Seven years after the Paris rulebook took shape, the machinery for transferring carbon between nations — Letters of Authorization and the Corresponding Adjustments behind them — is barely turning. The largest host nations have approved almost nothing. Prices for authorized, compliance-grade credits are climbing on scarcity. And a great many corporate buyers are scrambling for those scarce, expensive credits to back claims that, under the rules as written, never required a corresponding adjustment in the first place. This is an argument for stepping out of that queue — and for the carbon-neutral claim under ISO 14068-1, made with high-quality non-CA credits, as the honest, standards-aligned route through.
Figures drawn from publicly reported Article 6 pipeline data and market analysis current to mid-2026 (UNFCCC CARP; UNEP pipeline; AlliedOffsets, May 2026). Cited inline below.
The promise of Article 6 was liquidity: a global market in which mitigation flows to where it is cheapest and capital flows to where it is needed. The reality, in mid-2026, is a near-frozen pipeline.
The headline numbers are stark. Of all the legacy CDM activities seeking to transition into the new Paris Agreement Crediting Mechanism, only around 7% have secured the host-country approval they need. The two nations that matter most — China and India, which between them hold roughly 69% of all transition requests — have approved precisely none. And although 128 bilateral agreements have been signed between governments, just five actual transactions have completed, moving a mere 65,000 Internationally Transferred Mitigation Outcomes; more than three-quarters of that came from a single electric-bus project in Bangkok.
This is not, for the most part, incompetence. It is strategy. A Corresponding Adjustment is a sovereign act of self-denial: when a host country authorizes the export of a tonne, it must add that tonne back onto its own national ledger and find the reduction elsewhere to meet its own Nationally Determined Contribution. Authorizing the cheap, easy reductions for export means buying the expensive, hard ones at home. So the rational move — the one China, India, and Brazil are all making in their different ways — is to keep the low-hanging fruit on the domestic books and authorize only the high-cost, hard-to-abate projects that would never be financed otherwise.
The result is a deliberate, structural supply restriction dressed as administrative delay. The infrastructure excuses are real — registries are still being built, interoperability is immature — but they provide convenient cover for a sovereign calculation that will not resolve quickly. Anyone treating the authorized-credit shortage as a temporary processing backlog has misread the situation.
When supply is deliberately constrained and demand is not, price does the rest. The corresponding-adjustment premium is not a market quirk; it is the predictable consequence of a sovereign supply squeeze meeting buyers who believe they must have the asset.
The demand side is loaded with capital. Norway alone has prepared to spend up to $740 million on ITMOs from a handful of partner nations. Host governments are sitting on bilateral pipelines that current analysis values at $144–204 million today, scaling to between $1 billion and $1.26 billion if registries were fully operational. The capital exists. The authorized supply does not. That gap — not project cost — is what sets the price of a CA-backed credit.
Illustrative of the mismatch between committed demand-side capital and authorized supply delivered to date. Bar widths are indicative, not to scale.
A compliance-grade, CA-backed credit therefore commands a significant premium over an otherwise identical credit without the adjustment — the same tonne, from the same project, priced higher purely because a sovereign has agreed to subtract it from its own books. For buyers who genuinely need that property — airlines under CORSIA, governments meeting their NDCs — the premium is unavoidable. For everyone else, it is a cost incurred for a feature they will never use.
This is the question almost no one stops to ask before joining the queue. The requirement for a CA is not universal — it is dictated entirely by what the credit is ultimately used for. On the rules as written, the answer for most corporate buyers is: you don’t.
| End use | CA required? | Why |
|---|---|---|
| NDC achievement | Mandatory | Any ITMO used to help an acquiring country meet its Paris NDC must carry a CA — including credits claimed against national compliance systems. |
| CORSIA & other international compliance (OIMP) | Mandatory | Credits used for international aviation compliance and similar mechanisms legally require a CA, so the unit is not double-counted against a host NDC. |
| Voluntary corporate claims (VCM) | Not mandated | CAs are not legally required under the Paris Agreement for credits used purely for voluntary corporate claims. The premium is optional. |
The logic is clean once stated plainly. The CA is a piece of inter-governmental accounting hygiene: it prevents a host country and an acquiring country both claiming the same mitigation toward their national targets. A voluntary corporate buyer is not claiming toward any nation’s NDC. There is no second government in the transaction for the host’s ledger to collide with. The double-counting the CA prevents is, for a voluntary claim, structurally absent. Paying the compliance-grade premium to acquire a CA for a voluntary claim is paying to solve a problem the buyer does not have.
The bottleneck is real and the premium is steep — but for voluntary actors there is a route that sidesteps both: a carbon-neutral claim under ISO 14068-1, made with high-quality non-CA credits. The key is understanding where a corresponding adjustment is genuinely required, and where the overlap it addresses is merely theoretical.
