India and Japan Launch Operational Manual for the Joint Crediting Mechanism

Environment & Climate Change · 6 October 2026 · Based on PIB (original report)

2-minute summary

In October 2026, India and Japan launched the operational manual for the Joint Crediting Mechanism (JCM), establishing a structured framework for bilateral carbon market cooperation. Coordinated by India's Ministry of Environment, Forest and Climate Change (MoEFCC), the JCM facilitates the transfer of advanced, low-carbon technologies from Japan to India. The greenhouse gas emission reductions achieved through these projects are quantified as carbon credits, which are then shared between the two nations. This cooperation operates under Article 6.2 of the Paris Agreement, which governs cooperative approaches and bilateral market mechanisms. The newly released operational manual provides clear guidelines for project selection, validation, monitoring, and credit issuance. This initiative not only strengthens the India-Japan strategic partnership but also assists India in meeting its Nationally Determined Contributions (NDCs) while accelerating its transition to a low-carbon economy.

Why it's in the news

India and Japan have officially launched the operational manual for the Joint Crediting Mechanism (JCM) on October 6, 2026. This manual operationalizes their bilateral carbon market cooperation under Article 6.2 of the Paris Agreement.

Facts to remember

• The Joint Crediting Mechanism (JCM) is a bilateral carbon pricing system initiated by Japan to facilitate the diffusion of low-carbon technologies globally.
• Bilateral carbon market cooperation under the JCM is governed by Article 6.2 of the Paris Agreement.
• The Ministry of Environment, Forest and Climate Change (MoEFCC) is the nodal ministry for implementing the JCM in India.
• India's updated Nationally Determined Contribution (NDC) targets a 45% reduction in the emission intensity of its GDP by 2030 compared to 2005 levels.

Background and context

The Joint Crediting Mechanism (JCM) was first proposed by Japan in 2011 as a bilateral mechanism to complement the Clean Development Mechanism (CDM) of the Kyoto Protocol. Under the Paris Agreement, the JCM has been adapted to align with Article 6.2, which allows countries to use cooperative approaches involving internationally transferred mitigation outcomes (ITMOs) to meet their Nationally Determined Contributions (NDCs). India and Japan signed a Memorandum of Cooperation on the JCM in late 2022. The launch of the operational manual in October 2026 marks the transition from conceptual agreement to active project implementation. This mechanism allows Japanese entities to invest in high-efficiency, low-carbon technologies in India. The emission reductions achieved are verified and shared as carbon credits between the two nations, preventing double counting through robust accounting registries. This cooperation is vital for India to access advanced technologies in hard-to-abate sectors like steel, cement, and energy storage.

Constitutional provisions

• Article 48A — Directs the State to protect and improve the environment and safeguard forests and wildlife.
• Article 51(c) — Fosters respect for international law and treaty obligations in the dealings of organized peoples with one another.

Committees and reports

• IPCC Sixth Assessment Report (AR6) — Emphasizes the critical role of rapid decarbonization and international cooperation in limiting global warming to 1.5°C.

Government schemes

• Carbon Credit Trading Scheme (CCTS) — India's domestic carbon market framework established under the Energy Conservation (Amendment) Act, 2022, which runs parallel to international bilateral mechanisms like the JCM.

International organisations

• United Nations Framework Convention on Climate Change (UNFCCC) — The overarching international treaty under which the Paris Agreement and its Article 6 carbon market mechanisms are governed.

Previous UPSC questions on this theme

• Prelims GS-1 2025 — Consider the following statements : Statement I : Article 6 of the Paris Agreement on climate change is frequently discussed in global discussions on sustainable development and climate change. Statement II : Article 6 of the Paris Agreement on climate change sets out the principles of carbon markets. Statement III : Article 6 of the Paris Agreement on climate change intends to promote inter-country non-market strategies to reach their climate targets. Which one of the following is correct in respect of the above statements? (a) Both Statement II and Statement III are correct and both of them explain Statement I (b) Both Statement II and Statement III are correct but only one of them explains Statement I (c) Only one of the Statements II and III is correct and that explains Statement I (d) Neither Statement II nor Statement III is correct

Mains practice: Explain the mechanism of the Joint Crediting Mechanism (JCM) and evaluate its significance in helping India achieve its Nationally Determined Contributions (NDCs) under the Paris Agreement.

The launch of the operational manual for the Joint Crediting Mechanism (JCM) by India and Japan in October 2026 marks a milestone in bilateral climate cooperation. Operating under Article 6.2 of the Paris Agreement, the JCM is a cooperative framework designed to facilitate the transfer of advanced decarbonization technologies and generate high-integrity carbon credits.

**Mechanism of the JCM**

The JCM operates through a structured bilateral process:

• **Technology Transfer:** Japanese entities invest in and deploy advanced low-carbon technologies (e.g., green hydrogen, high-efficiency industrial boilers) in India.

