Canada proposes new framework to let companies trade international carbon credits

CANADA, 26 SEPTEMBER 2026 —

Canada’s government will develop a policy framework allowing domestic companies to trade internationally transferred mitigation outcomes (ITMOs) under Article 6 of the Paris Agreement, potentially unlocking billions in economic value and accelerating climate technologies.

The move follows last November’s COP29 agreement that established rules for cross-border carbon credit trading. Canada’s proposed framework will require ITMOs to meet Article 6’s environmental integrity standards—ensuring emissions reductions are real, additional, verified, and permanent—while providing investors with the certainty needed to scale carbon markets.

Research cited by the government shows a scaled-up carbon removal industry in Canada could generate billions in GDP growth and create hundreds of thousands of jobs. The country’s industrial capabilities, clean energy resources, and strong policy foundation position it as a potential leader in high-quality carbon removal technologies.

“This is about turning our natural advantages and homegrown climate innovation into investment, good jobs, and new export opportunities,” the government statement said. “A clear framework for international carbon credit transfers can help Canadian companies scale, attract capital, and bring more innovative technologies to market.”

The policy aligns with Canada’s existing climate targets, though the government has not set a timeline for implementation. Stakeholder consultations are expected to begin shortly, with industry groups like Carbon Removal Canada welcoming the initiative.

“We’ve spent the past year making the case that Canada needs this to compete internationally, and we’re glad to see it move forward,” the advocacy group said. “This is a step we and many others in the sector have been encouraging for some time.”

Canada’s entry into international carbon markets could influence neighboring countries developing their own systems, while reinforcing its position as a North American leader in sustainable finance. The framework will prioritize real-world emission reductions over speculative credits, benefiting sectors such as clean energy, forestry, and industrial decarbonization.

The development underscores the growing importance of global carbon markets in climate finance, though Malaysia’s voluntary carbon market (VCM) and compliance schemes under the Malaysian Carbon Credit Scheme (MCCS) remain smaller in scale. Local firms in renewable energy and sustainable agriculture may explore partnerships with Canadian entities to access new financing opportunities, provided Malaysia’s carbon market aligns with Article 6’s strict accounting rules.

Malaysian policymakers may observe Canada’s approach as a case study in balancing economic incentives with environmental integrity—a consideration that will shape the country’s own carbon market development in the coming years.

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