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India and Japan have adopted the Rules of Implementation for the Joint Crediting Mechanism (JCM) under Article 6.2 of the Paris Agreement, operationalising bilateral cooperation on carbon markets and low-carbon technologies.

What is the Joint Crediting Mechanism (JCM)?

• The Joint Crediting Mechanism (JCM) is a bilateral carbon credit mechanism proposed by the Government of Japan and officially launched in 2013.
• It promotes the deployment of advanced decarbonisation technologies, products, systems, and infrastructure in partner countries through Japanese investment, while contributing to sustainable development and greenhouse gas (GHG) emission reductions.
• Implemented in accordance with Article 6 of the Paris Agreement, the mechanism enables participating countries to generate and share carbon credits from verified emission reduction projects, thereby supporting the achievement of their respective Nationally Determined Contributions (NDCs).
• India is among the 31 partner countries participating in the JCM.

How does the JCM Work?

Under the mechanism:

• Japan provides financial support and advanced low-carbon technologies to partner countries.
• Emission reduction projects are jointly implemented and monitored.
• Verified reductions in greenhouse gas emissions generate carbon credits.
• The credits are shared between Japan and the partner country based on agreed rules, helping both countries achieve their NDC commitments under the Paris Agreement.

The JCM functions within the framework of the United Nations Framework Convention on Climate Change (UNFCCC) and complements existing international carbon market mechanisms such as the Clean Development Mechanism (CDM) and Joint Implementation (JI).

Priority Sectors

The India–Japan JCM focuses on sectors with significant decarbonisation potential, including:

• Renewable energy with energy storage
• Sustainable Aviation Fuel (SAF)
• Compressed Biogas (CBG)
• Green Hydrogen
• Green Ammonia
• Hard-to-abate industrial sectors