Japan and Vietnam revise JCM rules to align with Article 6
By Article 6 Network
Japan and Vietnam have revised the rules governing their Joint Crediting Mechanism (JCM) to bring them into line with Article 6 of the Paris Agreement. This puts the operational detail behind an updated bilateral agreement signed earlier this year. Vietnam is one of the largest JCM host countries, so the change affects a substantial pipeline of projects that could produce ITMOs for Japan.
Japan and Vietnam have updated the rules governing their JCM to make it consistent with Article 6. This follows a May 2026 update to the bilateral JCM agreement itself, which formally aligned the scheme with Paris Agreement carbon accounting rules.
The JCM is Japan’s bilateral crediting programme under Article 6.2. Japanese investment helps deploy decarbonisation technologies and infrastructure in partner countries, and the resulting credits are shared between Japan and the host. According to the JCM Agency, credits contribute to the NDCs of both countries and are also eligible for Japan’s domestic emissions trading system, the GX-ETS. Projects must quantify emission reductions and Japan’s financial contribution. Each partnership is run by a Joint Committee of both governments.
Vietnam is one of Japan’s most active JCM partners, with projects including biomass and wind power. On the Japanese side, the Ministry of the Environment revised its procedures in 2025 so that JCM credits are authorised under Japan’s amended Act on Promotion of Global Warming Countermeasures, and updated its procedures for applying corresponding adjustments. Japan has carried out similar updates with other partners in 2026, including Cambodia in March and Costa Rica in August. The Costa Rica revision set out how JCM credits can be authorised as ITMOs and subject to corresponding adjustments.
Signals to watch
- Pipeline turns into tradable ITMOs: With the rules aligned, Vietnamese JCM projects can be authorised with corresponding adjustments and counted towards Japan’s NDC. This makes them some of the most institutionally secure ITMOs in Southeast Asia.
- GX-ETS demand link: JCM credits are eligible for Japan’s GX-ETS, so aligned Vietnamese credits may meet compliance demand from Japanese companies as well as government NDC use. As the GX-ETS moves into its mandatory phase, watch for corporate offtake deals.
- Vietnam’s dual-buyer position: Vietnam also has an Implementation Agreement with Singapore. Clear JCM rules let the government allocate mitigation across buyers. Expect Hanoi to prioritise sectors and set authorisation terms carefully to protect its own NDC.
- Template rollout across partners: Cambodia, Costa Rica and now Vietnam show Japan systematically updating its roughly 30 JCM partnerships. Developers in other JCM countries should expect similar rule changes and prepare for Article 6-grade monitoring, authorisation and reporting.
- Integrity and transparency: Article 6 alignment brings JCM activities under UNFCCC reporting and review through Article 6.2 initial reports and the centralised accounting platform. This raises transparency but also the compliance burden for project participants.
Sources:
- Quantum Commodity Intelligence – Japan, Vietnam formally align JCM agreement with Article 6
- JCM Agency – JCM overview, July 2026
- Ministry of the Environment Japan – JCM procedures press release
- Quantum Commodity Intelligence – Japan, Cambodia update JCM rules
- Carbon Pulse – Costa Rica, Japan revise JCM rules
