The United Nations Article 6.4 Supervisory Body (SBM) convened in Bonn, Germany, from October 6 to 10, 2025, for its 18th meeting (SBM018). At the conclusion of the session, the group announced the conditional approval of the Draft Standard Addressing Non-Permanence and Reversals v2.2, subject to modifications that preserve flexibility for the inclusion of nature-based and land-based activities within the mechanism.
Supervisory body & PACM
The SBM of the Article 6.4 mechanism is a panel of technical experts representing Parties to the Paris Agreement, responsible for developing and overseeing the rules, requirements, and procedures needed to operationalize the Paris Agreement Crediting Mechanism (PACM). The Body’s work is supported by two UN-appointed expert panels: the Accreditation Expert Panel (AEP) and the Methodological Expert Panel (MEP), which provide specialized guidance on technical and methodological matters.
The PACM establishes a centralized, UN-supervised carbon market that allows countries and private entities to generate, trade, and use carbon credits consistent with their Nationally Determined Contributions (NDCs). Its primary goal is to ensure a high-integrity, transparent, and credible global carbon market that fosters trust and accountability in international climate cooperation. Formally adopted in November 2024, the mechanism is now transitioning into its operational phase.
Controversy Surrounding the Draft Standard About Non-Permanence and Reversals
Addressing Non-Permanence and Reversals within the PACM has been a core focus of the MEP over its past three sessions. Following its 6th meeting (MEP 006), the panel issued a concept note exploring how removal guidance could apply to emission reduction activities. This effort was followed by the release of the first Draft Standard - Addressing Non-Permanence and Reversals (v01.0) after MEP 007, and subsequently refined into version v02.2 after MEP 008 in early September 2025. The finalized draft was then submitted to the Supervisory Body for review and consideration.
However, the Draft Standard for Addressing Non-Permanence and Reversals v02.2 sparked significant pushback from market participants due to what many viewed as overly rigid requirements. Stakeholders expressed concern that the proposed Post-Crediting Monitoring (PCM) obligations would effectively exclude nature-based and land-based projects from participation in the PACM. Under the draft, monitoring obligations would persist as long as reversal risks existed, potentially resulting in indefinite monitoring periods for such projects.
In response to these stringent provisions, the International Emissions Trading Association (IETA), along with 12 other organizations, issued a joint open letter urging the Supervisory Body to reject the v02.2 draft. Their statement emphasized the need for a more balanced, practicable approach that maintains environmental integrity while ensuring broad inclusivity and feasibility across project types.
Final Decision and Implications
Following a week of deliberations during SBM018, the Supervisory Body approved the Draft Standard on Addressing Non-Permanence and Reversals in Mechanism Methodologies, subject to several technical amendments. The Body also committed to reviewing whether the standard should establish a defined PCM period and/or a threshold percentage for negligible reversal risk. This measured approach effectively preserves the opportunity for nature-based and land-management projects to participate under the mechanism.
Concretely, while all activities with carbon storage components will remain subject to PCM, the duration of monitoring will now be determined at the methodology level, rather than being uniformly prescribed. Importantly, the reference to an “indefinite monitoring period” was removed, reflecting a more flexible and risk-based approach. Under the revised framework, an activity may conclude its PCM if: the risk of reversal is deemed negligible, if all potential future reversals are offset through the cancellation of corresponding Article 6.4 credits, or if a Supervisory Body-approved insurance policy is in place to detect and compensate for future reversals.
Other Decisions
Beyond permanence, the Supervisory Body also adopted a suite of other key revisions aimed at strengthening governance, integrity, and operational alignment within the Article 6.4 mechanism.
First, updated versions of the Article 6.4 Accreditation Standard (v2.0) and Accreditation Procedure (v2.0) were formally adopted, entering into effect on 10 October 2025. Under these revisions, entities accredited to operate under the mechanism must align their management systems by October 2026, with future surveillance assessments to include re-evaluation against the enhanced accreditation criteria.
Second, revisions to the Activity Standard and the Validation & Verification Standard introduce new provisions on baseline setting, leakage, and suppressed demand, alongside greater flexibility linked to the Article 6.4 Sustainable Development Tool. These updates also extend to Programmes of Activities (PoAs), thereby embedding sustainability criteria more deeply into multi-project implementation frameworks and reinforcing alignment with sustainable development objectives.
Finally, the procedures governing the transition of Clean Development Mechanism (CDM) activities into the Article 6.4 mechanism were refined to provide clarity and extended flexibility. The deadline for submitting additional documentation (following host Party approval) was extended to 31 December 2026, and further guidance was added on the treatment of non-renewable biomass and leakage factors, ensuring methodological consistency and robust permanence verification during the transition process.
Next Steps
For the VCM, this outcome represents a highly positive development. While many technical details remain to be determined at the methodology level, the Supervisory Body’s decision effectively avoids prematurely excluding nature-based and land-based projects. Looking ahead, the Supervisory Body is expected to publish the final Standard on Addressing Non-Permanence and Reversals.