A new joint venture has launched to help countries enhance carbon mitigation efforts under Article 6 of the Paris Agreement. This partnership includes various technology and sustainability firms. They aim to build digital systems and tools for a carbon mitigation pipeline worth over US$100 billion. This funding focuses on forest and nature-based internationally transferred mitigation outcomes (ITMOs). Article 6 outlines rules for global cooperation on climate action through carbon markets.
The collaboration will help governments track emissions cuts. It will also verify climate actions and share mitigation results clearly. It will also develop digital infrastructure to promote high-integrity carbon credits and environmental assets across regions like Africa, South America, the Middle East, and Asia.
What the Joint Venture Will Do
The joint venture includes three partners with distinct expertise:
- Aleria: A specialist in artificial intelligence (AI) and data.
- Tawasal: A UAE-based super app platform.
- Xange.com: An environmental intelligence software provider.
They will work together to build digital systems for carbon accounting and ITMO transfers. This will help governments and project developers. Their tools include monitoring, reporting, and verification (dMRV) systems to capture verified mitigation data. They will also introduce a global infrastructure solution called GEMIS for policy-aligned project management.
A central registry and settlement platform will enable countries to track and transfer mitigation outcomes. This system will help governments manage carbon mitigation results from international trade. It follows the rules of Article 6 and will have a financial custodian bank in Chicago to host and oversee the settlement system.
The joint venture will connect its systems to millions of users through Tawasal’s platform. This includes payment systems from partners like Gnosis and Noxxo. They support transactions across different regions.
Eric Leandri, CEO of Aleria and Tawasal remarked during the Davos announcement:
“Article 6 requires governments to operate credible registries, data systems, and settlement processes under national authority. This joint venture focuses on delivering the technical infrastructure needed to support compliant accounting, monitoring, and transfer of mitigation outcomes. By combining Aleria’s sovereign data capabilities, Tawasal’s digital platform, and Xange.com’s market infrastructure, we are enabling countries to implement Article 6 mechanisms in line with Paris Agreement requirements.”
Why Article 6 Needs Strong Digital Infrastructure
Article 6 of the Paris Agreement provides a framework for countries to work together on emissions reductions. It has three main parts:
- Article 6.2: Rules for accounting and trading of ITMOs.
- Article 6.4: A new mechanism for high-quality carbon credits and emissions reductions.
- Article 6.8: Non-market methods for climate action without trading emissions units.
Article 6 allows countries and companies to collaborate by transferring emissions reductions across borders. These transfers count toward climate targets known as Nationally Determined Contributions (NDCs). A strong digital tracking system is essential to prevent errors like double-counting.
International carbon market cooperation under Article 6 is growing. For instance, Singapore signed an agreement with Papua New Guinea in 2023. This deal enables the two countries to generate and trade carbon credits toward their climate targets.
African nations, like Rwanda, are also preparing to engage with Article 6 mechanisms and carbon markets. They are developing national frameworks and enhancing institutional capacity.
Countries like Indonesia and Norway are participating in Article 6 cooperation as well. At COP30, they talked about carbon trading deals. These could involve up to 90 million tonnes of CO₂ reductions. So far, 12.5 million tonnes are already committed.
These developments highlight the need for strong registry systems and verification infrastructure for effective international climate cooperation.
- SEE MORE: Billions at Stake: UN Panel’s Article 6.4 Recommendation Could Transform Global Carbon Trading
Digital MRV and Registries: The Market’s Missing Link
Successful carbon markets depend on accurate data and transparent tracking. The joint venture’s digital tools will help countries meet Article 6 requirements for emissions accounting. Key components include:
- dMRV tools: Capture verified emissions data and spot environmental risks.
- ITMO registry: A platform for recording, authorizing, and transferring mitigation outcomes.
- Settlement systems: Secure systems for transferring and ensuring transparency.
These tools are crucial because accurate tracking of mitigation outcomes is a requirement under Article 6. Countries must show that carbon credits or ITMOs represent real reductions. Without reliable systems, countries can’t trust transfers to meet climate goals.
This project helps build the Article 6 registry infrastructure by the United Nations Framework Convention on Climate Change (UNFCCC). In 2026, the UN started building systems to track mitigation outcomes. This includes international registries that help national systems work together to enhance transparency and confidence in carbon markets.
