India and Japan have finalized rules for a new carbon credit partnership called the Joint Credit Mechanism (JCM), under the Paris Climate Agreement, officials said on Tuesday. Under the arrangement, Japanese investment and technology can help finance projects in India that reduce or eliminate greenhouse gas emissions. Carbon credits could also be shared between the two countries to help meet their climate goals, officials said.
India and Japan signed the JCM Memorandum of Cooperation last year. The rules for implementing the credit mechanism were approved on June 8, the Ministry of Environment, Forest and Climate Change said.
“The Government of the Republic of India and the Government of Japan have adopted the ‘Implementation Rule’ for the Joint Certification Mechanism on June 8, 2026, under Article 6.2 of the Paris Agreement of the United Nations Framework Convention on Climate Change (UNFCCC),” the ministry said in a statement on Tuesday.
The Memorandum of Cooperation established a framework for cooperation on mitigation activities that lead to the reduction or elimination of greenhouse gas emissions, while supporting sustainable development outcomes in India and contributing to the achievement of the Nationally Determined Contributions of both countries.
The implementation rule sets out strong governance arrangements, including a joint committee that will include representatives from both governments, transparent procedures for project approval, third-party certification and verification, sustainable development safeguards, and national registries to track the issuance and transfer of credits, officials said.
The government said the mechanism will help attract investment, bring low-carbon technologies to India, build technical capabilities, and support projects that reduce emissions while contributing to sustainable development. It also strengthens India’s commitment to climate action under the Paris Agreement.
“The joint certification mechanism demonstrates India’s firm commitment to climate action. It will stimulate investment, technology transfer and capacity building for projects involving low carbon technologies in India to support climate change mitigation and sustainable development,” the ministry said.
On Tuesday, a new analysis released by Zero Carbon Analytics (ZCA) raised concerns about Asia’s growing reliance on liquefied natural gas (LNG), suggesting it could deepen dependence on fossil fuels, expose economies to global price shocks, and lead to increased emissions linked to worsening climate impacts across the region.
The analysis addressed Japan’s role as one of the world’s largest LNG traders. It found that US liquefied natural gas – which Japan resells to nine Asian countries between 2020 and 2025 – generates emissions equivalent to those of about 17 coal-fired power plants operating for a year.
“Since 2021, Japan has sold more US LNG to other countries than it imported for domestic use. Between 2020 and 2025, about 31% of the US LNG bought and resold by Japan was shipped to Asia, including South Korea, China, India, Taiwan, Thailand, Singapore, Bangladesh, Pakistan and Malaysia,” the study found.
It said that an estimated 16.5 billion kilograms of LNG produced in the United States and resold by Japan resulted in about 63.5 billion kilograms of carbon dioxide emissions across the entire fuel supply chain. “The emissions associated with these sales were equivalent to the annual emissions of approximately 17 coal plants.”
