • Credits used towards climate targets
  • Credits cancelled or retired

Therefore, registries help prevent fraud, duplication and unauthorised use.

Moreover, they help governments prepare reports required under Article 6.2.

Without reliable registries, it would become difficult to know whether a credit had already been sold or used. Consequently, registry transparency is central to the system’s credibility.

What Projects May Receive Support?

The India–Japan Joint Crediting Mechanism may support different low-carbon technologies.

Possible sectors include:

  • Solar energy
  • Wind energy
  • Battery storage
  • Energy-efficient industries
  • Cleaner steel production
  • Low-carbon cement
  • Electric mobility
  • Clean public transport
  • Waste-management systems
  • Methane capture
  • Green hydrogen
  • Efficient cooling systems
  • Industrial heat recovery
  • Carbon-removal projects
  • Smart energy systems

However, the government announcement does not mean that every project in these areas will automatically qualify.

Instead, each project must meet the approved eligibility, measurement, verification and sustainable-development requirements.

Moreover, the Joint Committee may approve separate methodologies for different technologies.

ABC Live has examined one important low-carbon sector in its critical review of India’s Green Hydrogen Mission.

A Simple Example

Suppose an Indian cement plant operates with old and inefficient equipment.

A Japanese company then provides modern machinery, investment and technical support.

Before the project, the cement plant emits 100,000 tonnes of carbon dioxide during a defined period.

After installing the new system, the plant emits 75,000 tonnes.

Therefore, the project reports an emission reduction of 25,000 tonnes.

However, the project developer cannot automatically claim 25,000 credits.

First, an independent verification body must examine the production records, equipment performance and emission calculations.

If it confirms the result, the Joint Committee may issue credits for the eligible reduction.

India and Japan may then divide those credits under the approved allocation arrangement.

Therefore, the project may benefit the Indian plant, the Japanese technology provider and both countries’ climate strategies.

What Does India Gain?

The mechanism may offer India several benefits.

Climate finance

First, Japanese institutions may invest in Indian low-carbon projects.

This finance may support projects that would otherwise struggle to secure affordable funding.

Moreover, foreign investment may reduce the pressure on Indian companies to fund the full transition cost themselves.

Technology transfer

Second, Indian companies may gain access to advanced industrial equipment and clean-energy systems.

In addition, Indian workers and engineers may learn how to operate and maintain that technology.

However, technology transfer should involve more than importing machinery. It should also build local skills and manufacturing capacity.

Lower transition costs

Some low-carbon technologies require large initial investments.

Therefore, Japanese financial and technical support may reduce the cost of adopting them.

Moreover, energy-efficient technology may later reduce fuel and electricity bills.

Technical capacity

Indian institutions may gain expertise in emission measurement, project validation and carbon-credit verification.

Consequently, the mechanism may strengthen India’s wider carbon-market institutions.

Industrial modernisation

Energy-efficient technology may reduce fuel use, operating costs and emissions.

Therefore, some projects may deliver both economic and environmental benefits.

Sustainable development

Finally, well-designed projects may create employment, improve air quality and support cleaner infrastructure.

However, these benefits will depend on the quality and location of each project.

What Does Japan Gain?

Japan may receive an agreed share of the verified emission reductions.

It may then use authorised credits towards its climate commitments, subject to the Article 6.2 framework.

Moreover, Japanese companies may gain access to new markets for low-carbon equipment and services.

The mechanism can also deepen long-term industrial cooperation between India and Japan.

Therefore, Japan may receive both climate-accounting and commercial benefits.

However, Japan’s credit share should reflect its actual contribution to each project.

Will Japan Receive All the Carbon Credits?

No. Japan will not automatically receive all credits generated through a project.

Instead, India and Japan will divide the credits according to approved project arrangements and their respective contributions.

Credit allocation may consider:

  • Finance provided
  • Technology supplied
  • Project risks
  • Local investment
  • Infrastructure support
  • Contractual terms
  • Government approval

Therefore, India may retain one share of the credits, while it may authorise another share for transfer to Japan.

The Japanese Ministry of the Environment has stated that emission reductions and removals may be allocated according to each country’s contribution.

However, the final allocation should remain transparent. Otherwise, the public may not know whether India received fair value for the credits it transferred.

Why Credit Allocation Matters for India

India will need significant emission reductions to meet its present and future climate targets.

Therefore, carbon credits may have long-term strategic value.

For example, India may initially generate relatively inexpensive credits through energy-efficiency projects.

