The Paris Agreement Crediting Mechanism (PACM) has officially approved its first project—a cookstove initiative in Myanmar. This marks a major milestone for the UN-backed carbon credit system, designed to ensure high-integrity offsets.
But with concerns over inflated climate benefits, is this approval a win for carbon markets or a warning sign of deeper issues? Let’s uncover the details behind this historical market development.
What is PACM?
The Paris Agreement Crediting Mechanism is a global initiative designed to improve the quality and integrity of carbon credits. Carbon credits are permits that let companies offset their greenhouse gas (GHG) emissions. Companies invest in projects that reduce or remove CO₂ from the atmosphere.
The PACM was set up under Article 6.4 of the Paris Agreement. This article lets countries team up and trade emission reduction units, also called A6.4ERs (Article 6.4 Emission Reductions Units), to reach their climate goals.

The PACM is different from private carbon credit programs. It is an official system backed by the United Nations (UN). This means it has more oversight and credibility.
The UN carbon credit system was finalized at COP28 in 2024. It replaces the Clean Development Mechanism (CDM). The CDM faced criticism for allowing low-quality carbon credits. Many CDM projects lacked “additionality.” This means they would have happened without carbon credit funding. As a result, they undermine real climate action.
PACM introduces stricter rules to ensure credits represent real, measurable, and verifiable emission reductions. It boosts baseline standards. It also requires upfront credit registration, which stops retroactive project approvals.
This UN-backed system aims to boost trust in carbon markets and ensure they contribute meaningfully to nations’ climate goals, also known as Nationally Determined Contributions.

With over 3,500 companies committed to net-zero, demand for high-quality credits is rising. PACM’s stricter standards can help companies buy reliable carbon offsets. This reduces the risk of “junk credits” that offer little or no real environmental benefit.
CDM’s Shadow Over PACM
One of the most debated aspects of the PACM is the transition of projects from the CDM to the new system. The CDM started in 2001. It lets countries and companies earn carbon credits by funding projects that reduce emissions in developing nations.
Over time, it became clear that many CDM projects lacked integrity. They didn’t reduce emissions beyond what would happen anyway.
Facing pressure from China and India, PACM negotiators decided to let CDM projects seek PACM approval until the end of 2025. This transition period was meant to prevent disruptions in the carbon credit market. However, experts worry that it opens the door for low-quality projects to flood the system before stricter PACM rules take effect.
According to an analysis by the NewClimate Institute, over 1,000 CDM projects have applied for PACM status, including:
- Large-scale hydropower and wind energy projects that likely would have been built anyway, with or without carbon credit funding.
- Methane capture projects in landfills, which may not meet stricter PACM rules on baseline emissions.
- Cookstove projects, which have long been controversial due to questions about how much wood use they actually reduce.
The NewClimate Institute warns that if all these projects get PACM approval, hundreds of millions of carbon credits may flood the market. Their climate benefits are unclear. This could undermine trust in the PACM before it even becomes fully operational.
The video explains the transition from CDM to PACM:
First Project Approval: Myanmar Cookstove Initiative
The first PACM-approved project is in Myanmar. It’s a cookstove program that helps families use less firewood. This also lowers CO₂ emissions. By switching to these stoves, communities can slow deforestation and improve indoor air quality, reducing respiratory health risks.
Household cooking makes up 2-3% of global CO₂ emissions. This mainly comes from burning wood and charcoal. Improved cookstoves provide climate and health benefits. However, the Myanmar project has received criticism.
- Calyx Global rated it Tier 3, the lowest quality category, due to concerns about inflated carbon savings.
The ratings company stated:
“Although the PACM may soon include stricter methodological requirements for GHG integrity of cookstove carbon credits, for now, GHG integrity – and especially over-crediting – remains a key concern at the project level.”
A big problem is the dependence on non-renewable biomass (fNRB) estimates. These estimates decide how much firewood reduction is claimed. Critics argue that project developers overestimated deforestation avoidance, exaggerating climate benefits.
The Integrity Council for the Voluntary Carbon Market (ICVCM) recently rejected this methodology, raising further doubts about its credibility.
But Calyx Global also noted that the project’s rating can still go up to a Tier 1 rating if it delivers its promised reductions.

