COP29, which took place in November 2024 in Baku, Azerbaijan, saw the adoption of Article 6 as well as endorsement of standards for removals and methodology. The Article 6.4 Supervisory Body (SBM), supported by its Methodological Expert Panel (MEP), has been developing the technical rules, standards, and procedures that will determine which project types qualify under the Paris Agreement Crediting Mechanism (PACM) ever since. The August 2025 SBM meeting advanced key discussions in this regard: how to treat projects whose credited greenhouse gas reductions are at risk of being reversed (such as forests that burn or get cut down after being credited for being carbon sinks). The meeting laid the groundwork adoption of a“non-permanence standard” expected this month.

This analysis explains ongoing developments of the PACM since Baku: stakeholders involved in mitigation projects have been transitioning their credit-generating activities from the Kyoto Protocol’s Clean Development Mechanism (CDM), further standards have been adopted and more are under development, and newly proposed methodologies are under review, including some revised CDM approaches.

India and China dominate transitioning projects

The transition of CDM activities to the Article 6.4 mechanism is guided by the standard A6.4-STAN-AC-001, which sets out the rules, eligibility conditions, and design requirements for turning CDM projects that generate Certified Emission Reductions (CERs) into PACM projects that generate Article 6.4 ERs – see Textbox 1 and Figure 1.

Volume-wise, most of the projects seeking to undergo such a transition are located in China and India (see Figure 2), followed by Brazil, Viet Nam and Chile. They are primarily projects involving wind power, hydroelectricity, and energy efficiency in households. The methodologies ACM0002 and AMS-ID (both for renewable electricity) underpin the majority of these activities, as they include wind, hydro, and solar generation projects. So far, 14 projects have transitioned. Most of the credits those transitioned projects generate come from projects in Bangladesh.

In order to host projects that can generate credits under the PACM, parties must formally register their Designated National Authority or DNA. 116 Designated National Authorities (DNAs) have been identified so far, with only few countries, namely South Africa, Mozambique, and Iran, yet to complete this step. Meanwhile, validation of new Article 6.4 activities has not yet begun, as the SBM has yet to formally approve any methodologies.

Setting standards

Since COP29, the SBM has adopted nine standards, pertaining to the PACM. These either lay methodological foundations (on issues such as baseline-setting, leakage, and additionality) or define operational elements (such as CDM transition, validation, and verification.  

Examples of the former include the Standard on Setting the Baseline, which provides rules for determining emission reference levels. The Standard on Demonstration of Additionality ensures projects prove their reductions go beyond business-as-usual. The Standard on Addressing Leakage helps identify and minimise indirect emissions, and the Standard on Addressing Suppressed Demand allows fair accounting for projects improving access to basic services in low-income communities.

Examples of the latter type of standard include one on Transition of CDM Activities, which creates a pathway for legacy CDM projects to continue generating credits under Article 6.4. This involves adding safeguards for afforestation, reforestation, and leakage. The Activity Standards for Projects and Programmes of Activities (PoAs) set consistent requirements for project design, monitoring, and reporting, while the Validation and Verification Standards strengthen quality assurance and align verification processes with sustainable development and methodological updates.

Work related to removals is still ongoing, with an advanced draft standard under review and expected adoption by late 2025, on top of the agenda at the current SBM018 meeting. This forthcoming Standard on Addressing Non-Permanence and Reversals will define procedures for projects whose climate change mitigation is at risk of being reversed, such as cut/burned forests or leaks from carbon capture and storage sites. The draft standard addresses post-crediting period monitoring, reversal risk assessment, remediation actions, and compensation mechanisms for both avoidable and unavoidable reversals. The final version will also address how to manage late or missing monitoring reports and establish treatment for activities where removals fall below baseline levels.

First methodology by the end of the year

The methodologies that are currently being considered by the MEP are those most frequently used by projects transitioning from the CDM, namely ACM0002 (grid-connected renewable electricity generation), AMS-I.D. (renewable electricity for small users), AMS-I.C. (thermal energy production), ACM0001 (landfill gas use or flaring), AMS-II.G. (energy efficiency in thermal applications of non-renewable biomass), and AMS-I.E. (switch from non-renewable biomass for thermal applications). CDM projects are permitted to continue applying these methodologies only until the end of 2025, after which they must shift to methodologies formally approved under PACM. At the same time, a set of new methodologies for emission reduction activities has been submitted for consideration, including CLEAR Methodology for Cooking Energy Transitions, supporting clean cooking initiatives (A6.4-PNM001); Pumped Hydro Storage and Electricity Supply to the Grid (A6.4-PNM002); N₂O Abatement from Nitric Acid Production (A6.4-PNM003); and Ammonia Production via Electrolysis and Hydrogen-Nitrogen Synthesis (A6.4-PNM004). The Supervisory Body is expected to approve the first Article 6.4 methodology this year, likely from the waste sector (ACM0001). 

One month to COP30

Stakeholder consultations have raised significant concerns about the draft Non-Permanence and Reversals Standard, which many view as too rigid, costly, and incomplete, particularly on post-crediting monitoring, accounting treatment, and project feasibility. Stakeholders are calling for clearer exit options, refined risk thresholds, and alignment with the forthcoming Reversal Risk Tool. The proposed 0.5–2.5% negligible-risk threshold and open-ended post-crediting liability are seen as impractical for most nature-based projects, potentially discouraging participation. The ongoing Supervisory Body meeting (SBM018), the last one before COP, concludes today (Friday, 10 October), with decisions expected on the Common Practice Analysis Tool and the reversal standards. The Methodological Expert Panel will then meet for the final time before COP30, on 13–14 October, to refine the draft and address these concerns. We will publish a follow-up analysis in the coming week on the outcome of SBM018, with a focus on the Non-Permanence and Reversals standard.