However, later reductions in steel, cement, transport or heavy industry may cost much more.

If India transfers too many low-cost credits today, it may face higher transition costs in the future.

Therefore, India should not treat carbon credits only as an immediate source of foreign finance.

Instead, it must compare the value of the investment and technology received with the future value of the credits transferred.

Moreover, the government should assess whether a proposed transfer supports India’s industrial and climate strategy.

What Are Sustainable-Development Safeguards?

A project should not qualify merely because it reduces greenhouse-gas emissions.

It must also avoid serious harm to people, communities and ecosystems.

Therefore, sustainable-development safeguards may examine:

  • Local employment
  • Worker safety
  • Air and water pollution
  • Forests
  • Biodiversity
  • Land use
  • Community rights
  • Public health
  • Waste generation
  • Local livelihoods

For example, a project should not claim climate benefits while damaging a natural forest or threatening a local water source.

Moreover, project developers should consult affected communities where necessary.

Therefore, environmental and social safeguards must remain part of project approval.

ABC Live has examined the wider gap between green claims and verified outcomes in its critical review of India’s green transition.

What Is Additionality?

Additionality means that the project creates an emission reduction that would probably not have happened without the mechanism.

For example, suppose an Indian company had already decided to install profitable energy-saving equipment without Japanese support.

In that situation, the carbon-credit mechanism may not have caused an additional reduction.

However, suppose high costs or technical risks had prevented the company from proceeding.

If Japanese support then makes the project possible, the resulting reduction may be additional.

Therefore, additionality separates genuinely new climate action from ordinary business decisions.

Moreover, this principle prevents companies from receiving carbon credits for projects that would have happened anyway.

Without strong additionality rules, the mechanism could create credits without producing new climate benefits.

Is the JCM the Same as India’s Carbon Credit Trading Scheme?

No, although both systems relate to carbon markets.

India’s Carbon Credit Trading Scheme aims to create a domestic Indian Carbon Market.

In contrast, the India–Japan Joint Crediting Mechanism is a bilateral arrangement under Article 6.2 of the Paris Agreement.

The domestic scheme mainly concerns Indian market participants and national compliance or offset mechanisms.

Meanwhile, the JCM may involve international transfer and use of authorised mitigation outcomes.

Therefore, the accounting and policy consequences differ.

Readers can compare the systems through ABC Live’s explainer on India’s Carbon Credit Trading Scheme.

Is the JCM the Same as India’s Green Credit Programme?

No.

India’s Green Credit Programme promotes selected environmental activities, including plantation and ecological restoration.

The Joint Crediting Mechanism, however, focuses on measurable greenhouse-gas emission reductions or removals.

Moreover, JCM credits may become part of international climate accounting under Article 6.2.

Therefore, a green credit and a carbon credit do not automatically represent the same outcome.

ABC Live has separately reviewed the India Green Credit Programme.

Is the JCM a Voluntary Carbon Market?

Not exactly.

A voluntary carbon market generally allows private organisations to purchase credits for voluntary environmental or climate claims.

The India–Japan Joint Crediting Mechanism, however, operates through cooperation between two governments.

It includes:

  • Government authorisation
  • A bilateral Joint Committee
  • Independent verification
  • National registries
  • International reporting
  • Official credit allocation
  • Paris Agreement accounting

Therefore, JCM credits may directly affect national climate commitments.

Moreover, government approval gives the mechanism a different legal and policy character from an ordinary private carbon market.

What Are the Main Risks?

The mechanism may support clean investment. Nevertheless, several risks require attention.

Inflated emission baselines

A project may exaggerate the emissions that would have occurred without it.

As a result, it could receive more credits than the actual reduction justifies.

Therefore, authorities must approve realistic and evidence-based baselines.

Weak additionality

Some projects may receive credits even though they would have proceeded without carbon finance.

Consequently, the mechanism may reward existing business plans instead of creating new climate action.

Double counting

Weak accounting may allow more than one country or company to claim the same reduction.

Therefore, corresponding adjustments and accurate registries remain essential.

Transfer of inexpensive credits

India may transfer low-cost credits while retaining more expensive emission-reduction obligations for the future.

As a result, short-term financial gains could create long-term climate costs.

Unequal technology benefits

Foreign suppliers may gain commercially without building enough Indian technical or manufacturing capacity.

Therefore, project agreements should include training, knowledge sharing and local value creation.

Social and environmental harm

Projects may affect land, water, forests or local livelihoods.

