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Environment & Ecology June 11, 2026 6 min read Daily brief · #16 of 26

First UN carbon credits under Paris Agreement face scrutiny over Myanmar junta links

The first carbon credits ever issued under the Paris Agreement's Article 6.4 mechanism — from a cookstove distribution project in Myanmar — are facing intens...

GS3 (Environment Climate Change) GS2 (International Relations)

What Happened

  • The first carbon credits ever issued under the Paris Agreement's Article 6.4 mechanism — from a cookstove distribution project in Myanmar — are facing intense scrutiny over their integrity and governance.
  • A report released on June 11, 2026 by civil society groups found that the project operates through Myanmar's Ministry of Natural Resources and Environmental Conservation (MONREC), which has been under military administration since the February 2021 coup.
  • The project was implemented in the Sagaing Region — one of the most conflict-affected areas of Myanmar, with documented airstrikes and mass civilian displacement.
  • Independent analyses found the project's emissions reduction claims may be overstated by a factor of seven or more; auditors were unable to conduct physical site visits due to security risks and relied on remote interviews.
  • The UN's Article 6.4 Supervisory Body reduced the credit issuance by 40% from earlier CDM estimates, but civil society groups contend the remaining volume remains significantly inflated.
  • Groups including the Myanmar Policy Institute, Global Forest Coalition, and South Korean organisation Plan 1.5 are calling for an independent investigation and suspension of further credit issuance, transfers, and usage.

Static Topic Bridges

Paris Agreement Article 6.4 — The New International Carbon Market

Article 6.4 of the Paris Agreement establishes the Paris Agreement Crediting Mechanism (PACM), a centralised, UN-supervised international carbon market. It replaces and upgrades the Kyoto Protocol's Clean Development Mechanism (CDM), which operated from 2001 to 2020. Under PACM, emission reduction activities in host countries generate tradable credits (PACM Emission Reductions, or PACM ERs) that can be used by other countries to meet their NDCs or by private actors in voluntary carbon markets.

  • Adopted as part of the Paris Agreement (COP21, 2015); Article 6.4 rules operationalised at COP26 (Glasgow, 2021) and refined at subsequent COPs.
  • Supervised by the Article 6.4 Supervisory Body — 12 members from Paris Agreement parties; reports to the CMA (Conference of the Parties serving as the Meeting of the Parties to the Paris Agreement).
  • Key improvements over CDM: mandatory Corresponding Adjustments (to prevent double-counting by both host and buyer countries); more stringent additionality and permanence requirements; explicit human rights safeguards.
  • CDM (Kyoto Protocol, Article 12): allowed developed countries (Annex I) to fund emission reductions in developing countries; generated ~2 billion credits (CERs) before winding down.
  • First PACM credits issued: February 2026, Myanmar cookstove project; 58,428 mtCO2e (approximately 40% fewer than CDM provisional figure for the same activity).

Connection to this news: The Myanmar project is a test case for Article 6.4's credibility — the "high-integrity" label of the new mechanism is precisely what is being contested, making this the most consequential early scrutiny of the PACM.

Carbon Market Integrity — Additionality, Permanence, and Over-Crediting

For a carbon credit to represent a genuine climate benefit, it must meet core quality criteria. "Additionality" means the emission reduction would not have occurred without the carbon finance. "Permanence" means the reduction is lasting, not reversed. "Over-crediting" occurs when the methodology overestimates actual reductions — generating credits that do not correspond to real atmospheric outcomes.

  • Carbon Market Watch estimate: Myanmar project over-credited by a factor of ~7 even after the UN's 40% reduction; previous assessment found potential over-crediting by more than 14 times under the earlier CDM framework.
  • Cookstove projects are particularly prone to over-crediting because: (i) baseline fuel use is estimated rather than metered; (ii) stove usage rates are self-reported; (iii) field verification in conflict zones is impractical.
  • Article 6.4 rules require "robust, conservative and credible" baselines and third-party verification — mechanisms whose effectiveness is now in question.
  • Gold Standard and Verra (Verified Carbon Standard) are the two major private voluntary carbon market standards; their own cookstove methodologies have also been criticised for over-crediting.

