Article 6
8 Apr 2025
Article 6 and the future of carbon markets: What organisations need to know
4 Min Reading Time
At ChangeNOW, one of Europe’s largest annual climate innovation summits, Agnès Pannier-Runacher, the French Minister for Ecological Transition, Biodiversity, Forests, the Sea, and Fisheries, introduced a new Charter on the use of high-integrity carbon credits. This Charter represents a major step towards a more transparent and robust international carbon market. Our parent company Schneider Electric joined 16 other major international companies in signing this Charter for Paris-Aligned and High-Integrity Use of Carbon Credits, demonstrating our commitment to the responsible use of carbon credits.
This Charter builds on momentum from the COP29 climate conference in Baku, aiming to strengthen cooperation between countries through mechanisms like carbon credits, which finance concrete emission reduction and CO₂ absorption projects in developing countries.
As climate executives, we often face the question: “Why invest in carbon credits alongside emission reduction efforts?
The answer lies in the urgency of our climate timeline. 2050 is tomorrow.
Atmospheric carbon dioxide levels now exceed 420 parts per million and continue to rise daily[1]. Given the cumulative warming effect of greenhouse gases in our atmosphere, we face a multifaceted challenge: we must reduce current emissions rapidly, prevent future emissions through reduction/avoidance initiatives, and remove historical carbon from the atmosphere. This balanced approach recognises that all aspects – reduction, avoidance, and removal – are essential components of comprehensive climate action. Each plays a distinct and complementary role in our strategy, and we cannot afford to wait – action on all fronts is essential.
Carbon credits demonstrate their strategic value not as an alternative to fundamental business model transformation, but as an essential mechanism that complements our decarbonisation trajectory for immediate and future climate impact. They enable us to neutralise residual emissions with high-quality carbon removal on the path to net-zero, while simultaneously contributing to action beyond our value chain as we implement our internal reduction programmes.
For Schneider Electric, signing this Charter reinforces our commitment to a science-based approach that recognises the urgency of decisive climate action.
High-integrity carbon projects deliver multiple dimensions of value. On the technical side, they adhere to rigorous principles: additionality (ensuring the project wouldn’t happen without carbon finance), permanence (preventing reversal of climate benefits), leakage prevention (avoiding emissions shifts elsewhere), double-counting prevention (ensuring each tonne is claimed once), and independent verification (confirming genuine impact).
But their value extends far beyond carbon accounting. These projects can transform communities through sustainable livelihood creation and environmental justice integration, protect precious biodiversity, enhance climate resilience for vulnerable populations, and help preserve cultural heritage and indigenous knowledge.
EcoAct’s Mangrove Restoration Project in India exemplifies this approach. With over one million mangroves planted on once-degraded coastline, the project creates sustainable employment (with women comprising 90% of plantation workers), removes atmospheric carbon, and builds natural infrastructure against flooding and erosion.
The discussions at COP29 in Azerbaijan made it painfully clear that we face a massive climate financing gap. While developing countries need approximately $1 trillion annually by 2030 for climate action[2], nations only committed to mobilising $300 billion. This shortfall isn’t just a number – it represents crucial climate solutions left unfunded, communities left vulnerable, and emissions continuing unabated.
The Voluntary Carbon Market provides a channel for companies like Schneider Electric to direct climate finance toward high-impact projects. Corporate investments through mechanisms like the Livelihoods Carbon Funds, which Schneider Electric has supported since 2011, help develop and scale innovative climate solutions for the future.
The progress on Article 6 negotiations at COP29 marked an important step forward for the Voluntary Carbon Market. In parallel, the Integrity Council for the Voluntary Carbon Market (ICVCM) has introduced Core Carbon Principles (CCPs) that aim to enhance quality and transparency. While these frameworks continue to develop, they represent meaningful progress toward greater market transparency and integrity.
As a co-founder of ICROA and its current chair, EcoAct has been at the forefront of quality and integrity in the Voluntary Carbon Market since 2008. ICROA has been a leading voice in the market, providing a framework for responsible corporate climate action through integrity in carbon credit use, quality in carbon credit supply, and delivering impact to raise ambition.
Now, as part of Schneider Electric, we support the evolution of high-integrity carbon credits and will continue to select carbon projects based on robust, high-quality criteria. We welcome the development of new frameworks and standards that further strengthen transparency and confidence in carbon markets while maintaining our commitment to environmental integrity and sustainable development.
Looking at the global emissions trajectory needed to limit warming to 1.5°C, it becomes evident that we need a diverse portfolio of climate solutions. The carbon market recognises this reality through two complementary types of credits that address different dimensions of the climate challenge.
Reduction/avoidance credits deliver immediate climate benefits by preventing greenhouse gases from entering the atmosphere in the first place. Think of renewable energy projects replacing coal plants, forest protection initiatives halting deforestation, or improved cookstoves reducing wood consumption in rural communities. These interventions are crucial for bending the emissions curve downward now – every tonne of CO₂ that never enters the atmosphere means decades of warming potential avoided.
Equally important are removal credits, which actively draw carbon dioxide out of the atmosphere. This includes reforestation projects that transform barren landscapes into thriving forests, biochar that locks carbon into soil for centuries, and engineered carbon removal technologies, such as direct air capture and bioenergy with carbon capture and storage. All of which will need to scale significantly to reach both our climate goals and broader planetary objectives. These approaches are essential for addressing both historical emissions and neutralising the unavoidable emissions that will persist even in a low-carbon future.
Nature-based solutions offer unique versatility across this spectrum. Forest protection prevents carbon from being released, while reforestation actively sequesters it from the atmosphere. Beyond their climate benefits, these projects create havens for biodiversity, protect vital water systems, and provide sustainable livelihoods for local communities – as with EcoAct’s Mangroves Project that simultaneously remove carbon while shielding coastal villages from intensifying storms.
By signing this Charter, Schneider Electric is affirming our commitment to:
Addressing climate change demands unprecedented collaboration. This Charter represents an opportunity to align the efforts of corporations, governments, project developers and civil society around a shared commitment to climate action at scale.
By establishing clear principles for the high-integrity use of carbon credits, we can unlock greater private sector investment in climate solutions while ensuring these investments deliver genuine environmental benefits. This collaborative approach recognises that we all share the same ultimate objective: a stable climate and sustainable future for communities worldwide.
At Schneider Electric, we remain committed to both transforming our business model for a low-carbon future and supporting high-integrity carbon projects that drive immediate and future benefits globally. Through this dual approach, we can maximise our contribution to achieving societal net-zero – because in addressing climate change, immediate action at scale is not optional, it’s necessary.
The world needs every solution deployed simultaneously. Together, through collaboration and scientific integrity, we can accelerate the transition to a sustainable, net-zero world.
[1] https://www.climate.gov/news-features/understanding-climate/climate-change-atmospheric-carbon-dioxide#:~:text=Carbon%20dioxide%20concentrations%20are%20rising,in%20just%20a%20few%20hundred.
[2]https://www.lse.ac.uk/granthaminstitute/publication/raising-ambition-and-accelerating-delivery-of-climate-finance/
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