Overview of Article 6.

4 of the Paris
Agreement. The Mechanism
Webinar #1 Regional Collaboration Centres
Webinar Series: II
Overview of Article 6
29 August 2023
Webinar I | Overview of Article 6 of
the Paris Agreement

Regional Collaboration Centres

Webinar Series

Tuesday, 22nd August 2023

Agenda

§ Paris Agreement Antecedents

§ Paris Agreement Key Elements
§ The Ambition Cycle
§ Article 6 Structure
§ Differences between Kyoto Protocol and Article 6
§ Article 6 Requirements (6.2, 6.4, 6.8)
§ Why does all of this Matter?
§ A6 Strategy & opportunities for the private Sector
§ Article 6.2 cooperative approach

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Session I – Article 6 of the Paris
Agreement

Regional Collaboration Centres

Paris Agreement – what is it and why does it matter?

The Paris Agreement – Antecedents

1992 1997 2015

United Nations Kyoto Protocol Paris Agreement

Framework Convention
on Climate Change Legally binding instrument for developed
countries with emission reduction Top-down targets and bottom-up actions
(“NDC")
targets.
Enabling framework for international
cooperation to combat climate change
Article 6 of the Paris Agreement – what is it and why does it matter?

The Paris Agreement – Key Elements

• Progressively • Means of
increase Implementation
Ambition
through goals
Article 6 Action
(Mitigation,
NDCs Adaptation
and Finance
Flows)

Enhanced
Global
transparency
stocktake Framework

• Science and • Implementation

review and
Compliance
Article 6 of the Paris Agreement,– what is it and why does it matter?

The Paris Agreement – The ambition cycle

The objective of the Paris Agreement is “to hold the increase in global average temperature to well
below 2 degrees Celsius (°C) above pre-industrial levels and to pursue efforts to limit it to 1.5°C
(Article 2).
Ambition cycle Intended to lead to Net zero emissions

The ambition cycle is a “ratcheting-up” mechanism which aims to increase ambition based on regular
stocktakes of information from Parties, submissions of progressive national climate plans, and the
latest science on climate change
Deadline for Final Deadline for Final Biennial
Biennial Reports Update Reports (Non
(Annex-I) Annex-I)
1st Global Communicate 2nd Communicate
stocktake 2035 NDCs Global 2040 NDCs
stocktake

COP27 COP28 COP29 COP30 COP31 COP32 COP33 COP34 COP35

Deadline for 1st

Deadline for 2nd Deadline for 3rd BTR
Biennial
BTR (except (except LDCs and
Transparency
LDCs and SIDS) SIDS)
Report
 Article 6 of the Paris Agreement,– what is it and why does it matter?

Article 6 – Structure
Countries can voluntarily cooperate to achieve their NDCs in whatever way they wish. Article 6 of the PA
provides for different options of cooperation:

6.2 6.4 6.8

Article 6.2 Cooperative Article 6.4 The New Mechanism – Article 6.8 Non-Market
Approaches – decentralized centralized approach similar to the Approaches – promoting
approach with basic guidance Clean Development Mechanism, mitigation and adaptation
from the Parties (CMA), “an baseline-and-crediting mechanism. cooperation that does not
accounting mechanism”, type of Subject to UNFCCC governance involve the transfer of
cooperation not defined mitigation outcomes

Objectives: for Art. 6.2 & 6.4

§ Increasing climate ambition in a cooperative manner.
§ Participants: Country Parties to the Paris Agreement.
§ Trading Unit: ITMOs International Oversight through
Modalities, Procedures and Guidelines.
Article 6 Participation Requirements
Article 6 : 6.2 vs 6.4

Article 6.2 Cooperative approaches Article 6.4 The Mechanism

§ It has to be a Party to the Paris Agreement
§ It has prepared, communicated and is maintaining an NDC
§ It has provided the most recent national inventory report required
§ Its participation contributes to the implementation of its NDC and long-term low-emission
development strategy, if it has submitted one, and the long-term goals of the Paris Agreement.
Arrangements in place for authorizing and Indicated to the SB how participation in the
tracking the use of ITMOs towards achievement mechanism contributes to SD
of NDCs
MOs = Mitigation Outcomes A6.4ERs = Emission Reduction

