UN Climate Change Press Release, 16 May 2025 – The UN body overseeing the Paris Agreement Crediting Mechanism (PACM) has adopted critical new standards aimed at ensuring transparency, integrity, and ambition in how climate projects generate carbon credits.
The newly agreed rules define how emission-reducing projects should measure their actual climate impact. Two pivotal standards were adopted: one for establishing “baselines” — the emissions that would have occurred without the project — and another for addressing “leakage” — unintended emission increases elsewhere caused by a project’s implementation.
In a historic move, the baseline standard introduces a required downward adjustment in emissions estimates: initial baselines must be set at least 10% below business-as-usual levels, with a mandated minimum 1% reduction over time. This ensures that the mechanism contributes to real and measurable progress toward global net-zero targets and prevents over-crediting.
The leakage standard will help project developers assess and mitigate indirect emissions, particularly emphasizing alignment with national climate strategies for REDD+ activities (Reducing Emissions from Deforestation and Forest Degradation). Projects must now integrate with host countries’ national REDD+ strategies to qualify for credits, strengthening both accountability and national ownership.
“These decisions ensure crediting levels reflect a pathway to net neutrality,” said Martin Hession, Chair of the Supervisory Body. “We’re providing host countries with the tools and communication channels needed to secure fair mitigation benefits and build long-term capacity.”
Vice Chair Maria AlJishi underscored the significance of the stakeholder input that shaped the standards, stating they offer project developers the clarity required to start designing robust activities under the PACM.
Additional outcomes from the Supervisory Body’s sixteenth meeting include new guidance on equitable benefit-sharing with host countries, enhanced support for national capacity-building, and updates to older cookstove projects in line with current data and standards.
Although fewer than expected legacy projects from the Clean Development Mechanism are transitioning into the PACM, the Supervisory Body acknowledged a potential short-term funding gap. New PACM-aligned projects are expected to ramp up from 2026.
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The first PACM methodologies are scheduled for approval by the end of 2025, with continued work on tools, guidelines, and the central Registry to follow — key steps toward fully operationalizing the mechanism.
The PACM, also known as Article 6.4 of the Paris Agreement, enables countries and organizations to collaborate on verifiable emission reductions by issuing high-integrity carbon credits, thereby supporting global climate action at scale.
