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As per data available earlier this year from the United Nations Framework Convention on Climate Change (UNFCCC) and United Nations Environment Program (UNEP) Copenhagen Climate Center’s (CCC) Article 6 pipeline, there were 3,333 project activities (PAs) and 169 programs of activities (PoAs) (with 1,264 component project activities, or CPAs, therein) that were eligible to transition from the CDM to the PACM.
Of those that were eligible to transition, 1,389 PAs and 119 PoAs (1,077 CPAs) met the deadline of submitting a request for transition — which was December 31, 2023, for all project activities except for Afforestation, Reforestation and Revegetation (ARR) project activities, which had a deadline of December 31, 2025.
Attaining approval from the host country, the next step in the transition process, was a crucial administrative step for the PACM pipeline. In February, 93% of the PAs (1,280) and 65% of the PoAs (77 PoAs with 467 CPAs therein) were still awaiting this approval, making it a significant impediment for transitioning projects.
As per the recent UNFCCC transition data available, of the 1,512 PAs that were seeking transition, 1,097 PAs (73%) — which had the potential to issue up to 490 million tCO2e from vintage 2021-2025 — were unable to acquire the required host country approvals.
As per UNFCCC rules, any remaining un-transitioned credits left in the CDM pending account will face administrative cancellation on July 1, 2027.
Of the projects that were axed from the pipeline post the June deadline, there were six jurisdictions that did not fulfil the criteria of setting up a Designated National Authority (DNA). This category included 18 PAs with a cumulative potential of issuing up to 17 million tCO2e in their current crediting period. Iran (eight PAs, 7 million tCO2e), Qatar (two PAs, 4 million tCO2e) and Singapore (one PA, 2 million tCO2e) were a few of the host parties that were yet to set up a DNA.
Notably Singapore is active in the Article 6 markets with nearly 30 bilateral implementation agreements with countries across Asia, Africa and South America. But Singapore will typically be on the buy side of the market and will leverage these existing bilateral frameworks to buy credits to meet its climate targets.
Projects whose host countries had not fulfilled the regulatory criteria required to participate in the PACM under Article 6.4 of the Paris Agreement by the June deadline were unable to complete the transition process. This accounted for 563 PAs, with potential issuance of up to 270 million tCO2e, that will no longer proceed through the PACM pipeline.
China represented the largest share of this category, with 527 PAs and potential issuance of up to 251 million tCO2e.
The next category of PAs axed from the pipeline were those that were unable to secure approval from their respective host countries to transition, meaning they had met the initial procedural requirement to request transition, but were ultimately blocked from moving forward without a formal host-country green light.
Notable here is India, which did not provide approvals to any of the 460 PAs (up to 182 million tCO2e) that requested transition to PACM.
The charts below shows the geographic distribution of active PACM transitioning projects before and after the June 30 deadline.
Currently, 415 PAs, representing potential issuance of up to 617 million tCO2e, remain in the CDM transition pipeline out of the initial 1,512 seeking transition. The majority of these, i.e. 371 PAs with potential issuance of up to 387 million tCO2e, are pending additional documentation from activity participants.
Under the UNFCCC transition procedure, this step requires activity participants to submit an addendum to the Project Design Document (PDD). The additional documentation must also demonstrate compliance with Article 6.4 transition requirements, including applicable activity-design, methodology, environmental and social safeguards, and sustainable-development provisions, before the request can move to processing and finalization under the PACM. Project developers have until December 31 to provide the outstanding information, after which projects that fail to do so will be removed from the transition pipeline.
Within this category, Brazil has the largest number of PAs pending additional documentation, at 92, followed by Chile with 29 and Vietnam with 23.
The remaining 44 PAs, as of last week, have progressed to subsequent stages in the transition, which include transition fee pending (four PAs), assessment in progress (five PAs), substantive check completed (10 PAs), approved (two PAs) and registered (23 PAs).
Of the 23 registered projects, 7 PAs are in Bangladesh (up to 136,300,916 tCO2e) wherein reducing gas leakage within gas distribution network projects are the most common project type. Meanwhile Uganda has 5 PAs registered (up to 4 million tCO2e) with improved cookstove projects as the most common project type.