NIR (as part of BTR) Has a DNA in place /

Indicated to the SB how participation in the

mechanism contributes to SD
Must specify the type of A6.4 activities it would
consider approving
May specify baseline approaches and crediting
periods
Article 6 Participation Requirements
Article 6 : 6.8 Non-Market Approaches
Does not involve commercialization. Will facilitate climate action through international
cooperation focused on sustainable development and poverty eradication (non-market)

• No transfer of mitigation outcomes

• Initial focus areas: mitigation, adaptation, clean energy
• Type of support: finance, capacity building, technology
• Requires the participation of more than one Party
• Environmental and social impact safeguards apply
• Web-based platform (under development) as central element to record NMAs and
give an overview of sources of support
 Why does all this matter?
§ Article 6 is an important part of the world’s “toolbox” for addressing climate change
§ Article 6 is the only part of the PA that directly engages the business and private
investment sector in directly implementable activities in which they can invest
§ In addition to the trading instruments, implementation of NMA is essential to
contribute to sustainable development and poverty eradication
§ NDCs implementation reduced by half as much as ($250 billion by 2030)
or facilitate removal of 50% more emissions (about 5 GT of Co2 e/ year by 2030)
§ There is strong real-world potential for cooperative action - shown by existing pilot
Article 6 projects, with the UN decisions in Glasgow understanding the overall
impact of cooperative action on global mitigation is facilitated
§ Centralized mechanism helps in ensuring broader accessibility of markets

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Article 6 of the Paris Agreement – Strategy & opportunities for
the private Sector
Article 6 – Implementation strategy
§ The prioritization of preferred Art 6.2 activities may conclude on a defined strategy for Art. 6.2
participation that ensures activities go beyond the NDC targets and may respond to:

§ Which sectors will be targeted?

§ Which types of activities are preferable in these sectors?

§ This strategy will also support:

§ Understanding the medium and long-term objectives.

§ Establish overall objectives that will guide participation, such as the number of
Mitigation Outcomes that the government intends to transfer.
§ A detailed and even public country-level strategy is likely to provide confidence to

§ donor countries and institutions and

§ Sectoral ministries, government agencies and the private sector

§ Once a strategy is in place, several implementation processes are closely related to this strategy- it
is the Art 6 Framework.

§ Opportunity for the Private Sector: Financing higher-cost mitigation measures & generate
Sustainable development co-benefits as part of social and environmental contribution.
 Session II – Article 6.2.
Cooperative Approaches
 Article 6.2 - Key Concepts & Participation Requirements

Key Concepts
ITMOs (Internationally Transferred Mitigation Outcomes) - the result of different types
of activities, defined as real, verified, and additional, representing emissions reductions
or removals, and including mitigation co-benefits resulting from adaptation actions
and/or economic diversification plans or the means to achieve them.

§ Real, verified, and additional

§ Emission reductions and removals, including mitigation co-benefits
§ Generated in respect of or representing mitigation from 2021 onward
§ Measured in metric tonnes of carbon dioxide equivalent (t CO2 eq) or non-GHG metrics
determined by the participating Parties that are consistent with the nationally determined
contributions (NDCs) of the participating Parties
§ From a cooperative approach referred to in Article 6.2, (that involves the international
transfer of mitigation outcomes authorized for use towards an NDC)
§ Mitigation outcomes authorized by a participating Party for use for international mitigation
purposes other than achievement of an NDC.
§ Article 6, paragraph 4, authorized emission reductions.
 Article 6.2 - Key Concepts & Participation Requirements

Corresponding adjustments - countries’ emissions levels, as reported when they track the
progress towards achieving the NDC, should be adjusted to reflect the transfer (export) or
receipt (import) of mitigation outcomes.

Transferring Country (T) Adjusted Emissions Balance ITMOs

Transfer Receiving Country (R)
GHG Emissions Inventory

GHG Emissions Inventory

GHG Emissions Inventory

Emissions Balance
NDC Target NDC Target

Prior to After Adjusted Prior to After

mitigation Mitigation Emissions mitigation acquiring
Activity Activity Balance Activity ITMOs
Article 6.Reporting under Art 6

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 Article 6.2 - Implementation - Case study India

§ Mandate : Type of projects that may take part in international carbon market under Article
6.2 mechanisms
§ Following list of activities has been finalized to be considered for trading of carbon credits under
bilateral / cooperative approaches under Article 6.2 mechanism