Concerns About PACM’s Credibility
The approval of the Myanmar project has raised concerns. Will the PACM deliver on its promise of high-quality carbon credits? The mechanism looks good on paper, but in reality, many low-quality projects might get approved. Stricter rules won’t start until 2026.
Carbon market experts say that giving PACM certification to these projects might hurt trust in the system. This could happen even before it is fully implemented. If buyers see that PACM credits are just as bad as old, low-quality CDM credits, the whole initiative might lose credibility.
To address these concerns, experts like Lambert Schneider from the Oeko-Institut suggest that carbon credit buyers should be extremely cautious when purchasing PACM credits. He advises companies to carefully check whether a credit comes from a transferred CDM project or a newly approved PACM project.
What Needs to Happen Next?
The PACM could become the gold standard for carbon credits. However, it must quickly tighten its rules. This will help stop low-integrity projects from flooding the market. Key areas for improvement include:
- Stronger baseline rules to ensure reductions are calculated using reliable estimations.
- More transparency in disclosing data on methodologies and impact.
- Independent verification by 3rd-party auditors.
The Paris Agreement Crediting Mechanism represents a major step toward a more credible and effective carbon market. The next few years are key. They will decide if the PACM becomes a trusted source for carbon credits or just another place for dubious emissions reductions.
The post UN Carbon Credit System Makes History With First Project Approval But Raises Concerns appeared first on Carbon Credits.
Carbon Footprint
Climate Impact Partners Unveils High-Quality Carbon Credits from Sabah Rainforest in Malaysia
The voluntary carbon market is changing. Buyers are no longer focused only on large volumes of cheap credits. Instead, they want projects with strong science, long-term monitoring, and clear proof that carbon has truly been removed from the atmosphere. That shift is drawing more attention to high-integrity, nature-based projects.
One project now gaining that spotlight is the Sabah INFAPRO rainforest rehabilitation project in Malaysia. Climate Impact Partners announced that the project is now issuing verified carbon removal credits, opening access to one of the highest-quality nature-based removals currently available in the global market.
Restoring One of the World’s Richest Rainforest Ecosystems
The project is located in Sabah, Malaysia, on the island of Borneo. This region is home to tropical dipterocarp rainforest, one of the richest forest ecosystems on Earth. These forests store huge amounts of carbon and support extraordinary biodiversity. Some dipterocarp trees can grow up to 70 meters tall, creating habitat for orangutans, pygmy elephants, gibbons, sun bears, and the critically endangered Sumatran rhino.
However, the forest within the INFAPRO project area was not intact. In the 1980s, selective logging removed many of the most valuable tree species, especially large dipterocarps. That caused serious ecological damage. Once the key mother trees were gone, natural regeneration became much harder. Young seedlings also had to compete with dense vines and shrubs, which slowed the forest’s recovery.
To repair that damage, the INFAPRO project was launched in the Ulu-Segama forestry management unit in eastern Sabah.
- The project has restored more than 25,000 hectares of logged-over rainforest.
- It was developed by Face the Future in cooperation with Yayasan Sabah, while Climate Impact Partners has supported the project and helped bring its credits to market.
Why Sabah’s Carbon Removals are Attracting Attention
What makes Sabah INFAPRO different is not only the size of the restoration effort. It is also the way the project measured carbon gains.

