Regulatory Framework for Carbon Reduction Under New UN Paris Agreement Mechanism Set for Review

In October, the regulator of the new UN Paris Agreement Credit Mechanism (PACM) will consider rules regarding the non-permanence and reversals of carbon reduction efforts. The proposed guidelines suggest a negligible risk range of 0.5-2.5% over 100 years for land-based mitigation activities. The expert panel also aims to enhance flexibility in reporting timelines and introduce a materiality threshold for greenhouse gas releases. Additionally, public input is sought on revised methodologies and an investment analysis tool to ensure project viability.

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Published Sep 17, 2025

CARBON CAPTURE

In a significant step towards refining the regulatory framework of the new UN Paris Agreement Credit Mechanism (PACM), discussions are set to take place in early October regarding essential rules on carbon reduction non-permanence and reversals. The proposed guidelines, put forth by an expert panel under the UN climate body, suggest that a range of 0.5 to 2.5 percent over a century should be deemed as constituting a negligible risk of mitigation reversal.

As the PACM regulator prepares for this critical meeting, flexibility is a key focus. The panel is advocating for more lenient timelines for submitting reports related to potential reversals and introducing a materiality threshold for certain methodologies. This would allow for a more nuanced approach in determining whether the release of stored greenhouse gases should be classified as a reversal.

Moreover, the panel has finalized a draft tool for common practice analysis, which aims to assess the technological innovation of carbon mitigation activities under the PACM. A distinction between thresholds for least developed countries and small island developing states is also being considered, with options for either a unified or differentiated approach.

The panel is actively seeking public feedback on revisions to methodologies from the previous Clean Development Mechanism (CDM), including those related to flaring or utilizing landfill gas. This call for input is crucial, as the feedback will be evaluated during the panel's upcoming meeting in mid-October.

In addition, an investment analysis tool has been drafted to ensure that carbon credit projects demonstrate additionality—confirming that the investments would not have occurred without the financial impetus from carbon credits.

The UNFCCC secretariat has also completed the selection of experts for the Article 6.4 appeal and grievance roster, which is vital for maintaining the integrity of the new mechanism in contrast to its predecessor, the CDM. Furthermore, a new user guide has been published for the Article 6.4 Interim Mechanism Registry, which will facilitate initial transactions and the transition of certified emission reductions from the CDM registry to the PACM. This comprehensive approach underscores the ongoing commitment to enhancing the effectiveness and transparency of carbon reduction efforts under the Paris Agreement.