Consequently, authorities must examine both carbon benefits and wider environmental impacts.

Limited public disclosure

Citizens may not know how the credits were calculated or divided.

Therefore, public disclosure will remain important for accountability.

How Can India Protect Its Interests?

India can protect its climate and economic interests through several measures.

First, it should publish clear project-eligibility rules.

Second, it should disclose approved methodologies and basic project information.

Third, it should require independent and technically strong verification.

Fourth, India should assess the future value of each credit before authorising its transfer.

Fifth, project agreements should promote local manufacturing, training and technology access.

Moreover, affected communities should receive meaningful environmental and economic benefits.

In addition, the government should explain how each major project supports India’s climate strategy.

Finally, India must align international JCM transfers with its domestic carbon-market policy and future Nationally Determined Contribution requirements.

Therefore, every credit-transfer decision should consider both immediate benefits and long-term national costs.

ABC Live Analysis

The India–Japan Joint Crediting Mechanism may become an important channel for climate finance and clean-technology cooperation.

Japan has advanced technology, capital and industrial experience. Meanwhile, India offers a large market and significant opportunities to reduce emissions.

Therefore, the partnership has a strong practical foundation.

However, the number of approved projects alone will not show whether India benefits.

Instead, the real test will be whether projects transfer useful technology, build Indian capacity and create reductions that would not otherwise occur.

Moreover, India must avoid becoming only a low-cost supplier of carbon credits.

The country should retain sufficient emission reductions for its own climate commitments. In addition, it should receive fair economic and technological value for every credit transferred.

Therefore, transparent credit allocation, reliable verification and corresponding adjustments will remain central to the mechanism’s success.

The partnership may work well when both countries share the costs, risks and benefits fairly. However, it may create problems if India transfers strategic carbon assets without adequate long-term returns.

Consequently, the mechanism should support India’s climate transition rather than merely provide credits for another country’s targets.

What Happens Next?

The two governments can now operationalise the adopted rules.

First, the Joint Committee may approve methodologies and consider project applications.

Next, Indian and Japanese companies may identify suitable low-carbon projects.

Meanwhile, independent bodies will need to validate project designs and verify actual emission reductions.

In addition, both governments must operate registries and meet their Article 6 reporting obligations.

Eventually, the first projects may obtain registration and begin generating verified reductions.

Therefore, the real test will begin when the authorities issue and allocate the first credits.

At that stage, project transparency, credit sharing and corresponding adjustments will show how the mechanism works in practice.

Sources and Resources

ABC Live reviewed and relied upon the following official and related sources:

The PIB announcement dated 16 June 2026 provided the information that India and Japan adopted the Rules of Implementation on 8 June 2026.

Moreover, ABC Live reviewed official Article 6 material to explain international transfers, corresponding adjustments and double counting.

Related ABC Live Reports

Frequently Asked Questions

What is the India–Japan Joint Crediting Mechanism?

It is a bilateral system through which India and Japan can develop low-carbon projects and share verified emission reductions.

When did the governments adopt the implementation rules?

India and Japan adopted the Rules of Implementation on 8 June 2026.

What does Article 6.2 allow?

It allows countries to cooperate and transfer authorised mitigation outcomes for use towards their climate commitments.

Will Japan finance projects in India?

Japanese companies, agencies or financial institutions may provide finance, equipment or technical assistance. However, the structure will vary between projects.

Who will check the emission reductions?

Independent third-party bodies will validate project designs and verify actual emission reductions.

Can India and Japan both claim the same reduction?

No. Therefore, both governments must prevent double counting through corresponding adjustments and accurate records.

Will every clean-energy project qualify?

No. Instead, each project must follow approved methodologies and meet the mechanism’s eligibility and verification requirements.

Why is the mechanism important for India?

It may bring investment, advanced technology, technical expertise and support for low-carbon development.

What is the biggest concern?

India must ensure that it does not transfer valuable emission reductions without receiving fair financial, technological and developmental benefits.

What is the main conclusion?

The mechanism can support India’s low-carbon transition. However, transparent accounting, genuine emission reductions and fair credit allocation will determine its success.

Research Partnership Note: ABC Live collaborates with The Peepal as its Research and Sustainability Partner for reports concerning climate change, environmental policy, biodiversity, energy transition and ecological governance. The Peepal contributes research support and sustainability-focused inputs. Meanwhile, ABC Live independently exercises full editorial judgment and retains responsibility for the report’s content and publication.

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