India and Japan have launched the Operational Manual for the India Japan Joint Crediting Mechanism (JCM) to guide joint climate projects in India. The manual sets out how advanced Japanese low carbon technologies will be deployed in India and how the resulting emission cuts will be measured and shared. The move gives practical shape to bilateral carbon trading under Article 6 of the Paris Agreement.
What Is the Joint Crediting Mechanism?
The Joint Crediting Mechanism (JCM) is a bilateral carbon trading system started by Japan under which Japanese investment and technology cut greenhouse gas emissions in a partner country and the resulting credits are shared between the two countries. A carbon credit is a certificate for one tonne of carbon dioxide (or its equivalent) that is avoided, reduced or removed from the atmosphere. In simple words, if a new technology prevents one tonne of pollution, it creates one credit that can be counted toward climate targets.
The JCM operates under Article 6 of the Paris Agreement, which is the 2015 global climate treaty that allows countries to cooperate through international carbon markets to meet their climate pledges. Article 6 sets rules to ensure that an emission cut is counted only once and meets high standards of measurement and verification. Japan first proposed the JCM in 2011 and has since signed JCM partnerships with more than 30 partner countries including Indonesia, the Philippines, Thailand, Vietnam, Mongolia and several countries in Africa and Latin America. India is one of the most recent and economically significant partners to join this network.
India Japan Joint Crediting Mechanism and the New Operational Manual
The India Japan Joint Crediting Mechanism is the bilateral framework under which the two countries will jointly develop emission reduction and removal projects in India using advanced low carbon technologies. India signed the JCM cooperation framework with Japan, making Japan the partner country for this bilateral crediting initiative. The cooperation gained momentum around the India Japan Summit 2026 process, when both sides reaffirmed clean energy and climate finance as central pillars of the relationship.
The new Operational Manual for the India Japan JCM is the working rulebook for this cooperation. It lays down the institutional setup, eligibility rules, approval steps and monitoring requirements for JCM projects in India. The stated goals are to promote advanced low carbon technologies, mobilise climate finance, support technology cooperation and ensure high integrity emission reductions and removals in India.
Low carbon technologies in this context refer to equipment and processes that release far less carbon dioxide than conventional alternatives. Examples include high efficiency solar modules and green hydrogen systems, energy efficient cooling and industrial furnaces, waste to energy plants, and carbon removal activities such as sustainable forestry and carbon capture. Japanese firms bring capital and knowhow, while Indian project developers provide sites and implementation. The emission savings are then quantified and divided between India and Japan as mutually agreed credits that each side can count toward its climate pledge, known as its Nationally Determined Contribution (NDC).
| Element of India Japan JCM | What It Means in Practice |
|---|---|
| Technology cooperation | Japanese low carbon equipment and expertise deployed at Indian factories, cities and energy plants |
| Climate finance mobilisation | Japanese public funds, including the Japan Fund for the JCM, plus private investment to support project costs |
| High integrity credits | Each tonne reduced must be real, additional, measurable and verified to avoid double counting |
| Contribution to NDCs | Shared credits help India meet its emission intensity goal and help Japan meet its national reduction target |
How the JCM Project Cycle Works
The India Japan JCM follows a standard project cycle procedure that is common across Japan’s JCM partnerships. The Joint Committee, comprising officials from both governments, is the top decision making body. It approves methodologies, registers projects and authorises the issuance of credits. A Third Party Entity, which is an independent auditor, validates and verifies the emission savings.
A project moves through five clear stages. First, the project developers prepare a design document using an approved methodology that explains how emissions will be cut compared with a normal baseline. Second, the auditor validates the plan and the Joint Committee registers the project. Third, the project is built and operated while emissions are monitored as per the manual. Fourth, the auditor verifies the actual reductions. Finally, the Joint Committee issues JCM credits and splits them between India and Japan as per their agreement, with corresponding adjustments made so the same tonne is not claimed by both countries.
This step by step check matters for trust. Buyers of carbon credits, whether governments or companies, pay only when they are sure the reduction is genuine. The manual therefore stresses transparency, conservative baselines and regular monitoring. That focus on high integrity is what separates JCM credits from weak credits in the unregulated voluntary market that have faced questions over quality in recent years.
Carbon Credit System in India
India is building its own domestic carbon market alongside international cooperation like the JCM. The central instrument is the Carbon Credit Trading Scheme (CCTS), notified under the Energy Conservation Act, 2001. The Bureau of Energy Efficiency (BEE), established in 2002 under the Ministry of Power and headquartered in New Delhi, administers the scheme. The Central Electricity Regulatory Commission (CERC) acts as the regulator for trading, while the Grid Controller of India maintains the registry.
Under the CCTS, energy intensive industries are given emission intensity targets. Units that beat their targets earn Carbon Credit Certificates. Units that miss their targets must buy certificates. The government launched the Indian Carbon Market Portal to track nearly 490 obligated entities in the initial phase. India has also set a national record for participation in global crediting, with hundreds of Clean Development Mechanism projects registered under the earlier Kyoto Protocol system.
India’s climate pledge provides the backdrop. Under its updated NDC, India aims to reduce the emission intensity of its GDP by 45 percent by 2030 from 2005 levels and to reach net zero by 2070. Net zero means the total greenhouse gases released are balanced by an equal amount removed from the atmosphere. Cooperation mechanisms like the JCM help by bringing finance and technology that make these deep cuts cheaper and faster, especially in hard to decarbonise sectors such as steel, cement, power and cooling.
India Japan Relations and Climate Finance Context
India Japan relations were upgraded to a Special Strategic and Global Partnership in 2014. Japan is one of India’s largest sources of official development assistance and a key partner in infrastructure, clean energy and industrial competitiveness. Flagship cooperation includes the Mumbai Ahmedabad High Speed Rail project, the India Japan Clean Energy Partnership and joint work on supply chain resilience in the Indo Pacific.
Climate finance mobilisation is a core reason for the JCM manual. Climate finance refers to funds from developed countries and private investors that help developing countries cut emissions and adapt to climate change. Developed countries had pledged to mobilise $100 billion per year, a goal that was first met in 2022. For India, which needs massive investment to add renewable capacity, green hydrogen and efficient industry while sustaining growth, predictable bilateral channels matter. The JCM creates such a channel by linking Japanese funds directly to measurable tonnes reduced in India.
The timing is also significant. India’s carbon market architecture took clear shape in 2025 and 2026 with the carbon market portal and detailed CCTS rules. Japan, which has a legally binding target of 46 percent emission reduction by fiscal 2030 from fiscal 2013 levels and net zero by 2050, is actively expanding JCM credit supply to meet its goals. The Operational Manual therefore connects India’s need for technology and finance with Japan’s need for high quality international credits, creating a practical bridge between the two national systems.
Key Takeaways
- India signed the Joint Crediting Mechanism (JCM) framework with Japan, and the new Operational Manual guides joint low carbon projects in India.
- The Joint Crediting Mechanism is a bilateral carbon trading system where emission cuts achieved with Japanese technology and finance are shared as credits between the two countries.
- The JCM operates under Article 6 of the Paris Agreement, which allows international carbon market cooperation with safeguards against double counting.
- The Bureau of Energy Efficiency (BEE), established in 2002 under the Energy Conservation Act, 2001, administers India’s domestic Carbon Credit Trading Scheme.
- India aims to cut emission intensity of GDP by 45 percent by 2030 from 2005 levels and to reach net zero by 2070.
