China and India have declined to back any of their old United Nations carbon credit projects seeking to sell offsets under the new UN market, driving a cull of nearly three-quarters of applicants, analysis of official data shows.
Only 415 out of more than 1,500 projects and programmes hoping to move from the Clean Development Mechanism (CDM) to the new carbon market set up under Article 6.4 of the Paris Agreement won the approval of their host governments by the 30 June deadline – a crucial step in transitioning them.
The two Asian giants, home to two-thirds of all applicants, account for the bulk of the exclusions. Brazil, the other heavyweight of the CDM era, took the opposite path, approving nearly all of its projects in a last-minute rush that leaves it with the largest number of activities still in the running to sell credits under the new mechanism.
Carbon market watchers have long regarded the CDM, set up under the Kyoto Protocol which has now been largely replaced by the Paris Agreement, as largely discredited for failing to drive real emission cuts. They also warned that letting its projects live on could dent confidence in the mechanism’s successor.
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If all projects seeking transition had been successful, they could have flooded the market with up to more than 900 million credits generated with largely outdated rules, according to UN estimates. One credit is equivalent to one tonne of carbon dioxide (CO2) and 900 million tonnes is similar to Japan’s annual emissions.
‘New era’
Injy Johnstone, senior research fellow at the Munich-based Max Planck Institute, said the failure of most projects to clear the hurdle sent a significant signal that carbon trading had entered a new era. “The system is trying to remove some of the hot air that had inflated it in the past,” she told Climate Home News.
“The lack of transition is the biggest contribution that Article 6 has made to climate yet,” she added, arguing that leaving “zombie credits” in the market creates confusion, especially for buyers that might not realise these units have lost their value.
Among the schemes that failed to win government approval are nine programmes promoted by fossil fuel companies over a decade ago to subsidise the construction of gas plants in the Global South, which Climate Home News has previously reported on.
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But one of them, supporting the Ressano Garcia gas plant in Mozambique, could still profit from the new market after the country’s government granted its approval on deadline day itself.
Brazil leads projects transition
Established in 1997 under the Kyoto Protocol, the CDM allowed rich countries to meet part of their climate obligations by financing emission-cutting projects in poorer ones. It drew widespread criticism over its patchy human rights record and for failing to deliver promised climate benefits. Backers of the Article 6.4 market say it is a higher-integrity successor.
CDM projects were given a route back into the new mechanism under certain conditions at COP26 in Glasgow in November 2021, when governments agreed the rules for the Paris Agreement market.
Project developers had until the end of 2023 to apply and host governments were originally given until the end of 2025 to grant approval. But, after requests from many developing countries for an extension, at COP30 in Belém countries agreed to push the deadline back six months to the end of June.
Brazil was the single largest beneficiary of the decision, with all of its 92 approvals coming during the extension window. Hydropower plants, landfill gas schemes and wind farms make up the bulk of the South American country’s surviving portfolio, and hydro is the single most common project type in the global transition pipeline.
Peru greenlit the move of nearly a dozen hydropower plants, Thailand backed a batch of biogas and waste-to-energy schemes, and Mexico squeezed all of its approvals – including a controversial industrial gas project – into the final week. African nations including Zambia, Malawi and Ethiopia backed programmes aiming to switch households to cleaner cooking stoves, which have the potential to generate millions of offsets and are set to be the biggest source of credits among the surviving projects.
Long way from selling credits
Securing government support does not mean a scheme can now automatically sell credits under the Article 6 mechanism. Developers are required to submit additional documentation by the end of 2026 demonstrating that their programmes respect the mechanism’s stricter rules on environmental and social safeguards and on the risk of emission cuts being reversed. The Article 6.4 Supervisory Body, the mechanism’s regulator, has the final say on which projects are allowed into the market.
Those that make it through can sell credits for emission reductions achieved between 2021 and 2025 under the old CDM methodologies, with some adjustments aimed at preventing the creation of excess credits not backed by real emission cuts. For reductions achieved from 2026 onwards, projects will need to switch to new methodologies, which the regulator is currently developing.
So far, 30 programmes have completed the process, and only two cookstove projects in Myanmar have been formally approved to issue credits.
