What is needed for national implementation?

International rules govern both Article 6.2 and 6.4, requiring participating parties to make crucial decisions. For Article 6.2, decisions involve approving activities and granting authorisations. Conversely, Article 6.4 places more responsibilities on the supervisory body, leaving certain aspects such as defining eligible activities to the host country’s discretion. Countries should establish national procedures anchored in legal foundations and/or mandates to operationalise Article 6.

For a government to effectively implement Article 6, it remains essential to establish the appropriate governance structures and institutional arrangements. This involves defining roles and responsibilities for key actors, such as national focal points, to carry out their tasks and obligations under Article 6.

The designation of a Designated National Authority (DNA) is a mandatory requirement for Article 6.4, emphasising the integral role this entity plays in facilitating international cooperation. While not mandatory for Article 6.2, appointing an Article 6 focal point is highly recommended and serves as an important initial step in many countries. Although the DNA and Article 6 focal point can be separate entities, their roles often complement each other, enhancing coordination efforts. In countries with ample capacities, the focal point may be a well-established institution, such as a dedicated carbon market office. Conversely, in other nations, a focal point might be an individual supported by an alternate, showcasing the adaptability of this approach to various national contexts.

To effectively implement Article 6, a country needs to establish operational procedures for tasks such as authorisation and reporting, ensuring the smooth functioning and operation of Article 6 activities. This notably involves developing methodologies, standards, and guidelines for cooperation under Article 6, assessing the additionality of Article 6 activities, and establishing processes for authorising emission transfers while implementing safeguards to uphold environmental integrity.

Parties interested in participating in Article 6 activities must diligently track and account for the authorisation, transfer, and use of ITMOs under Article 6.2. Similarly, Parties must record Article 6.4 emission reductions (A6.4ERs) generated under Article 6.4 Mechanism (A6.4M), whether or not they are authorised for international transfer and use. Tracking and recording of carbon credits are conducted using specialised databases known as carbon credit registries. Under Article 6, three separate registries that are responsible for recording transactions, with two exclusively designated for Article 6.2 activities and the third specifically for Article 6.4 activities.

Numerous steps are involved in the process of generating mitigation outcomes and allocating revenue to diverse groups, including activity developers, governments and other (local) stakeholders. The host country government holds the potential to influence or stipulate provisions for many of these stages, with decisions contingent on the strategic objectives for engaging in Article 6. This section explores
considerations related to price generation for ITMOs, the sharing of benefits between host and buyer countries, the sharing of benefits on the national and sub-national level, as well as the fee structure designed to cover administrative fees and opportunity costs.

Clean Development Mechanism (CDM) projects and Programme of Activities (PoAs) have the opportunity transition to the Article 6.4 mechanism, if project proponents have submitted a request before the agreed upon deadline of December 31st 2023. The transition of The Glasgow decision adopted in 2021 mandated the Article 6.4 Supervisory Body to expedite the CDM transition process by prioritising requests of small-scale CDM project activities and PoAs. Small-scale CDM project activities and PoAs represent a dominant share of the African CDM portfolio, and therefore, West African countries should capitalise on this fast-track procedure to ensure the transition of a high share of the CDM A6.4 activities hosted by them.

Authorisation for VCM activities can be granted by Parties under Article 6, a decision shaped by strategic considerations. If a country chooses to incorporate provisions for VCM activities within their national carbon market framework (or the equivalent), then Article 6 rules and requirement must apply as it is the case for any Article 6 authorisation.