Many forest carbon projects issue credits in annual vintages based on year-by-year growth estimates. Sabah INFAPRO followed a different path. It used a landscape-scale monitoring system and waited until the forest moved through its strongest natural growth period before issuing removal credits.
- This approach gives the credits more weight. Rather than relying mainly on short-term annual estimates, the project measured carbon sequestration over a longer period. That helps show that the forest delivered real, sustained, and measurable carbon removal.
The scientific backing is also unusually strong. Since 2007, the project has maintained nearly 400 permanent monitoring plots. These plots have allowed researchers, independent auditors, and technical specialists to observe the full growth cycle of dipterocarp forest recovery. The result is a large body of field data that supports carbon calculations and strengthens confidence in the credits.
In simple terms, buyers are not just being asked to trust a model. They are being shown years of direct forest monitoring across the project landscape.
Strong Ratings Support Market Confidence
Independent assessment has also lifted the project’s profile. BeZero awarded Sabah INFAPRO an A.pre overall rating and an AA score for permanence. That places the project among the highest-rated Improved Forest Management, or IFM, projects in the world.
The rating reflects several important strengths. First, the project has very low exposure to reversal risk. Second, it has a long and stable operating history. Third, its measured carbon gains align well with peer-reviewed ecological research and independent analysis.
These points matter in today’s market. Buyers have become more cautious after years of debate over the quality of some forest carbon credits. As a result, they now look more closely at durability, transparency, and third-party validation. Sabah INFAPRO’s rating helps answer those concerns and makes the project more attractive to companies looking for credible carbon removal.
The project is also registered with Verra’s Verified Carbon Standard under the name INFAPRO Rehabilitation of Logged-over Dipterocarp Forest in Sabah, Malaysia. That adds another level of market recognition and verification.
A Wider Model for Rainforest Recovery
Sabah INFAPRO also shows why high-quality nature-based projects are about more than carbon alone. The restoration effort supports broader ecological recovery in one of the world’s most important rainforest regions.
Climate Impact Partners said it has worked with project partners to restore degraded areas, run local training programs, carry out monthly forest patrols, and distribute seedlings to support rainforest recovery beyond the project boundary. These efforts help strengthen the wider landscape and expand the project’s environmental impact.
That broader value is becoming more important for buyers. Companies increasingly want projects that support biodiversity, ecosystem health, and local engagement, along with carbon removal. Sabah INFAPRO offers that mix, making it a stronger fit for the market’s shift toward higher-integrity credits.

The post Climate Impact Partners Unveils High-Quality Carbon Credits from Sabah Rainforest in Malaysia appeared first on Carbon Credits.
Carbon Footprint
Bitcoin Falls as Energy Prices Rise: Why Crypto Is Now an Energy Market Story
Bitcoin’s recent drop below $70,000 reflects more than short-term market pressure. It signals a deeper shift. The world’s largest cryptocurrency is becoming increasingly tied to global energy markets.
For years, Bitcoin has moved mainly on investor sentiment, adoption trends, and regulation. Today, another force is shaping its direction: the cost of energy.
As oil prices rise and electricity markets tighten, Bitcoin is starting to behave less like a tech asset and more like an energy-dependent system. This shift is changing how investors, analysts, and policymakers understand crypto.
A Global Power Consumer: Inside Bitcoin’s Energy Use
Bitcoin depends on mining, a process that uses powerful computers to verify transactions. These machines run continuously and consume large amounts of electricity.
Data from the U.S. Energy Information Administration shows Bitcoin mining used between 67 and 240 terawatt-hours (TWh) of electricity in 2023, with a midpoint estimate of about 120 TWh.

Other estimates place consumption closer to 170 TWh per year in 2025. This accounts for roughly 0.5% of global electricity demand. Recently, as of February 2026, estimates see Bitcoin’s energy use reaching over 200 TWh per year.
That level of energy use is significant. Global electricity demand reached about 27,400 TWh in 2023. Bitcoin’s share may seem small, but it is comparable to the power use of mid-sized countries.
The network also requires steady power. Estimates suggest it draws around 10 gigawatts continuously, similar to several large power plants operating at full capacity. This constant demand makes energy costs central to Bitcoin’s economics.
When Oil Rises, Bitcoin Falls
Bitcoin mining is highly sensitive to electricity prices. Energy is the highest operating cost for miners. When power becomes more expensive, profit margins shrink.
Recent market movements show this link clearly. As oil prices rise and inflation concerns persist, energy costs have increased. At the same time, Bitcoin prices have weakened, falling below the $70,000 level.

