What exactly are ITMOs?
ITMO stands for “internationally transferred mitigation outcome”, a term that first appeared in Article 6, paragraph 2 of the Paris Agreement in 2015. These units serve as the common denominator for carbon trading under the Paris Agreement, connecting emission reductions directly to national climate targets.
Although ITMOs and carbon credits both represent emission reductions, carbon credits issued by voluntary programs (e.g., Verra or Gold Standard) are not automatically eligible for compliance with nationally determined contributions (NDCs). A credit only becomes an ITMO when the host country authorizes its use for an NDC (or schemes like CORSIA), applies a corresponding adjustment, and records the first international transfer. Without these steps, a credit remains a voluntary offset used mainly for corporate claims. ITMOs, by contrast, are designed for country‑to‑country transactions and integrate into national greenhouse‑gas inventories, giving them compliance-level value.
ITMOs have three core elements:
Mitigation outcomes: Verified emission reductions or removals generated through cooperative approaches, including the UN’s 6.4 mechanism, bilateral crediting agreements, domestic crediting programs, or recognised independent standards.
Authorization: The host country must authorize these mitigation outcomes for a specific use (NDC, CORSIA, or another purpose). Without authorization, the unit cannot be counted as an ITMO and remains a voluntary credit.
First transfer: A mitigation outcome becomes an ITMO only when it is transferred internationally for the first time, triggering a corresponding adjustment by both countries involved.
Understanding ITMOs is essential as Latin American countries sign bilateral agreements—such as Chile–Singapore and Peru–Switzerland—and as buyers like Japan and Singapore look for high-integrity credits. Distinguishing ITMOs from voluntary offsets will enable developers, governments, and buyers to access international finance and meet climate commitments.
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