Global Momentum Behind Article 6 Cooperation
The JV has identified a pipeline of over US$100 billion in forest and nature-based outcomes aligned with the Paris Agreement. This figure reflects the projected value of various mitigation activities eligible for Article 6 cooperation.
Article 6 cooperation could unlock both private and public funding for climate mitigation. For example, Singapore started a public tender for at least 0.5 million metric tons of high-quality, nature-based carbon credits under Article 6. This is part of Singapore’s plan to reduce emissions to about 60 million metric tons of CO₂ equivalent by 2030. It estimates needing around 2.51 million metric tons of ITMOs annually from 2021 to 2030 to meet its targets.
Countries are also establishing bilateral and multilateral cooperation on Article 6. For instance, Zambia signed a cooperation agreement with Switzerland at COP30 in 2025 to set up frameworks for trading carbon credits. This deal aims to support climate mitigation projects and financing in Zambia.
Market analysts note that over 120 countries are willing to use Article 6 instruments for their NDCs. These countries recognize that cooperation can lower costs by allowing more effective climate action. Capacity-building programs under the UN Environment Programme aim to help developing countries engage in international carbon markets.
Integrity, Regulation, Risks, and Market Outlook
While interest in Article 6 markets is strong, challenges remain. Some project developers have raised concerns about retroactive changes to market rules. Standards bodies, like the Gold Standard, suggest new alignment requirements for Paris compliance. Developers warn that applying these rules retroactively could create uncertainty for existing projects. Stable rules are crucial for long-term investment in mitigation.
Another challenge is ensuring the integrity of mitigation outcomes. Countries and buyers need assurance that carbon credits or ITMOs reflect real emissions reductions. Article 6 systems aim to minimize risks like overestimation, but more work is needed as markets evolve.
Despite these challenges, the market outlook for Article 6 cooperation is substantial. Projections from the University of Maryland and IETA estimate over $100 billion in annual trading by 2030. This matches wider industry forecasts. The CAREC Program sees Article 6 boosting the carbon market to $250 billion.
Also, Oxford Energy Studies expects annual demand to exceed 700 MtCO₂e. This demand is driven by NDC gaps and the growth of bilateral ITMO.
What This JV Signals for Future Carbon Markets
The new joint venture aims to support a US$100 billion carbon mitigation pipeline under Article 6 of the Paris Agreement. It will help countries create digital systems for tracking, reporting, and transferring ITMOs.
Creating registries, using digital monitoring, and ensuring secure settlement systems are key to building trust in carbon markets. Governments and markets are already building capacity. An increase in bilateral agreements and registry infrastructure indicates stronger adoption ahead.
The joint venture’s pipeline estimate signals significant investment potential in forestry and nature-based mitigation. While challenges exist, the emerging Article 6 ecosystem aims to unlock funding that helps countries meet climate goals with integrity and transparency.
The post $100B at Stake: New Joint Venture Builds Digital Backbone for Article 6 Carbon Markets appeared first on Carbon Credits.
Most businesses that decide to act on their net-zero targets reach the same point of friction. Buying carbon credits has meant tracking down brokers, sitting through sales calls, and requesting a quote just to learn a price, sometimes with limited proof of what you are buying.
The earnings calls that quietly reframed climate from sustainability question to operating risk.
Three earnings calls in the last 18 months tell the story without any help from a press release.
Hershey, May 2024: cocoa price exposure compresses margin, and the company attributes part of the cost shock to West African weather. Olam, July 2024: coffee climate exposure quantified in the annual report. JBS, January 2025: supply chain climate disclosures expanded materially in response to investor pressure and regulatory expectation. None of these companies issued the announcement as climate news. They issued it as financial news. The climate-linked supply chain risk did not arrive with a sustainability framing; it arrived as a P&L line.
You are probably reading this article because you suspect the same thing is happening to your business. This piece walks through what is showing up on which earnings calls, how procurement and finance leaders are quantifying the exposure, and what serious corporates are doing about it before the regulator asks.
Where climate risk has already appeared in earnings
The pattern is consistent across resource-intensive sectors. A weather event compresses supply, the price spikes, the cost flows through the income statement, and the analyst on the call asks whether the event is anomalous or structural. Increasingly, the honest answer is the second one.