This is not a coincidence. Studies show a direct relationship between Bitcoin prices, mining activity, and electricity use. When Bitcoin prices rise, more miners join the network, increasing energy demand. When energy costs rise, less efficient miners may shut down, reducing activity and adding selling pressure.
This creates a feedback loop between crypto and energy markets. Bitcoin is no longer driven only by demand and speculation. It is now influenced by the same forces that affect oil, gas, and power prices.
Cleaner Energy Use Is Growing, but Fossil Fuels Still Matter
Bitcoin’s environmental impact depends on its energy mix. This mix is improving, but it remains uneven.
A 2025 study from the Cambridge Centre for Alternative Finance found that 52.4% of Bitcoin mining now uses sustainable energy. This includes both renewable sources (42.6%) and nuclear power (9.8%). The share has risen significantly from about 37.6% in 2022.
Despite this progress, fossil fuels still account for a large portion of mining energy. Natural gas alone makes up about 38.2%, while coal continues to contribute a smaller share.

This reliance on fossil fuels keeps emissions high. Current estimates suggest Bitcoin produces more than 114 million tons of carbon dioxide each year. That puts it in line with emissions from some industrial sectors.
The shift toward cleaner energy is real, but it is not complete. The pace of change will play a key role in how Bitcoin fits into global climate goals.
Bitcoin’s Climate Debate Intensifies
Bitcoin’s growing energy demand has placed it at the center of ESG discussions. Its impact is often measured through three key areas:
- Total electricity use, which rivals that of entire countries.
- Carbon emissions are estimated at over 100 million tons of CO₂ annually.
- Energy intensity, with a single transaction using large amounts of power.

At the same time, the industry is evolving. Mining companies are adopting more efficient hardware and exploring new energy sources. Some operations use excess renewable power or capture waste energy, such as flare gas from oil fields.
These efforts show progress, but they do not fully address the concerns. The gap between Bitcoin’s energy use and its environmental impact remains a key issue for investors and regulators.
- MUST READ: Bitcoin Price Hits All-Time High Above $126K: ETFs, Market Drivers, and the Future of Digital Gold
Bitcoin Is Becoming Part of the Energy System
Bitcoin mining is now closely integrated with the broader energy system. Operators often choose locations based on access to cheap or excess electricity. This includes areas with strong renewable generation or underused energy resources.
This integration creates both opportunities and challenges. On one hand, mining can support energy systems by using power that might otherwise go to waste. It can also provide flexible demand that helps stabilize grids.
On the other hand, it can increase pressure on local electricity supplies and extend the use of fossil fuels if cleaner options are not available.
In the United States, Bitcoin mining could account for up to 2.3% of total electricity demand in certain scenarios. This highlights how quickly the sector is scaling and how closely it is tied to national energy systems.
Energy Markets Are Now Key to Bitcoin’s Future
Looking ahead, the connection between Bitcoin and energy is expected to grow stronger. The network’s computing power, or hash rate, continues to reach new highs, which typically leads to higher energy use.
Electricity will remain the main cost for miners. This means Bitcoin will continue to respond to changes in energy prices and supply conditions. At the same time, governments are starting to pay closer attention to crypto’s environmental impact, which could shape future regulations.

Some forecasts suggest Bitcoin’s energy use could rise sharply if adoption increases, potentially reaching up to 400 TWh in extreme scenarios. However, cleaner energy systems could reduce the carbon impact over time.
Bitcoin is no longer just a financial asset. It is also a large-scale energy consumer and a growing part of the global power system.
As a result, understanding Bitcoin now requires a broader view. Energy prices, electricity markets, and carbon trends are becoming just as important as market demand and investor sentiment.
The message is clear. As energy markets move, Bitcoin is likely to move with them.
The post Bitcoin Falls as Energy Prices Rise: Why Crypto Is Now an Energy Market Story appeared first on Carbon Credits.
Carbon Footprint
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