• **Credit Generation and Sharing:** The greenhouse gas (GHG) emission reductions achieved by these projects are quantitatively verified.

• **Avoidance of Double Counting:** These verified reductions are converted into carbon credits and shared between India and Japan, using robust registry systems to prevent double counting as mandated by Article 6.2.

**Significance for India's NDCs**

• **Capital and Technology Infusion:** It helps India access clean technologies in hard-to-abate sectors, supporting its NDC target of reducing emission intensity of GDP by 45% by 2030 (from 2005 levels).

• **Financial Mobilization:** It attracts private Japanese climate finance, reducing the burden on India's public exchequer.

• **Complementing Domestic Carbon Markets:** It runs parallel to India's Carbon Credit Trading Scheme (CCTS) under the Energy Conservation (Amendment) Act, 2022, setting high standards for Measurement, Reporting, and Verification (MRV).

**Way Forward**

• **Sectoral Targeting:** Direct JCM investments toward hard-to-abate sectors like steel and cement.

• **Capacity Building:** Train domestic industries on JCM project design and MRV protocols.

• **Regulatory Alignment:** Ensure seamless accounting integration between JCM credits and the domestic CCTS registry to maintain environmental integrity.

In conclusion, by aligning technology transfer with robust carbon accounting, the JCM serves as a practical model for international climate cooperation, helping India achieve its SDG 13 (Climate Action) goals while driving sustainable industrial growth.

Prelims practice questions

Q1. Consider the following statements regarding the Joint Crediting Mechanism (JCM): 1. It is a bilateral carbon market cooperation framework initiated by Japan. 2. The credits generated under JCM are governed under Article 6.4 of the Paris Agreement. 3. In India, the Ministry of Environment, Forest and Climate Change is the nodal agency for its implementation. How many of the above statements are correct?

1. Only one
2. Only two
3. All three
4. None

Answer: B. Statement 1 is correct as JCM is a bilateral mechanism initiated by Japan. Statement 2 is incorrect because JCM operates under Article 6.2 (cooperative approaches/bilateral agreements) of the Paris Agreement, not Article 6.4 (which is the centralized multilateral mechanism). Statement 3 is correct as MoEFCC is the nodal ministry in India.

Q2. With reference to Article 6 of the Paris Agreement, consider the following statements: 1. Article 6.2 provides an accounting framework for bilateral or voluntary cooperative approaches between countries. 2. Internationally Transferred Mitigation Outcomes (ITMOs) are the carbon credits traded under Article 6.2. 3. Article 6.8 focuses on market-based mechanisms to assist countries in implementing their NDCs. Which of the statements given above is/are correct?

1. 1 and 2 only
2. 2 and 3 only
3. 1 and 3 only
4. 1, 2 and 3

Answer: A. Statement 1 is correct; Article 6.2 allows bilateral agreements and cooperative approaches. Statement 2 is correct; ITMOs are the units used under Article 6.2. Statement 3 is incorrect because Article 6.8 specifically deals with non-market approaches, not market-based mechanisms.

Q3. Which of the following best describes the primary objective of the Joint Crediting Mechanism (JCM) operationalized by India and Japan?

1. To coordinate disaster management protocols for coastal regions in Asia.
2. To establish a joint maritime security framework in the Indo-Pacific region.
3. To facilitate bilateral carbon market cooperation through clean technology transfer.
4. To regulate bilateral trade tariffs on electronic goods and semiconductors.

Answer: C. The JCM is a bilateral carbon market cooperation mechanism designed to facilitate the diffusion of low-carbon technologies and generate carbon credits to meet NDC targets under the Paris Agreement.

Revision flashcards

• Under which article of the Paris Agreement do bilateral carbon trading frameworks like the Joint Crediting Mechanism (JCM) operate? Article 6.2. This article allows countries to use bilateral cooperative approaches involving internationally transferred mitigation outcomes (ITMOs) to meet their Nationally Determined Contributions (NDCs).
• Which Indian ministry is the nodal agency for implementing the Joint Crediting Mechanism (JCM) with Japan? The Ministry of Environment, Forest and Climate Change (MoEFCC).
• In October 2026, which two countries launched the operational manual for their bilateral Joint Crediting Mechanism (JCM)? India and Japan. The manual establishes the rules for project implementation and carbon credit sharing.
• What is the target year set by India to achieve net-zero carbon emissions, as declared at COP26? 2070. Bilateral mechanisms like the JCM launched in October 2026 are designed to help accelerate this transition.
• Why is the 'corresponding adjustment' mechanism crucial under Article 6.2 of the Paris Agreement? It prevents double counting. When one country transfers carbon credits to another, it must adjust its emissions registry so the same reduction is not claimed by both nations.