A Body tasked with operationalising the UN carbon market under the Paris Agreement has adopted a new standard on “suppressed demand”, opening the door for more inclusive climate action in regions with limited access to basic services such as water and sanitation.
Formally known as the Article 6.4 Supervisory Body, it is responsible for establishing the rules and infrastructure for the Paris Agreement Crediting Mechanism. This mechanism will allow countries and other actors to cooperate in reducing greenhouse gas emissions by generating high-integrity carbon credits, while also supporting sustainable development.
Supressed demand standard
Suppressed demand refers to situations where people use very little energy or services, not because they don’t need them, but because they can’t afford them or the infrastructure doesn’t exist. The new standard allows climate projects that help meet these basic human needs to earn carbon credits, even if emissions would naturally rise as a result of improved access.
This approach helps ensure that people in low-income communities can benefit from climate finance, by recognising the emissions that would occur if their basic needs were met and supporting projects that meet those needs in the cleanest way possible.
The decision allows suppressed demand to be recognised in mechanism baselines to credit projects that provide essential services. These baselines reflect the expected emissions if communities had normal access to those services and enable fairer crediting for development-focused projects.
“We’ve recognised that baselines can be established with reference to basic human needs where they aren’t being met. This approach allows the mechanism to support real development benefits, particularly in communities where access is currently limited,” said Martin Hession, Chair of the Supervisory Body.
Upcoming work on non-permanence and reversals
Methodological Expert Panel (MEP) has produced recommendations on non-permanence and reversals, for which public comment has just closed. The Supervisory Body is looking forward to the MEP making formal recommendations to the Body, which will be subject to a further consultation period before it is considered by the Body.
“While there is significant work to do, we are committed to securing a non-permanence and reversals standard this year. We expect to adopt a standard at our next meeting in October once we receive the final recommendation from the MEP,” said Martin Hession, Chair of the Supervisory Body. “I know there is significant stakeholder interest in the initial drafts produced by the MEP last month, and there has been strong engagement during the MEP’s initial consultation. Of course, there will be another opportunity to comment on the final recommendation once it has been formulated by the MEP in September.”
Other matters
The Supervisory Body adopted its two-year business and resource allocation plan for 2026-2027, outlining the minimum capacity needed to fully operationalise the mechanism. While early implementation is progressing, revenue generation remains limited at this stage and a significant upfront investment is required to establish essential infrastructure.
To support this, the Body agreed that the Chair and Vice-Chair will lead targeted fundraising efforts, with Parties to the Paris Agreement to be invited to contribute to resource mobilisation.
Next steps
The Supervisory Body will next meet from October 6 to 10, 2025, to continue developing other key elements of the mechanism, including a standard on reversal risk and additional tools and guidelines.
