Policy watch
Article 6 has moved from policy to practice
August 2026 · AGCF Team
For nearly a decade after the Paris Agreement was signed, Article 6 was largely theoretical: the text existed, but the rules did not. That era is over. The architecture is now essentially settled, the first official credit transfers between governments have taken place, and in March 2026 the first credit was issued under the Paris Agreement Crediting Mechanism (PACM) — the new UN system established under Article 6.4 to succeed the Clean Development Mechanism.
Corresponding adjustments are the new gatekeeper
Since COP29 finalised the rulebook, the single most important determinant of a credit’s usability and value in compliance markets has become the corresponding adjustment — the accounting entry by which a host country renounces its own claim to an exported emission reduction, preventing the same tonne from being counted twice.
The practical consequence is a two-tier market. Credits authorised by their host country, carrying a letter of authorisation and a corresponding adjustment, are usable for international compliance — by governments toward their NDCs, and by airlines under CORSIA — and command a structural premium. Non-authorised credits remain usable for voluntary corporate claims, but trade at a discount. Market observers note the gap between the two tiers has become one of the defining price signals in the market.
Supply is the bottleneck, not demand
Host-country authorisation is deliberate, sovereign and slow: each government must weigh which reductions it can afford to export against its own climate targets. Authorisations continue to lag project approvals across most regions, and the transition of legacy CDM projects into the new mechanism has been slower still. Demand anchored in regulation is arriving faster than authorised supply can be built.
Our perspective
For AGCF, this asymmetry is the opportunity. Projects designed from inception for Article 6 eligibility — with host-country engagement, robust verification and contracted sovereign or corporate offtake — sit on the scarce side of a structurally short market. That is precisely where our pipeline is built to operate.