India and Japan have finalised the implementation framework for the Joint Crediting Mechanism (JCM), a bilateral carbon credit partnership aimed at accelerating climate action through investment and technology transfer under the Paris Agreement, officials said on Tuesday. The mechanism allows Japanese investment and technological support to fund projects in India that reduce or remove greenhouse gas emissions, while enabling both countries to share the resulting carbon credits toward their respective climate targets.

The arrangement is expected to strengthen cooperation in low-carbon development and support sustainable industrial and infrastructure projects. The Ministry of Environment, Forest and Climate Change said the “Rule of Implementation” for the JCM was formally adopted on June 8, 2026, under Article 6.2 of the United Nations Framework Convention on Climate Change (UNFCCC). The agreement operationalises the framework outlined in the Memorandum of Cooperation (MoC) signed between the two countries last year.

The MoC establishes a structured platform for collaboration on mitigation activities, focusing on projects that deliver measurable reductions or removals of greenhouse gas emissions. It also emphasises that such initiatives should align with sustainable development goals in India while contributing to the Nationally Determined Contributions (NDCs) of both India and Japan. Under the mechanism, Japanese firms and institutions are expected to play a key role in financing and deploying advanced technologies across sectors such as renewable energy, energy efficiency, clean transport, and industrial decarbonisation. Indian projects benefiting from the framework may include large-scale emission reduction initiatives that can generate tradable carbon credits.

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Officials noted that the partnership is designed not only to support climate commitments but also to facilitate broader technology transfer and capacity building in India’s green transition. By enabling shared crediting of emission reductions, the system is intended to create mutual incentives for scaling up sustainable projects. The formalisation of the implementation rules marks a significant step forward in operationalising carbon market cooperation between the two countries, reflecting growing international efforts to use market-based mechanisms to address climate change while promoting economic and technological collaboration.

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