India, Japan Sign Climate Cooperation Pact on Carbon Credit Mechanism

The Ministry of Environment, Forest and Climate Change (MoEFCC), Government of India, has signed a Memorandum of Cooperation (MoC) with the Government of Japan on the Joint Crediting Mechanism (JCM) under Article 6.2 of the Paris Agreement. The agreement represents a major step in Indo-Japan climate cooperation, reinforcing India’s commitment to global climate action and sustainable development.

The MoC was signed earlier this month and was highlighted by Prime Minister Shri Narendra Modi during his official visit to Japan, under the theme “Green Energy Focus for a Better Future.”

Building on a Strong Indo-Japan Partnership

India and Japan share a long history of collaboration in trade, technology, and culture. Climate change has now emerged as a critical pillar of this bilateral partnership, complementing ongoing cooperation in green energy, clean technology, and infrastructure.

The JCM agreement will accelerate efforts to reduce greenhouse gas (GHG) emissions, promote low-carbon technologies, and contribute to India’s long-term strategy to achieve Net Zero by 2070.

Joint Crediting Mechanism: How It Works

The Joint Crediting Mechanism (JCM) under Article 6.2 allows participating countries to cooperate on climate projects that deliver measurable emission reductions or removals. The carbon credits generated from such projects can then be:

• Used towards NDC (Nationally Determined Contribution) targets.

• Exchanged with partner countries, including Japan, under international carbon markets.

• Deployed to attract investments, technology transfer, and capacity-building support.

For India, the JCM provides an avenue to:

• Mobilize foreign investments in low-carbon technologies.

• Access advanced Japanese innovations in clean energy, waste management, and industrial efficiency.

• Strengthen the domestic ecosystem for localized green technologies, enabling large-scale adoption.

Enabling India’s Low-Carbon Development Strategy

Currently, India’s low-carbon strategy is cost-intensive and requires substantial viability gap funding. The MoC with Japan will help bridge this gap by encouraging:

• Technology assistance and transfer in sectors such as renewable energy, mobility, green hydrogen, and energy efficiency.

• Domestic manufacturing of clean technologies—including equipment, systems, and infrastructure—supporting the “Make in India” and Aatmanirbhar Bharat initiatives.

• Capacity building for Indian industries, research bodies, and state-level agencies to adopt advanced solutions.

By scaling such projects, India will not only move closer to its climate goals under the Paris Agreement but also boost its industrial competitiveness in the global green economy.

Safeguarding India’s Climate Commitments

The MoC also ensures that the international trading of carbon credits generated under JCM will not compromise India’s NDC commitments. Instead, it will enhance India’s flexibility in meeting targets, while opening new market opportunities for Indian businesses engaged in clean technologies.

The National Designated Agency for Implementation of Article 6 of Paris Agreement (NDAIAPA) will oversee approvals of JCM projects, ensuring environmental integrity and compliance with international best practices.

Expanding Global Climate Cooperation

The Union Cabinet has authorized the MoEFCC to:

• Finalize the Rules of Implementation (RoI) for Article 6.2.

• Sign similar agreements with other countries, in consultation with relevant ministries and the Ministry of External Affairs (MEA).

This positions India as an active player in international carbon markets, creating avenues for partnerships beyond Japan—potentially with Europe, Southeast Asia, and other climate-progressive economies.

Looking Ahead

The India–Japan MoC on JCM reflects a new era of climate diplomacy, combining international cooperation with domestic green growth. As India prepares for its energy transition and seeks to balance development with decarbonization, partnerships like these will play a pivotal role in achieving Viksit Bharat 2047.

With Japan’s technological strength and India’s growing green market, the collaboration sets a precedent for other bilateral climate agreements under the Paris Agreement’s Article 6 framework.