What is Joint Crediting Mechanism and how Japan plans to bankroll part of India's decarbonisation
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Japan PM Sanae Takaichi Photograph: (Instagram)
The India-Japan Joint Crediting Mechanism (JCM) will channel Japanese climate finance, technology and viability gap funding into India's decarbonisation. The framework enables verified carbon credit sharing while preventing double counting through strict accounting rules
India and Japan formally adopted the Rules of Implementation for the Joint Crediting Mechanism (JCM) in June this year. The JCM is a bilateral carbon-credit framework established under Article 6.2 of the Paris Agreement. This allows countries to cooperate in achieving their climate targets through the transfer of verified emission reductions. India and Japan signed a Memorandum of Cooperation on the mechanism in 2025, laying the foundation for joint climate projects and it became operational earlier this month.
What is the Joint Crediting Mechanism (JCM)?
Under the JCM, Japanese investment and technology can support low-carbon projects in India, such as renewable energy, energy efficiency, industrial decarbonisation and other greenhouse-gas reduction initiatives. The resulting emission reductions are measured, verified by independent third parties and converted into carbon credits that can be shared between the two countries.
The newly adopted rules establish a Joint Committee with representatives from both governments, transparent project approval procedures, sustainability safeguards and national registries to track the issuance and transfer of credits. The mechanism is expected to boost climate finance, technology transfer and capacity-building while helping both India and Japan meet their Nationally Determined Contributions under the Paris Agreement.
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How Japan plans to bankroll part of India's decarbonisation
Japan is supporting India's decarbonisation by combining financial assistance with advanced low-carbon technology under the Joint Crediting Mechanism (JCM). Under this, Japanese public institutions and private companies provide viability gap funding, helping bridge the high upfront costs of green infrastructure projects. Alongside funding, Japan will facilitate the transfer of advanced decarbonisation technologies and technical expertise to help reduce emissions in hard-to-abate industries. The mechanism also ensures robust carbon accounting. Emission reductions from approved projects are independently verified and converted into Internationally Transferred Mitigation Outcomes (ITMOs), which are shared between India and Japan under Article 6.2 of the Paris Agreement. To preserve the integrity of both countries' climate commitments, synchronised national registries apply corresponding adjustments, preventing double counting of carbon credits and ensuring India's Nationally Determined Contributions remain protected.
