India and Japan have taken a major step forward in climate cooperation by formally adopting the implementation rules for their Joint Crediting Mechanism (JCM), enabling the two countries to begin trading carbon credits under a bilateral framework aligned with the Paris Agreement.
The move transitions the initiative from a policy framework to an operational mechanism, allowing emission-reduction projects in India to receive investment from Japanese entities. Verified reductions in greenhouse gas emissions generated through these projects can be converted into carbon credits and shared between the two countries to help meet their respective climate commitments.
The implementation rules were adopted on June 8 under Article 6.2 of the Paris Agreement, which permits nations to cooperate through the transfer of internationally recognised emission reductions. India and Japan had previously signed a Memorandum of Cooperation on the mechanism in August 2025.
According to the Ministry of Environment, Forest and Climate Change, the framework establishes a joint committee comprising representatives from both governments, transparent procedures for project approval, independent validation and verification processes, sustainable development safeguards, and national registries to track carbon credit issuance and transfers.
Officials said the mechanism is expected to attract foreign investment, facilitate the deployment of advanced low-carbon technologies, strengthen technical expertise, and support projects that contribute to India’s climate goals and sustainable development agenda.
The ministry described the initiative as a reflection of India’s commitment to climate action, emphasizing that it will encourage technology transfer and capacity-building while accelerating the adoption of cleaner technologies across sectors. Existing India-Japan collaborative projects, including the Delhi Metro, could potentially benefit from the transfer of carbon credits under the new framework.
Meanwhile, a separate report released by climate think tank Zero Carbon Analytics highlighted concerns over Asia’s growing dependence on liquefied natural gas (LNG). The study found that US-produced LNG purchased and resold by Japan to several Asian countries, including India, generated substantial carbon emissions across its supply chain.
According to the analysis, LNG traded by Japan between 2020 and 2025 resulted in emissions comparable to those produced by approximately 17 coal-fired power plants operating for a year. The report warned that increasing reliance on LNG could prolong fossil fuel dependence, expose economies to volatile global energy prices, and complicate efforts to achieve long-term climate goals.
The launch of the India-Japan Joint Crediting Mechanism marks a significant milestone in international climate cooperation, offering a pathway for cleaner investments while supporting both countries’ commitments to reducing greenhouse gas emissions.