Cocoa is the cleanest example. The 2023 to 2024 West African harvest fell sharply on the back of erratic rainfall and disease. Cocoa futures more than tripled. Companies with concentrated West African sourcing absorbed the cost; companies with diversified sourcing absorbed less. The exposure was not climate as ESG topic. It was climate as cost of goods.
Coffee follows the same pattern. Brazilian and Vietnamese harvests have moved on weather more sharply across the last several seasons. Roasters with long-tenor supplier relationships and origin diversification have managed the volatility; roasters with spot-market exposure have not. Wheat, sugar, palm oil, beef: the same dynamic in different commodities, a pattern the IPCC AR6 Working Group II report projects will intensify across agricultural systems through mid-century.
What this means: climate risk is no longer a footnote in the 10-K. It is a line item the CFO has to explain on the call.
The three commodity exposures that hit margin first
For most companies with material Scope 3 exposure, three exposures dominate the near-term P&L risk.
- Concentrated single-origin sourcing in a climate-vulnerable region. If your tier-one supply for any material commodity sits in one geography, you have a concentration risk that climate amplifies. Diversification across origins is the obvious hedge, but it takes years to build and requires relationships you cannot acquire by tender.
- Supplier financial fragility under climate stress. Smallholder farmers, who supply a large share of the global cocoa, coffee, and palm oil market, do not carry the balance sheets to absorb yield shocks. When yields collapse, they exit. When they exit, your supply base shrinks, and the surviving suppliers raise prices. The risk is structural, not cyclical.
- Logistics and storage exposure to extreme weather. Hurricane disruptions to Gulf shipping, drought-driven Panama Canal restrictions, flooding in European inland waterways: each of these has moved input costs in the last three years, a pattern documented in Munich Re’s natural catastrophe data. The exposure shows up as a one-quarter event in the financial press but accumulates over time on the cost line.
TCFD and ISSB disclosure changes
The disclosure architecture has now caught up with the risk. The Task Force on Climate-related Financial Disclosures, whose recommendations are now embedded in the ISSB’s IFRS S2 climate standard, requires companies to disclose climate-related risks across physical and transition categories, with quantification where possible.
For physical risk specifically (the climate-linked supply chain risk you are reading about), the disclosure must address both acute exposures (extreme weather events) and chronic exposures (gradual changes in temperature, precipitation, and growing seasons). The disclosure must address the time horizon over which the risk is material, the parts of the value chain exposed, and the financial impact under different scenarios.
The CSRD imposes similar requirements under European law, with double materiality (both financial and impact materiality) embedded in the assessment. The practical effect: your auditors and your investor relations team now need a defensible answer to the climate-linked supply chain risk question, and the answer needs to be quantified.
What procurement and finance can do now
Three actions matter near-term.
Map your exposure. Most companies do not have a clear view of which tier-one and tier-two suppliers sit in which climate-vulnerable geographies. Without the map, you cannot quantify the risk, and without the quantification, you cannot disclose it credibly. The map is the foundation, and World Resources Institute climate risk research provides useful public tooling to start.
Diversify and deepen, in that order. Diversification across origins reduces concentration risk, but the deeper move is to invest in the resilience of the suppliers you already have. Regenerative practices, agroforestry, soil health interventions: these reduce yield volatility under climate stress and protect your input cost trajectory.
Embed the climate spend inside procurement, not outside it. Treating climate risk as a sustainability cost line subordinates it to the ESG budget. Treating it as a procurement and resilience investment puts it in the budget that matters, which is the cost-of-goods budget that the CFO defends quarterly.
Nature-based supply chain investments are the asset class designed for exactly this purpose. They sit inside the value chain, they reduce climate-linked supply risk, they generate verifiable Scope 3 reductions, and they produce the documentation an auditor and a regulator can both test.
If you are quantifying climate-linked supply chain risk in advance of the next earnings cycle or the next disclosure period, the carbon and sustainability experts at Carbon Credit Capital can help you map your exposure and structure a Dual-Value Model response that addresses reduction, resilience, and disclosure-readiness in a single program. Schedule a consultation.
More and more small and medium-sized businesses are hearing the same question from their larger customers: What is your carbon footprint? That question now travels down entire supply chains, and it arrives next to tender requirements, certification criteria, and rising customer expectations.
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