Navigating Article 6: What Sustainability Directors Should Consider

Article 6 of the Paris Agreement is setting the rules for international carbon market cooperation—and those rules are evolving fast. It enables credit transfers between countries (6.2) and establishes a centralized mechanism (6.4), among other cooperative frameworks, driving a more connected, accountable market. 

For many countries, these mechanisms under Article 6 offer a practical and financially strategic pathway for both host and buyer countries to mutually achieve their NDCs. This is because it opens the door to international carbon credit trading and cross-border climate financing, creating new opportunities for both public and private actors. 

As Article 6 evolves, companies will be operating in a more interconnected and complex carbon market where voluntary and compliance systems are converging. In this landscape, sustainability leaders face a choice: move quick and chase low-cost carbon credits with unclear risks, or lead with integrity through due diligence and verifiable impact, avoiding reputational pitfalls and future proofing against policy shifts. Those who stay ahead of evolving market dynamics will be better positioned to track shifting definitions of “quality,” mitigate reputational and regulatory risks, and establish robust, future-proof procurement policies. 

Article 6 provides two distinct pathways for cooperation, each with its own opportunities, risks, and strategic implications. Read on to explore what the two paths mean for your business and how you can future-proof your carbon strategy. 

Article 6.2

Under Article 6.2, countries can establish bilateral or multilateral agreements to trade Internationally Transferred Mitigation Outcomes (ITMOs). ITMOs are carbon units that typically represent emission reductions or removals and can be used by countries to meet their Nationally Determined Contributions (NDCs) or be authorized for other international uses, such as complying with CORSIA. 

A key feature of ITMOs is the corresponding adjustment mechanism, which prevents double counting when credits are transferred between countries. This enhances the credibility of claims and reduces reputational risks for buyers. 

Article 6.2 is highly flexible. The rules, safeguards, and crediting frameworks are defined by each country, which means that the terms and conditions may vary by agreement. This creates room for innovation and private sector involvement, but quality and transparency depend heavily on design. It's therefore important for companies to carefully select partners that adhere to rigorous accounting standards and safeguards to ensure the delivery of credible, high-integrity ITMOs.

Article 6.4

Article 6.4 introduces the Paris Agreement Crediting Mechanism (PACM), a centralized UN-run system designed to replace the Clean Development Mechanism (CDM) with stricter governance and standardized methodologies. Under PACM, companies can support or invest in mitigation activities abroad and receive transferable credits backed by UN oversight. Two types of credits can be issued: those with corresponding adjustments (ITMOs) and those without (A6.4 Mitigation Contribution Units). 

While Article 6.2 is built on bespoke bilateral or multilateral agreements, Article 6.4 offers a standardized, centrally governed framework that provides broader market access and comparability across projects. For companies, this translates into greater confidence in credit integrity, reduced due diligence burden, and clearer guardrails for market participation. It also lowers barriers for organizations without the resources to navigate complex bilateral arrangements. 

PACM is expected to be fully operational by the end of 2025, and many companies are already studying its requirements and credit types to prepare for participation. 

Balancing ambition with risk management is key. As the carbon market continues developing and evolving under Article 6, companies wanting to acquire carbon credits face a lot of complexity. If you want to buy carbon credits under Article 6, make sure to evaluate the following: 

• Environmental integrity: Are the credits real, additional, and permanent?  

• Socio-economic risks and value: Does the project have adequate safeguards in place to minimize negative social and environmental impacts? Does it deliver positive outcomes aligned with the UN's Sustainable Development Goals (SDGs)?  

• Regulatory risks: Do the credits meet the criteria of host and buyer countries? Are the credits aligned with the requirements of carbon pricing policies relevant to the company’s operations? 

Sustainability leaders must choose whether to follow the market as it forms or help shape it by supporting projects that raise the bar. 

Article 6 is moving fast, and companies that act early will have a strategic edge. Now is the time to fully understand how different Article 6 credit types differ in origin, governance, and use cases. Once you’re clear on that, you should: 

• Set procurement criteria that are aligned with Article 6 (for example, proof of corresponding adjustment, certified verification, and registry tracking). 

• Monitor pilot projects and country-level agreements to assess emerging credit types, and whether they qualify as high-quality carbon credits and how they may be priced in the future. This will ensure your business will continue to be prepared for continuous changes in a high-standard, low-carbon economy. 

• Engage a trusted partner to help you navigate the highly complex rules and market dynamics and avoid early-market pitfalls when procuring Article 6 credits.