Connection to this news: The Myanmar case illustrates that structural methodological vulnerabilities in cookstove project accounting persist in the PACM framework, despite its design as a more rigorous successor to the CDM.

Article 6 of the Paris Agreement — Three Pathways

Article 6 as a whole provides three distinct cooperative approaches for countries to achieve their NDCs through international carbon markets and non-market mechanisms:

  • Article 6.2 — Bilateral Cooperative Approaches: Countries use "internationally transferred mitigation outcomes" (ITMOs) through bilateral agreements; subject to Corresponding Adjustments; example: Switzerland-Ghana bilateral carbon deal.
  • Article 6.4 — Centralised UN Mechanism (PACM): Projects registered under UN supervision; credits usable by governments or private sector; successor to CDM; first credits issued February 2026.
  • Article 6.8 — Non-Market Approaches: Cooperation that does not involve credit transfers — technology transfer, capacity building, finance; governed by a Framework for Non-Market Approaches (FNMA).
  • Corresponding Adjustment: when a country sells ITMOs/PACM ERs to another country, it must subtract ("adjust") those reductions from its own NDC accounting to prevent double-counting; key innovation of Paris Agreement over Kyoto Protocol.
  • India's position: India is cautious on Article 6.2 bilateral markets; has participated in discussions on technology transfer under Article 6.8.

Connection to this news: The Myanmar project's scrutiny tests both the Article 6.4 mechanism's safeguards and the broader credibility of the UN's new carbon market architecture ahead of COP31, where Article 6 rules remain under active negotiation.

Myanmar Political Context — Relevance to Carbon Governance

Following the February 2021 military coup, Myanmar's civilian government was replaced by the State Administration Council (SAC) — internationally unrecognised by most Western states and subject to targeted sanctions by the EU, US, and UK. MONREC's involvement in the carbon project brought it under sanctions-related scrutiny; the former MONREC head was listed on the EU sanctions list in June 2021.

  • Myanmar coup: February 1, 2021; SAC took power; Aung San Suu Kyi detained.
  • Sagaing Region: major site of civil resistance and military counter-operations, including documented airstrikes on civilian areas post-2021.
  • EU, US, UK sanctions on Myanmar military: targeted individuals and entities; MONREC leadership listed.
  • Article 6.4 framework does not have an explicit provision banning projects in sanctioned countries or conflict zones — a governance gap highlighted by the Myanmar case.
  • ICC investigation: the junta faces allegations of crimes against humanity related to the Rohingya community under an existing ICC process.

Connection to this news: The governance gap — absence of conflict-zone exclusions in the Article 6.4 framework — is the structural issue underlying the Myanmar controversy, and will likely drive calls for rule amendments at COP31.

Key Facts & Data

  • Article 6.4 first credits issued: February 2026 (Myanmar cookstove project)
  • Credits issued: 58,428 mtCO2e (Paris Agreement Crediting Mechanism Emission Reductions)
  • UN reduction from CDM provisional figure: 40%
  • Carbon Market Watch estimated remaining over-crediting: factor of ~7
  • Earlier CDM-era analysis: potential over-crediting by more than 14 times
  • CDM operated under: Kyoto Protocol, Article 12 (2001–2020); generated ~2 billion CERs
  • Article 6.4 Supervisory Body: 12 members; reports to CMA (Paris Agreement governing body)
  • Myanmar coup date: February 1, 2021
  • MONREC listed on EU sanctions: June 2021
  • Report released: June 11, 2026 — "Carbon Credits Under Fire" — Myanmar Policy Institute, Global Forest Coalition, Plan 1.5
On this page
  1. What Happened
  2. Static Topic Bridges
  3. Paris Agreement Article 6.4 — The New International Carbon Market
  4. Carbon Market Integrity — Additionality, Permanence, and Over-Crediting
  5. Article 6 of the Paris Agreement — Three Pathways
  6. Myanmar Political Context — Relevance to Carbon Governance
  7. Key Facts & Data
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