akar.earthThe Article 6.4 Paris Agreement Crediting Mechanism
How the Article 6.4 mechanism (PACM) works: Supervisory Body, host approval, A6.4ERs, share of proceeds, OMGE, CDM transition and what it means for Indonesia.
The Article 6.4 mechanism, now called the Paris Agreement Crediting Mechanism (PACM), is a UN-supervised carbon crediting system. A Supervisory Body approves methodologies and registers activities, host countries approve each activity, independent auditors validate and verify, and the mechanism issues Article 6.4 emission reductions (A6.4ERs), with a share going to adaptation and a portion cancelled for overall mitigation.
It differs from Article 6.2, where countries design their own bilateral approaches. Under 6.4 the rules, methodologies and registry are centralised. For Indonesian developers, 6.4 is a possible route to compliance-grade units, but its land-sector methodologies are still developing.
How the mechanism works
- Host country designates a national authority and sets out which activity types it will approve.
- Developer prepares the activity using a mechanism-approved methodology and the sustainable development tool.
- Host country approves participation, and decides whether to authorise units for international use.
- A designated operational entity validates the activity.
- The Supervisory Body registers the activity.
- Monitoring and verification follow, by an accredited entity.
- Issuance of A6.4ERs into the mechanism registry, minus the share of proceeds for adaptation and the cancellation for overall mitigation.
- Transfer and use, with corresponding adjustments for authorised units.
Key features
| Feature | What it means |
|---|---|
| Supervisory Body | UN body that adopts standards, approves methodologies and registers activities |
| Host approval | Required for every activity; separate from authorisation for international use |
| Authorised A6.4ERs | Can be used for NDCs or other international purposes; trigger corresponding adjustments |
| Mitigation contribution units | Not authorised; count towards the host’s NDC; suited to results-based finance and contribution claims |
| Share of proceeds | Portion of units and fees directed to the Adaptation Fund and administration |
| OMGE | Mandatory cancellation of a portion of units so the mechanism delivers a net global benefit |
| Removals standard | Rules for removal activities, including monitoring and reversal remediation |
| CDM transition | Some Clean Development Mechanism activities could move to the new mechanism with host approval |
Removals and land-use activities
The Supervisory Body adopted standards on methodology requirements and on removal activities, and the parties endorsed them at the 2024 UN climate conference. The removals standard covers monitoring, reporting, accounting for reversals and avoidance of leakage. Methodologies under the mechanism have started to be approved, including replacements for older CDM methodologies, but forest-specific methodologies are fewer and slower to arrive. Check the mechanism’s methodology list before planning an ARR or REDD+ activity under 6.4.
Some voluntary standards are aligning their methodologies with 6.4 requirements. For example, Gold Standard has worked on aligning methodologies with the mechanism, including replacing a CDM landfill gas methodology with a PACM version. This alignment can matter for buyers who want units that track UN rules.
Indonesia context (check current rules)
Indonesia lists Article 6 schemes among its carbon economic value instruments under Perpres 110/2025. Host approval and authorisation for 6.4 activities will depend on national procedures and on how Indonesia manages its own NDC and FOLU Net Sink 2030 targets. Public detail on Indonesian procedures for 6.4 was limited in the sources we reviewed, so confirm requirements with the responsible ministry before you commit.
When 6.4 makes sense
- Your buyers need UN-issued units for compliance or sovereign use.
- An approved methodology fits your activity.
- The host government supports the activity and its authorisation.
- You can carry the time and cost of a newer, more formal process.
For many forest projects, established voluntary standards with Article 6 labelling under 6.2 may be faster in the near term. See Article 6.2 vs 6.4.
Effect of deductions on volume
Developers sometimes forecast 6.4 volumes as if every verified tonne becomes a saleable unit. Under the mechanism, several deductions apply before units reach the developer’s account: the share of proceeds for adaptation, the cancellation for overall mitigation in global emissions, and, for removals, contributions or arrangements for reversal risk set by the removals standard. On top of these sit the usual methodology deductions for uncertainty and leakage. Model each one explicitly, using the current rules published by the UNFCCC, before you build a business case or sign an offtake.
Fees also differ from voluntary standards. Registration, issuance and other charges are set by the mechanism’s decisions; check the current schedule rather than relying on earlier figures.
Common mistakes
- Confusing host approval of an activity with authorisation of units for international use.
- Assuming CDM-era forest projects transitioned automatically.
- Ignoring the share of proceeds and OMGE when forecasting saleable volume.
- Planning on a 6.4 methodology that has not yet been approved.
See the Article 6 hub, compliance vs voluntary markets, or our carbon strategy service.
Frequently asked questions
What is the Article 6.4 mechanism?
It is the Paris Agreement Crediting Mechanism, a UN-supervised system that registers mitigation activities, approves methodologies and issues Article 6.4 emission reductions (A6.4ERs). It is often seen as the successor to the Kyoto Protocol's Clean Development Mechanism.
What is an A6.4ER?
A unit issued by the mechanism for one tonne of CO2e reduced or removed. If the host country authorises it for international use, a corresponding adjustment applies. Units not authorised are often called mitigation contribution units.
Does Article 6.4 take a share of credits?
Yes. A share of proceeds goes to the Adaptation Fund, and a portion of units is cancelled for overall mitigation in global emissions (OMGE). Check the current rules on the UNFCCC website for exact percentages and fees.
Can forest projects use Article 6.4?
Removal activities are covered by a dedicated standard adopted by the Supervisory Body, with requirements on reversals. Methodologies for land-based activities are still being developed, so check the mechanism's approved methodology list.