Article 6 of the Paris Agreement establishes three approaches for Parties to voluntarily cooperate in achieving their emission reduction targets and adaptation aims set out in their national climate action plans under the Paris Agreement (Nationally Determined Contributions, or NDCs). One of these approaches is through the Article 6.4 Mechanism, a mechanism “to contribute to the mitigation of greenhouse gas emissions and support sustainable development” (Paris Agreement, Article 6, paragraph 4).

The Conference of the Parties serving as the meeting of the Parties to the Paris Agreement (CMA), at their third session in Glasgow, adopted  Decision 3/CMA.3 containing the rules, modalities and procedures for the mechanism established by Article 6, paragraph 4, of the Paris Agreement (“the mechanism”). Through this mechanism a company in one country can reduce emissions in that country and have those reductions credited so that it can sell them to another company in another country. That second company may use them for complying with its own emission reduction obligations or to help it meet net-zero.

The CMA also designated a 12-member body (Supervisory Body) to supervise the mechanism under the authority and guidance of the CMA and be fully accountable to the CMA.