Civil society groups have called for an investigation into the activities in Myanmar over its ties to Myanmar’s military junta – which the UN says is guilty of human rights abuses – and allegations of “massively” overstating its climate impact.
The company behind the scheme said its engagement with authorities “should not be interpreted as political endorsement” of the junta, while disputing the calculations underpinning the claim that too many credits had been issued.
The post Most “zombie credits” locked out of new UN carbon market after China and India snub appeared first on Climate Home News.
Most “zombie credits” locked out of new UN carbon market after China and India snub
Three countries have been named by the Paris Agreement’s compliance committee for failing to submit a nationally determined contribution (NDC) and repeatedly snubbing offers of help with their climate plans.
After months of internal debate over whether to identify serial non-responders, the Paris Agreement’s Implementation and Compliance Committee (PAICC) named the three countries which have failed to engage with it over their NDCs on Friday.
It named Democratic Republic of Congo, Senegal and North Korea in a footnote of its annual report, adding that it decided to name them “with a view to facilitating engagement”, adding that representatives of the three nations had been invited to its meeting in early 2027 “with the purpose of identifying any challenges and constraints”.
“The Committee noted the importance of Parties engaging with the Committee in a timely manner, while noting that some delays may be due to the national capabilities and circumstances of the Parties”, the report said.
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Paris Agreement committee snubbed over missing NDC climate plans
Many governments have still not submitted a nationally determined contribution to the UN, breaching a key requirement of the Paris Agreement
In July, PAICC said 12 countries had ignored its repeated attempts to discuss why they had not published an NDC as required every five years under the 2015 Paris accord.
Members of the committee had been divided over whether to name them, but at a September meeting decided to do so in their annual report to the annual climate COP summit.
By the time the report was published on Friday, only Congo, Senegal and North Korea “had not communicated an NDC or submitted a [Biennial Transparency Report] and had not yet responded to any of the Committee’s notifications, despite several reminders issued by the Committee in this regard”.
Rainforest and renewable energy ambitions
The silence from Congo and Senegal is notable because the former is home to much of the Congo Basin rainforest while the latter has sought billions of dollars in climate finance to support its renewable energy ambitions.
After Brazil, Congo has more rainforest than any country in the world. This forest, and the country’s peatlands, absorb huge amounts of greenhouse gas but are fast being lost to expanding farmland, charcoal production, logging and mining.
Senegal signed a Just Energy Transition Partnership with Canada and wealthy European nations in 2023, to help it meet its renewable energy targets under the-then government of Macky Sall. It was chair of the Least Developed Countries group between January 2022 and December 2023.
Tejas Rao, who is researching the PAICC as part of a doctoral thesis at Cambridge University, said the governments of the three countries should engage with the committee.
“Engagement costs these governments very little and the committee has shown it will listen,” he said.
“Silence leaves the committee with no basis to help, and it leaves the [governments] exposed to the narrative that they are simply disengaged,” he told Climate Home News.
Paris Agreement requirement
The 2015 Paris Agreement requires all parties to publish an NDC every five years outlining their emissions reduction targets, with each plan meant to be more ambitious than the country’s last NDC.
The latest set – the third round of plans, with new targets for 2035 – was due in February 2025. While most countries missed this deadline, all but around 30 – mostly small emitters but including Egypt, Vietnam and Argentina – have now submitted them.
Over the year, the PAICC – which is made up of government climate officials from developed and developing countries – has been communicating with governments that have not submitted NDCs and trying to overcome barriers to them doing so.
Some nations have cited exceptional circumstances as the reason for not submitting an NDC, a process that requires a significant amount of work in tracking emissions and consulting on how to curb them across the economy. For example, a letter from a Sudanese official to the PAICC, seen by Climate Home News, said that the country’s civil war had led to the suspension of its NDC preparation.
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The US and Iran are not signed up to the Paris Agreement and so do not have active NDCs, nor does Taiwan, which is not a UN member state.
Rao said that because the PAICC is “facilitative and non-punitive”, naming the countries “is meant to open a door, not close one – the invited consultation is the point”.
“In recent months, governments that explained their constraints, whether capacity, finance or domestic process, have been met with follow-up and support rather than sanction, and the number of silent governments has fallen sharply,” Rao said.
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Paris Agreement committee names three countries snubbing it over NDCs