Under the Article 6.2 framework of the Paris Agreement, India and Japan have formalized the Rules of Implementation for the Joint Crediting Mechanism (JCM). The deal grants Japanese entities carbon credits in exchange for deploying capital and clean technologies to decarbonize heavy-emitting industries across India.
Accelerating industrial decarbonization:
The bilateral carbon credit program prioritizes investments in high-growth green sectors, including green hydrogen, solar thermal energy, sustainable aviation fuel (SAF), and utility-scale energy storage systems.
In return, verified greenhouse gas emission reductions are divided between both nations to fulfil their respective nationally determined contributions (NDCs).
The joint committee governing the mechanism oversees third-party validation and national registries to maintain accounting standards and prevent double-counting.
Building on a history of strategic cooperation:
The carbon crediting framework builds on a foundation of bilateral energy initiatives between the two countries.
India and Japan established the India-Japan Energy Dialogue in 2007 to institutionalize cooperation on grid stability, energy efficiency, and thermal efficiency. This mandate expanded under the India-Japan Clean Energy Partnership (CEP), focusing on electric vehicles, battery storage, and clean hydrogen infrastructure. The JCM converts those strategic goals into a market-based structure where projects earn tradeable mitigation outcomes.
The Joint Crediting Mechanism provides a commercial path for India to scale clean energy deployment while advancing toward its net-zero 2070 goal. For Japan, it offers a reliable supply of verified carbon credits to support its 2050 climate neutrality commitment.
