LatAm’s Article 6.2 momentum builds, but readiness gaps remain
The first half of this quarter has brought a wave of developments shaping how Latam is engaging with cooperative carbon-market mechanisms.
In Paraguay, more than 100 stakeholders gathered on July 17, 2025 to discuss opportunities under Article 6. The event showcased progress on the national carbon market framework established by Law 7190/2023 and emphasised that strengthening the regulatory framework is fundamental to tapping carbon‑market benefits. Officials highlighted that building local capacity through discussion sessions and training is crucial for Paraguay to seize opportunities offered by carbon markets.
Meanwhile, in early July, the Dominican Republic and Sweden signed a bilateral implementation agreement that sets a framework for trading Internationally Transferred Mitigation Outcomes (ITMOs) and allows finance to flow into mitigation activities. Authorities stress that the Caribbean country is prioritising strategic sectors, such as energy and cement, and accelerating readiness to begin ITMO exchanges. Alongside this, the Dominican Republic is developing carbon projects with Chile and the Philippines, aiming to supply credits to a US-led coalition backed by major corporations such as Morgan Stanley, Amazon, Mastercard, and Meta among others.
Peru is also stepping into the spotlight: the country’s climate authority is actively seeking new partners for Article 6.2 deals and refining its bilateral treaty with Singapore while opening consultations with South Korea and Japan. Peru plans to generate ITMOs from sectors outside its current NDC—such as rice farming—and aims to issue its first credits before COP30 through clean cookstove, solar energy and methane‑reduction projects.
This agreement reflects a broader momentum in carbon markets, where activity is accelerating after key rules were formalised at the UN climate conference in Baku last year, enabling countries to adopt ITMOs and integrate them into their national accounting for greenhouse-gas emissions. Major buyers such as Japan and Singapore are active in these agreements, signalling robust demand for high-integrity credits.
Together, these developments indicate that while Latin American countries like Paraguay, the Dominican Republic and Chile are advancing their participation in cooperative carbon markets, overall global readiness remains limited. The latest step came when Chile and Singapore signed an Article 6 Implementation Agreement, signalling deeper trans‑Pacific cooperation and adding to the growing list of bilateral deals. Significant work lies ahead to build robust authorization frameworks, tracking systems and registries that uphold environmental integrity and enable the region to fully leverage Article 6.2.
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