Overview
- The two governments have moved the Joint Crediting Mechanism from a framework to operational status by adopting a Rule of Implementation that defines how projects will be approved, verified and credited.
- The Rule establishes a bilateral Joint Committee, third-party validation and verification, national registries, and sustainable-development safeguards to track issuance and transfer of credits.
- Under the mechanism, Japanese companies can fund emissions-reduction or removal projects in India, receive independently verified credits, and transfer those credits between the two countries to help meet their climate pledges.
- An independent analysis by Zero Carbon Analytics flagged a potential conflict with fossil-fuel trade, estimating that US LNG resold by Japan to nine Asian countries between 2020 and 2025 produced lifecycle emissions equal to about 17 coal plants, totaling roughly 63.5 billion kg CO2-equivalent from 16.5 billion kg of fuel.
- The pact builds on a memorandum of cooperation signed last year and could speed investment and technology transfer to Indian projects, but policymakers will need to reconcile carbon-crediting plans with regional LNG trade that may raise emissions and dependence on fossil fuels.