- First ever issuance of credits under the Paris Agreement’s Article 6.4 mechanism, tied to a clean cooking project in Myanmar.
- Credited reductions are about 40% lower than under the former Clean Development Mechanism, reflecting tougher baselines and updated methodologies.
- Credits authorized for transfer to the Republic of Korea can be used in the Korean Emissions Trading System, directly linking UN markets to national compliance regimes.
A Market Design Moves Into Operation
The UN carbon market established under the Paris Agreement has approved its first issuance of credits, formally shifting the long-negotiated Article 6.4 mechanism from rulemaking into live operation.
The inaugural activity is a clean-cooking project in Myanmar that distributes efficient cookstoves designed to reduce household air pollution and curb deforestation. The issuance follows years of negotiations over environmental integrity, accounting rules and safeguards, areas that have defined the credibility debate around international carbon markets since the Kyoto era.
UN Climate Change Executive Secretary Simon Stiell said: “Over two billion people globally are without access to clean cooking, which kills millions every year. Clean cooking protects health, saves forests, cuts emissions and helps empowers women and girls, who are typically hardest hit by household air pollution. The first credits to be issued through the UN carbon market under the Paris Agreement come from a clean-cooking project, and they show how this mechanism can support solutions that make a big difference in people’s daily lives, as well as channeling finance to where it delivers real-life benefits on the ground. The opportunities presented by this UN carbon market across all regions are vast, particularly now that strong environmental safeguards, robust standards, and a clear system for redress are in place to ensure integrity, inclusiveness and efficiency.”
Integrity First: 40% Fewer Credits Than Under CDM
The project had previously received provisional issuance under the Kyoto Protocol’s Clean Development Mechanism. Under the new Paris Agreement Crediting Mechanism, however, updated values and more conservative calculations were applied.
Article 6.4 Supervisory Body Chair Mkhuthazi Steleki said: “This initial issuance reflects the careful application of the rules set by countries under the Paris Agreement. By applying updated values and more conservative calculations, the credited reductions are about 40 percent lower than what older systems would have issued. The result is consistent with environmental integrity requirements and ensures that each credited tonne genuinely represents a tonne reduced and contributes to the goals of the Paris Agreement.”
The roughly 40 percent reduction in credit volumes compared with CDM baselines is a defining feature of the new system. For investors and compliance buyers, this means fewer credits but higher confidence that each tonne reflects measurable, additional mitigation aligned with current science.
Article 6.4 Supervisory Body Vice Chair Jacqui Ruesga said: “Starting with a clean-cooking project is a fitting demonstration of where the demand and impact are what the Paris Agreement Crediting Mechanism can do: support activities that bring clear co-benefits for people, such as better indoor air quality, while reducing emissions. Last year we requested the use of an updated methodological approach, which means the credits issued are aligned with the best available information and a careful calculation of the reductions achieved. Our focus is on building confidence in this market from the outset, and this first issuance shows that the system is working as intended.”
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Direct Links to National Climate Targets
The project is coordinated with authorized participants from the Republic of Korea. Credits authorized for use in Korea can be transferred to Korean entities for compliance under the Korean Emissions Trading System, contributing to the country’s Nationally Determined Contribution. The remaining credits will count toward Myanmar’s own NDC.
This dual accounting pathway illustrates how Article 6 is intended to function: enabling cross border mitigation finance while preserving national climate targets through corresponding adjustments. For governments, it offers flexibility. For corporates operating under compliance markets, it creates a new supply channel with multilateral oversight.
Pipeline and Private Sector Demand
The first issuance also responds to private-sector demand for a UN governed market that has moved beyond architecture and into issuance. More than 165 host-Party-approved projects are in transition from the CDM to the new mechanism, spanning waste management, energy, industry and agriculture.
Approval remains subject to a 14-day appeal period during which participants, host countries and directly affected stakeholders may submit appeals.
For C-suite leaders and institutional investors, the implications are material. The market is smaller per project than its predecessor, but potentially more resilient. Governance architecture now includes updated methodologies, clearer authorization processes and a defined redress system.
As Article 6.4 scales, the test will be whether integrity can be maintained while supply expands across regions and sectors. The first issuance suggests the UN system is prioritizing quality over volume. In a carbon market landscape marked by scrutiny and volatility, that choice may determine whether Paris aligned credits become a core compliance and financing instrument or remain a niche mechanism.
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