The supervisory body governing Article 6.4 of the Paris Agreement is working on around 19 methodologies for generating carbon credits under the article's Paris Agreement Crediting Mechanism (Pacm) to be considered and adopted over the coming two years, delegates at the UN Cop 30 climate conference in Belem, Brazil, heard.
The body expects five or six Pacm methodologies to be adopted in the second quarter of 2026, while "13 plus" further submissions have been received by the group for consideration as new methodologies, said Perumal Arumugam of the UN's climate arm the UNFCCC.
The supervisory body approved Pacm's first methodology last month, relating to the flaring or use of landfill gas.
There are more than 1,500 projects eligible for transition from Pacm's predecessor the clean development mechanism, Arumugam said, of which only 14 have completed the transition process. And there have been over 100 transition approvals from different project host countries.
More than 1,000 prior notifications for new projects under Article 6.4 have been submitted by 106 countries, Arumugam said.
The first issuance of Pacm credits is expected by the end of the year or in the first quarter of next year, he added, echoing comments made by the co-chair of Article 6.4's methodological expert panel last month.
"It remains to be seen what the demand for A6.4ERs [Pacm credits] will be," the supervisory body's annual report on the mechanism published this week said. But the body "anticipates such demand […] to emerge", driven principally by the Carbon Offsetting and Reduction Scheme for International Aviation (Corsia) and the submission of new nationally determined contributions (NDCs) — climate plans — under the Paris deal.
"Significant" capacity building will be required to ensure adequate supply of credits, the report added.
The body warned in the report of a financing gap faced by the mechanism as a result of limited revenues ahead of the operationalisation of the market, with "significant upfront investment still required to develop essential infrastructure".
It urged the parties to the Paris agreement to "undertake proactive efforts to secure the additional essential resources needed to expedite the full operationalization of the Article 6.4 mechanism", including potentially allocating funding from other sources.
