As countries ramp up their climate ambitions, international cooperation under Article 6 of the Paris Agreement offers new opportunities. PEEB is now supporting countries in advancing Article 6 projects in the buildings sector by developing methodologies and practical guidance, with targeted technical support to Morocco and other countries. Here are seven things you need to know about carbon markets under Article 6 and buildings.
1) What is the current state of investment in energy-efficient buildings?
In 2023, global investment in energy-efficient buildings dropped to USD 270 billion – just over half of what’s needed annually (USD 522.5 billion) by 2030 to stay on track with the Paris Agreement. The finance gap is real, and it’s growing.
2) How can we close that gap?
One promising avenue is international carbon markets, for example through cooperation under Article 6 of the Paris Agreement. This type of cooperation can help mobilise financing for projects that reduce greenhouse gas emissions, such as energy-efficient buildings, particularly in emerging and developing economies where investment needs are high.
3) What is Article 6, and why is it relevant to climate finance?
Article 6 establishes the framework for international cooperation through both market and non-market mechanisms. Under Article 6, countries can transfer carbon credits from emission reductions to support other countries in meeting their climate targets. Article 6.2 enables bilateral or multilateral agreements to transfer mitigation outcomes, while Article 6.4 creates a centralised UN-supervised crediting mechanism. These tools aim to increase climate ambition, promote sustainable development, and mobilise private sector investment.
4) Why is Article 6 significant for buildings?
With Article 6 rulebooks largely finalised at COP26 and COP27, the focus has shifted to implementation. Countries need practical support to turn policy into action, especially in complex sectors like buildings, where multiple actors, limited funding, and a lack of tailored methodologies have slowed progress. Tapping into the sector’s vast mitigation potential is vital to achieve the 28% reduction required by 2030 for alignment with the Paris Agreement. This initiative comes at a critical moment, offering practical tools to unlock Article 6 opportunities and demonstrate how it can work on the ground.
5) How is PEEB helping countries develop Article 6 projects for buildings?
PEEB is working with countries to scale up climate action on buildings under Article 6.
The technical support focuses on:
- A white paper outlining methodological standards for buildings sector projects under Article 6
- A handbook on how to develop Article 6 projects on buildings, sharing best practices for implementation
- A standard training on how to develop Article 6 projects in the buildings sector
- Tailored training sessions in countries, equipping policymakers, experts, and developers with practical knowledge and context-specific tools
- Support for the development of Article 6 project proposals, including emissions modelling, financing plans, and engagement with potential carbon credit buyers, offering a model for replication in other countries
In 2025, PEEB will work with institutions in Morocco, a frontrunner both in climate action in the buildings sector and in Article 6. The country’s Nationally Determined Contribution (NDC) includes a goal to cut energy use in buildings by 20% by 2030. Morocco is actively preparing to participate in the financial and cooperation mechanisms provided for in Article 6, in full alignment with the National Strategy for Sustainable Development. The support for Morocco will include capacity-building on methodologies, the selection of suitable projects, and the development of such project concepts.
6) What makes Article 6 implementation challenging, and why is additionality so important?
Environmental integrity must be at the core of Article 6 and additionality is key to ensuring it. Projects must demonstrate that their emission reductions would not happen without carbon market support. Upholding this principle is essential to avoid offsetting emissions without global impact. Implementing Article 6 also requires strong MRV systems, regulatory readiness, and complex financial and technical structuring. This initiative directly addresses these challenges to maintain integrity and deliver credible climate action.
7) How can countries and experts get involved in the initiative and stay updated on its progress?
Policymakers, project developers, and stakeholders are invited join the expert meeting taking place on 17 June. This interactive feedback session on the white paper will be essential to ensure the guidance takes into account the latest methodological developments and meets real-world needs for maximum impact. Finally, a user-friendly handbook offering practical support to policy-makers and developers will be created to be presented at COP30 in Belém.
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