Publication of Report on the Outcome of the AZEC International Conference to Develop Carbon Market

The AZEC International Conference to Develop Carbon Market (AZEC-DCM) was launched as a platform for policymakers’ dialogue to discuss matters specified in the Action Plan for the Next Decade adopted at the 2nd AZEC Leaders’ Meeting in October 2024. Specifically, the AZEC-DCM addresses enhancing the competitiveness of industries through the visualization of GHG emissions throughout the supply chain and the promotion of high-integrity carbon markets.

MOE and METI jointly organized online conferences in April and June 2026 and an in-person conference in Hiroshima City, Hiroshima Prefecture, Japan in July 2026.

1. Visualization of GHG emissions (including carbon pricing)
   • The report highlights that AZEC partner countries have been steadily advancing GHG accounting and reporting systems, as well as corporate emissions disclosure initiatives. These efforts are strengthening the foundations for measuring and managing emissions across supply chains. Such developments are expected to contribute to enhanced international competitiveness and increased decarbonization investment.
   • The report also notes progress in the development of diverse carbon pricing instruments, including emissions trading system (ETS), carbon taxes, and baseline-and-credit mechanisms, reflecting the different circumstances of partner countries. The importance of promoting decarbonization through the development of carbon markets while encouraging private-sector investment was reaffirmed.
2. Development of high-integrity carbon markets
   • The report highlights progress in carbon market development through domestic crediting mechanisms and cooperation in line with Article 6 of the Paris Agreement, including the Joint Crediting Mechanism (JCM). It further notes that the appropriate design and application of methodologies related to carbon credit generation, including the setting of emission factors, are essential to ensuring conservativeness and environmental integrity. The report also confirms that the development of market infrastructure such as registries and MRV (Monitoring, Reporting and Verification) systems, as well as ensuring the credibility of carbon credits, are critical elements for the further development of carbon markets.
   • Regarding future regional cooperation, the report emphasizes the importance of improving domestic readiness for Article 6 implementation, enhancing interoperability among different systems, and strengthening capacity-building efforts, while taking into account the differing circumstances and stages of development of partner countries. It also recognizes the importance of establishing a predictable and transparent policy environment to facilitate private-sector investment. The report identifies practical and realistic areas for cooperation tailored to partner-country needs, including GHG accounting and reporting, digital MRV, registry systems, Article 6 implementation, and human resource development.

ERIA｜Report on the AZEC International Conference to Develop Carbon Market (AZEC-DCM)
Fourth AZEC International Conference to Develop Carbon Markets | Press Release | Ministry of the Environment, Government of Japan
The 5th AZEC International Conference to Develop Carbon Markets Held in Hiroshima | Press Release | Ministry of the Environment, Government of Japan
Asia Zero Emission Community (AZEC) Leaders’ Joint Statement and its Action Plan for Next Decade