Article 6.2 ITMOs and Bilateral Deals

Updated 2026-11-02 · 4 min read · By the akar.earth specialist team

Article 6.2 ITMOs explained: how cooperative approaches, authorisation, first transfer and corresponding adjustments work, and what they mean for Indonesia.

Article 6.2 of the Paris Agreement lets countries trade mitigation outcomes through cooperative approaches they design themselves. The traded units are ITMOs (Internationally Transferred Mitigation Outcomes): emission reductions or removals that the host country authorises for international use and then accounts for with a corresponding adjustment, so the same tonne is not counted by two countries.

For Indonesian forest and land projects, Article 6.2 matters because it opens demand from governments and from compliance uses such as CORSIA, which need authorised, adjusted units. It also means the host government must agree before units leave the country’s accounting.

How Article 6.2 works

1. Countries agree a cooperative approach. Often a bilateral agreement or framework, such as Japan’s Joint Crediting Mechanism or the implementation agreements Singapore has signed with partner countries.
2. The host country authorises mitigation outcomes. Authorisation states which outcomes, how many, for which uses, and when the “first transfer” happens. See letters of authorisation.
3. Mitigation outcomes are generated by projects or programmes, often certified under an existing standard or a bilateral methodology.
4. First transfer triggers accounting. The authorising country defines first transfer for uses outside NDCs, for example at authorisation, issuance or use. For transfers between countries, it is the first international transfer.
5. The host country applies a corresponding adjustment in its emissions accounting.
6. The user counts the ITMOs towards its NDC, CORSIA or another international mitigation purpose.
7. Countries report. An initial report, annual information and regular information in their biennial transparency reports, reviewed by an Article 6 technical expert review.

Key terms

Who buys ITMOs

• Governments using ITMOs towards their NDCs, such as Switzerland, Singapore, Japan and others with bilateral programmes.
• Airlines for CORSIA, where eligible units need host country authorisation and corresponding adjustments.
• Companies in some compliance schemes that accept international credits meeting Article 6 rules, such as Singapore’s carbon tax offset allowance for eligible international credits.
• Voluntary buyers who want the strongest claim and are willing to pay for adjusted units.

Research suggests sovereign buyers may pay more for ITMOs meeting their domestic criteria than voluntary buyers pay for non-authorised credits.

Indonesia context (check current rules)

Indonesia lists Article 6 schemes among its carbon economic value instruments under Perpres 110/2025, alongside trading, result-based payment and levies. It has a long-running JCM partnership with Japan and has pursued mutual recognition arrangements with international standards. Detailed public procedures for ITMO authorisation were not fully set out in the sources we reviewed. Treat any statement about Indonesian authorisation timelines, fees or caps as provisional and confirm with the responsible ministry. See corresponding adjustments in Indonesia.

Forest outcomes raise a specific question: Indonesia counts forestry heavily towards its own NDC and FOLU Net Sink 2030 target. Each tonne transferred abroad must be replaced by other mitigation at home, so the government may be selective about authorising forestry ITMOs.

What a project developer should prepare

If you want your project to supply ITMOs, prepare for questions that a normal voluntary sale does not raise:

1. Which cooperative approach? Identify the bilateral framework or buyer programme your units would fall under.
2. Does the host support this activity type? Governments often prioritise sectors where they do not need the reductions for their own NDC.
3. Are your methodology and standard accepted by the buying country or scheme?
4. Can you deliver the data the host needs for its Article 6 reporting, on its timeline?
5. How will benefit sharing and any share of proceeds affect your volumes and revenue?
6. What happens to vintages issued before authorisation? They may need to be sold as non-authorised units.

Projects that answer these early are better placed when a bilateral programme opens a call or a buyer issues a tender.

Common mistakes

• Selling credits as “Article 6 compliant” before authorisation exists.
• Assuming a standard’s registry label equals a corresponding adjustment.
• Ignoring the gap between a bilateral agreement and project-level authorisation.
• Forgetting that ITMO deals need the host’s reporting to be complete before buyers can rely on them.
• Treating 6.2 rules as fixed; guidance continues to evolve at each UN climate conference.

Compare mechanisms in Article 6.2 vs 6.4, see the Article 6 hub, or ask us about regulatory navigation.