But cookstove projects that deploy TOOL 30 to calculate their fraction of non-renewable biomass (fNRB) values under CDM will now, under PACM, have to shift to an approach that adheres to the updated TOOL 33 to ascertain the project’s fNRB. A previous analysis of the PACM pipeline by Fastmarkets demonstrated average fNRB values falling by nearly 33% when compared with CDM, meaning that applying new fNRB values from TOOL33 in projects that utilize this variable will result in about a 51% decrease of expected issuances in the activity period from 2021 to 2025.
Additionally, of the 415 PAs still in active pipeline, only 64 projects (up to 67 million tCO2e) have opted to replace the currently applied CDM methodology with an Article 6.4 methodology at transition, while 351 PAs (up to 550 million tCO2e) have opted to continue applying the currently applied CDM methodology at transition.
Projects that have opted to continue applying CDM methodologies will be able to issue credits for vintage 2021-2025 using the old methodologies, but since all credits generated after December 31, 2025, must align with Article 6.4 rules, projects will have to revise and revalidate their PDDs by whichever occurs later — either within one year from the date of host country approval, or within one year from the date of specific Article 6.4 methodology being approved by the Supervisory Body.
Approval of methodologies by the 6.4 Supervisory Body will significantly boost issuances under PACM (especially post-2025 vintages). Currently the sparse list of approved methodology under PACM includes flaring and use of landfill gas (approved in October 2025) and nitrous oxide abatement in nitric acid production (approved in May 2026).
As per the 2026 work plan, the Supervisory Body is working on developing multiple methodological products, including the revision of existing CDM methodologies for crediting emission reduction by efficient cookstoves and renewable energy. These may be expected in the upcoming SB meetings this year on July 27-30 (SBM 22) and October 5-9 (SBM 23).
Additionally, the first request for issuance under PACM was approved for a Myanmar-based cookstove PoA that has successfully transitioned from the CDM in February 2026. The project has emission reduction achievement of 648,783 tCO2e for the January 1, 2021-May 31, 2022, vintage period.
Since, issuance approval for another Myanmar-based cookstove PoA (reference number: 10415) has been processed with emission reduction achievement of 330,042 tCO2e for 2021 vintage and 133,331 tCO2e for the January 1, 2022-May 31, 2022, vintage period.
It is noteworthy that both PoAs with approved issuances under PACM have letter of authorization (LoA) from relevant Myanmar authorities with authorized use toward achievement of the buyer country’s Nationally Determined Contribution (NDC) and use for other international mitigation purposes (OIMP) which includes usage under International Civil Aviation Organization’s (ICAO) Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).
The absence of approvals from China and India, historically two of the largest CDM credit suppliers, suggests major host countries are weighing PACM participation against domestic policy priorities. China’s non-approval removed 527 PAs, with potential issuance of up to 250 million tCO2e, from the transition pipeline, while India did not approve any of the 460 PAs, with potential issuance of up to 180 million tCO2e, that sought transition.
The decisions may reflect caution over how transferred mitigation outcomes would interact with domestic emissions accounting, NDC delivery and emerging domestic carbon market frameworks, including India’s Carbon Credit Trading Scheme (CCTS) and the China Certified Emission Reduction (CCER) and national ETS.
India’s position is particularly notable because, despite publishing a sector-wide whitelist for international carbon-market participation, it did not grant PACM transition approvals to any of the projects seeking them. This highlights the difference between identifying sectors that could, in principle, participate under Article 6 and issuing project-level authorization under the UN mechanism.
By contrast, countries such as Vietnam, South Korea and Laos appear to be taking a more selective approach, with Vietnam approving 23 of the 44 PAs that sought transition, while South Korea approved seven of 17 PAs and Laos approved one of eight seeking host country approvals.
The result is a PACM transition pipeline shaped not only by UNFCCC process requirements, but also by host-country strategy. With the largest historical CDM suppliers holding back, near-term supply is likely to be concentrated in countries willing to authorize specific project types, while future issuance growth will depend on whether major hosts see Article 6.4 participation as compatible with domestic carbon market development and NDC accounting needs.
As host countries decide whether to participate in PACM under Article 6.4, the fate of nearly 1,100 stalled projects will shape who can supply credible carbon credits and who can’t. Fastmarkets tracks PACM transition status, methodology approvals and the host country decisions that sit behind Article 6.4 eligibility. Understand what China’s and India’s non-approval, and the rest of the pipeline’s documentation backlog, mean for your sourcing and pricing with our carbon team. Reach us at carbonsupport@fastmarkest.com.
Track DNA status, transition approvals and Article 6.4 activity across 23 markets with our Country Profiles module