COP30: Key Outcomes for Carbon Markets

The Conference of the Parties, the decision-making body responsible for monitoring and reviewing the implementation of the United Nations Framework Convention on Climate Change, recently convened COP30, the 30th session of the UN Climate Change Conference, in Belém, Brazil. The meeting produced a “mutirão” (collective effort) decision package that moved forward on both the technical and political components of carbon markets and advanced rules for carbon removal.

PROGRESS IN ARTICLE 6 MECHANISMS

There are two primary mechanisms under Article 6 of the Paris Agreement:

• Article 6.2 (Cooperative Approaches): Under Article 6.2, COP30 reached further technical guidance regarding “initial reports” and review processes for cooperative approaches, clarifying how internationally transferred mitigation outcomes should be reported and checked.
• Article 6.4 (Paris Agreement Crediting Mechanism): For Article 6.4, COP30 operationalized the Paris Agreement Crediting Mechanism by adopting essential standards on baselines, additionality, leakage, suppressed demand, and non‑permanence/reversals, with progress on methodologies for landfill gas flaring and utilization.

PARIS AGREEMENT CREDITING MECHANISM

As we discuss in our earlier publication on the previous COP, Article 6.4 made headlines out of COP29 held in Baku, Azerbaijan, which effectively established the UN-managed carbon crediting mechanism known as the Paris Agreement Crediting Mechanism, or PACM.

Explained in simple terms, the PACM is a high-integrity global carbon market that will allow a participant (which can be a state or a company) in one country to reduce emissions, have these emission reductions credited as Article 6.4 emission reduction units (referred to as A6.4ERs), and trade them internationally to a participant in another country.

The Article 6.4 Mechanism Registry is a specific type of registry created under the Paris Agreement. It records the emission reductions and removals (A6.4ERs) generated by activities approved under the PACM.

COP30 adopted some fundamental technical standards and decisive steps toward the PACM market launch, in particular:

• Endorsement of the “foundational standards” adopted by the Article 6.4 Supervisory Body under Article 6.4 for the methodologies covering baseline setting, additionality, leakage, suppressed demand, and non‑permanence and reversals; the Article 6.4 Supervisory Body is the UN body established under the Paris Agreement that develops the rules for, supervises, and oversees the operation of the PACM, including authorizing issuance of A6.4ERs
• Acknowledgement of the first PACM methodology, A6.4‑AMM‑001 on flaring or use of landfill gas, enabling registration of landfill gas projects
• Approval of the transfer of around $26.8 million from the CDM Trust Fund to the Article 6.4 Mechanism Trust Fund (with the prospect of additional amounts) to help fund the establishment/operation of the new mechanism; the CDM Trust Fund has been previously established by the UN as a dedicated financial fund for the UN Clean Development Mechanism under the Kyoto Protocol
• Requesting the Article 6.4 Supervisory Body to significantly increase, up to $5 million, the amount allocated to capacity-building activities

For project developers and host countries, COP30’s decisions provide increased certainty for planning Article 6.2 deals and PACM‑eligible activities, with clearer requirements for reporting, methodologies, and treatment of long‑lived storage.

CARBON REMOVALS

Within the PACM, carbon removals are now confirmed as eligible mitigation outcomes, covering both land‑based and engineered activities. 

The COP30 decisions allow removal projects to proceed under Article 6.4 once methodologies are in place and support work on long‑lived storage, e.g., geological storage and durable carbon dioxide removal as well as nature‑based removals.  

This positions removals as a growing part of carbon market architecture rather than a niche add‑on. Detailed rules on permanence, long‑term monitoring obligations, buffers, and how removals count toward a country’s Nationally Determined Contributions (NDCs) under the Paris Agreement will continue to be refined through Supervisory Body work and future CMA decisions.

THE EU CLIMATE TARGET AND CARBON MARKETS

In line with submitting its NDCs for COP30, the EU member states agreed on a legally binding headline 2040 target of 90%.

The interplay between the EU 2040 climate target and the COP30 outcomes for carbon markets is notable:

• The 2040 EU climate target is flexible across sectors (despite “2040 climate targets” plural being used in the past there are no separate targets for specific sectors) and foresees further flexibilities. One of the flexibility mechanisms is allowing high-quality international carbon credits under Article 6 of Paris Agreement starting from 2036. It allows a contribution of international credits toward the 2040 target for up to 3% of the net EU emissions in 1990.[1]
• The EU Emission Trading System (ETS) is a “cap and trade” system that puts a limit on overall emissions and allows companies to buy, sell, or trade allowances to cover what they emit each year. The European Commission is currently working on the next phase of the EU ETS and as part of that process invited inputs on how links between the EU ETS and other international carbon markets could be established. Whether and how international carbon credits would be channeled through the EU ETS is yet to be decided.
• The Commission has also launched a public consultation on legislation for CO₂ transport, storage, and markets, with the aim of creating a dedicated CO₂ market and infrastructure framework to support large‑scale carbon capture, utilization and storage (CCUS) and deliver the climate goals. The consultation is open until 9 January 2026 and will feed into a legislative proposal planned for Q3 2026. The Commission is effectively considering creating a formal regulated market specifically for CO₂ transport and storage, separate from (but likely connected to) the EU ETS.

Conclusion

COP30 gave carbon markets a clear implementation impulse: the EU’s current climate policy seeks to favor flexibility (e.g. allowance of high-quality international carbon credits under Article 6 of Paris Agreement starting from 2036 as aforementioned) and competitiveness of European industry for which carbon markets can be instrumental.