Carbon Markets and Article 6 Opportunities
International carbon markets are evolving with the operationalisation of Article 6 of the Paris Agreement. We analyse the emerging opportunities for project developers and sovereign participants.
The operationalisation of Article 6 of the Paris Agreement marks a significant milestone for international carbon markets. The framework enables countries to cooperate in achieving their nationally determined contributions (NDCs) through the transfer of mitigation outcomes, creating new pathways for carbon credit generation and trade.
Article 6.2 establishes a bilateral mechanism for the transfer of internationally transferred mitigation outcomes (ITMOs) between countries. Several early-mover nations, including Switzerland, Singapore, and Japan, have already signed bilateral agreements with host countries across Africa and Southeast Asia, setting precedents for deal structures and corresponding adjustments.
Article 6.4 creates a new centralised crediting mechanism overseen by the Supervisory Body, which will replace the Clean Development Mechanism (CDM). New methodologies are being developed for sectors including renewable energy, methane abatement, cookstoves, and nature-based solutions.
The voluntary carbon market (VCM) continues to operate alongside compliance markets, with standards such as Verra VCS and Gold Standard maintaining significant market share. However, integrity concerns and evolving regulatory expectations are driving demand for higher-quality credits with robust monitoring, reporting, and verification.
Thomas & Alexander Advisory supports project developers, governments, and investors in structuring carbon credit projects and navigating both compliance and voluntary market opportunities. Our expertise spans Article 6 advisory, carbon offtake structuring, and sovereign carbon strategy development.