A corresponding adjustment exists to stop two governments counting the same tonne toward their national targets. That is a country-to-country problem — and it is the case where a CA is genuinely required: credits used toward an acquiring nation’s NDC, or under international compliance like CORSIA. There, the premium is the cost of doing business.
A voluntary carbon-neutral claim under ISO 14068-1 is a different situation. It is a compensation claim — the retired credit counterbalances the entity’s unabated emissions — but it is asserted in the claim layer, not in any national ledger. Without a corresponding adjustment, the tonne never leaves the host country’s NDC, so no second country can claim it: country-to-country double counting cannot even arise. The only overlap that remains is between the entity and the host’s NDC — and, as the next panel shows, that overlap is theoretical, not an actual entry in anyone’s books.
Compliance and NDC use.
“Carbon neutral in line with ISO 14068-1, via BVCM.”
Both rest on high-quality credits. They differ in use: compliance and NDC use require the adjustment; a voluntary neutrality claim does not.
This is where ISO 14068-1 matters. A carbon-neutral claim under the standard is a compensation claim: the credit counterbalances the entity’s residual emissions, and it carries all the credit-quality and accounting obligations that follow. But the standard does not require a corresponding adjustment to make that claim — the adjustment appears only as an example in an informative note (§11.1), there is no double-counting criterion at credit level (§11.2), and the report need only disclose whether or not a CA was applied (§12(t)). The standard plainly contemplates a conformant neutrality claim made without one.
Follow where the tonnes are actually counted. The entity’s GHG Protocol footprint still reports all of its emissions, gross — the credit does not reduce it. The host country’s NDC inventory, compiled top-down, still counts gross. The only place the reduction is attributed to the entity is the carbon-neutral claim itself, a layer alongside the carbon accounts rather than inside them. So the entity-to-host-NDC “overlap” is not a double entry anywhere. Where the project is below national inventory resolution (distributed solar, cookstoves, community biogas) it does not arise at all; where the project is large enough to be visible, the overlap is immaterial — the credit is additional, so the tonne is incremental however many parties report it, and no one’s trajectory to zero is distorted. None of this needs a corresponding adjustment the bottleneck has made scarce and that the voluntary claim never required.
The strategic withholding of corresponding adjustments by the world’s largest carbon hosts is not going to resolve on a timetable that suits buyers. The question is whether you need to wait for it at all.
The honest reading of the Article 6 transition is that the supply of authorized, compliance-grade credits will remain scarce and expensive for as long as it is in sovereign interests to keep it that way — which is to say, for the foreseeable future. If your obligation is CORSIA, or you are acquiring toward a national target, you have no choice but to engage with that market on its terms, pay the premium, and manage the revocation risk with insurance and buffers.
But if you are a company making a voluntary commitment — which describes the overwhelming majority of corporate carbon buyers — you have been handed a queue ticket for a train you were never required to board. The corresponding adjustment solves an inter-governmental accounting problem you do not have. The premium you would pay for it buys exclusivity, not impact. And a carbon-neutral claim under ISO 14068-1, made with high-quality non-CA credits, offers a route that is cheaper, faster, immune to the bottleneck, and — provided the claim is scoped and disclosed honestly — defensible against the greenwashing challenges that have made “carbon neutral” such a fraught label.
The 360° Impact Portfolio is built around this distinction. We help voluntary buyers fund high-quality, independently screened mitigation and make a carbon-neutral claim that the evidence actually supports — scoped to what is true, disclosed on its face, and qualified “carbon neutral in line with ISO 14068-1, via BVCM” — rather than chase a scarce compliance instrument to satisfy a requirement they were never under. The bottleneck is real. For most buyers, it is also avoidable.
The pipeline and market figures cited here — the ~7% approval rate, the China/India position, the five completed transactions and ~65,000 ITMOs, the $740M and $1bn+ revenue projections — are drawn from publicly reported Article 6 data and market analysis current to mid-2026, principally the UNFCCC CARP authorizations database, the UNEP Article 6 pipeline, and AlliedOffsets’ May 2026 market analysis. The end-use requirements for corresponding adjustments reflect the Article 6 rulebook as finalized through COP29 and COP30.
The framing of the corresponding-adjustment requirement, and the reading of how ISO 14068-1 treats a non-CA neutrality claim, is the view of the 360° Impact Portfolio. It is offered as informed analysis and opinion, not legal advice. Carbon-claim regulation is evolving quickly; any organisation finalising a claim should take advice specific to its circumstances and jurisdiction.
We help voluntary buyers fund high-quality, independently screened mitigation and make a carbon-neutral claim under ISO 14068-1 the evidence supports — without the corresponding-adjustment premium they never needed. The 30-minute discovery call is the starting point.