CDM Wind-Down Confirmed by End-2026 — USD 26.8M Transfers to PACM Article 6.4

TrustVal Team  |  21 April 2026

The Clean Development Mechanism — the Kyoto Protocol's flagship carbon offsetting system — enters its final year in 2026, with COP30 confirming full wind-down by December 31, 2026, and transferring USD 26.8 million to operationalize its successor under Article 6.4.

The CDM, established under the Kyoto Protocol, generated over 2 billion Certified Emission Reductions (CERs) since 2001 and mobilized hundreds of billions in climate finance to developing countries. But with the Paris Agreement's Article 6.4 Paris Agreement Crediting Mechanism (PACM) now operational, the CDM's role is definitively ending.

COP30 Decision: CDM Wound Up by End-2026

At COP30 in Belém, Brazil (November 2025), negotiating parties agreed to phase out the CDM entirely by 31 December 2026. Critically, USD 26.8 million from the CDM Trust Fund — accumulated from project registration fees — will be transferred to finance the operationalization of the Paris Agreement Crediting Mechanism (PACM) under Article 6.4 of the Paris Agreement.

For project developers holding legacy CERs, the window for migration or retirement is narrowing rapidly. Those seeking to transition projects to PACM must align with the new methodology framework now under development by the UN Methodological Expert Panel (MEP).

Article 6.4 PACM: Methodologies Under Review

The MEP held its 13th meeting in Bonn, Germany from April 13–17, 2026, reviewing the first official methodologies proposed for PACM. The two central proposals under assessment are: a methodology for grid-connected renewable electricity generation, and a methodology for N₂O abatement in existing nitric acid production lines. Approved methodologies will form the backbone of the new UN-supervised carbon crediting mechanism.

Funding secured at COP30 for PACM operationalization has been described as sufficient to make the mechanism fully functional, marking a turning point from rule-setting to actual credit issuance under the Paris Agreement's compliance architecture.

What This Means for Project Developers

Project developers with CDM-registered activities face three options before the end-2026 deadline: migrate eligible projects to PACM under applicable methodologies; retire CERs in the CDM registry before closure; or transition to VCM standards (Verra, Gold Standard) where projects are not PACM-eligible. TrustVal recommends a project-by-project assessment based on methodology alignment, host country NDC ambition, and PACM registry access.