GHG Mitigation Activities: Alternate Materials Removal Activities

1. Renewable energy with storage (only stored component) 12. Green Ammonia 13. Carbon Capture
2. Solar thermal power Utilization and Storage
3. Off- shore wind
4. Green Hydrogen
5. Compressed bio-gas
6. Emerging mobility solutions like fuel cells
7. High end technology for energy efficiency
8. Sustainable Aviation Fuel
9. § =>
Best Thesetechnologies
available activities will facilitate
for process adoption/transfer
improvement in hard toof emerging technologies and may be used to
abate sectors
mobilize international finance in India.
10. Tidal energy, Ocean Thermal Energy, Ocean Salt Gradient
Energy, Ocean Wave https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1900216
§ Energy and Ocean Current Energy
11. High Voltage Direct Current Transmission in conjunction with the
renewal energy project

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Session III – Country Intervention
Session III – Country Intervention

Thailand Singapore
Q&A Session - Case studies

§ What issues did your country encounter in

the early stages of implementing Article
6.2?

§ What good practices or approaches did

you developed to face these issues?

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 Thailand’s experience in implementing
Article 6 of the Paris Agreement
Thailand Greenhouse Gas Management Organization (Public Organization)
2023 Article 6 Webinar Series – Day 1: 22 August 2023 (Online)

องค$การบริหารจัดการก.าซเรือนกระจก
(องค$การมหาชน)

www.tgo.or.th
Thailand’s Action Role on Article 6 at COP 27

“… to explore the Cooperative Approaches,

Thailand has prepared the National Guidelines and
Mechanisms on Carbon Credit Management and is one
of the first countries to practice ITMOs under Article 6.2
of the Paris Agreement.”
- Statement by H.E. Mr. Varawut Silpa-archa
Minister of Natural Resources and Environment of the Kingdom of Thailand
COP 27 High-Level Segment

Thailand’s 2nd Updated NDC

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Thailand’s Readiness Preparation for engaging in Article 6

National Committee on Climate Change Policy (NCCC) approved the “Carbon

Credit Management Guideline and Mechanism” (CCMGM) which includes
national requirements and procedures for issuing Letter of Authorization and
approval of transfer of mitigation outcomes for international mitigation purposes.

Thailand Greenhouse Gas Management Organization (Public Organization)

or TGO serves as the administrator of mitigation activity standards and registry.

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 Thailand’s Authorization and Recognition of International Transfer Process
NCCC National Committee on Climate Change Policy
Projects must comply with the ONEP Office of Natural Resources and Environmental Policy and Planning

1 Authorization eligibility criteria set by the NCCC TGO Thailand Greenhouse Gas Management Organization (Public Organization)

Cabinet approves ONEP presents to

Project participants Cabinet approves
framework NCCC for approval ONEP issues Letter
submit project issuance of
(bilateral) & submit to of Authorizations
details to ONEP Authorizations
agreement Cabinet

2 Project Implementation

Project participants TGO reviews and Project participants Project participants ONEP examines
submit validated registers the implement the submit verified fulfilment of
project documents projects projects monitoring report AuthorizationsTGO

3 International Transfer

TGO issues credits Project participants TGO recognizes TGO submits ONEP performs CAs
in the registry request int’l int’l transfers in annual information and report to
system transfers the registry system to ONEP UNFCCC

Credits that are not int’lly transferred

can still be traded on domestic market Reference: Carbon Credit Management Guideline and Mechanism, approved by NCCC on 16 March 2022
 Ensuring high-integrity mitigation outcomes with T-VER standards

T-
VER Additional to BAU

Public participation
Standard Premium
T-VER T-VER
Do no Net Harm
Developed in 2014 Developed in 2022 with SDG Impacts
Premium T-VER requires additional demonstration
to ensure higher quality carbon credits Permanent
compared to standard T-VER. mitigation outcomes
Further information: https://ghgreduction.tgo.or.th/th/premium-t-ver.html

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Ensuring robust tracking through Thailand Carbon Credit Registry

Further information: https://registry.tgo.or.th

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Contact us

q RCC East and Southern Africa RCCEASAfrica@unfccc.int

q RCC Asia and Pacific; RCCAsiaPacific@unfccc.int
q RCC Caribbean; RCCCaribbean@unfccc.int
q RCC Latin America; RCCLatinAmerica@unfccc.int
q RCC MENA and South Asia; RCCMENAandSA@unfccc.int
q RCC West and Central Africa; RCCWACAfrica@unfccc.int

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THANK YOU FOR YOUR ATTENTION!