COP30 negotiations on carbon markets
© Lambert Schneider
Over the past 20 years, carbon crediting has been plagued by concerns over integrity. Various studies showed that a large share of carbon credits is not backed by actual emission reductions. In the light of these experiences, the Chair and Vice-Chair of the Supervisory Body of the Article 6.4 Paris Agreement Crediting Mechanism (PACM) announced that they aim to avoid repeating past mistakes by establishing a more ambitious framework that is aligned with the Paris Agreement.
Over the past year, the Supervisory Body has adopted important standards, including on additionality, baselines, leakage, non-permanence, suppressed demand and environmental and social safeguards. It also approved its first methodology for landfill gas projects. These regulatory documents include novel approaches, such as downward adjustments to baselines and a systematic consideration of uncertainty, and thereby deviate from the current practice in the carbon market.
This new approach passed its first test at COP30. Prior to the conference, a group of organisations, comprising mostly carbon market industry stakeholders, called for the standards to be opened up. Similarly, over the past year, many industry stakeholders called for lowering the proposed standards and effectively continuing the current practice in the carbon market. There was, however, broad consensus among Parties not to change course. As Mbaye Diagne, lead negotiator for the African Group put it: lowering integrity is not a solution to making projects viable. Rather, buyers should pay the true costs of actual mitigation.
The decision on Article 6.4 appreciates the work delivered by the Supervisory Body and provides further guidance, in particular for enhancing integrity, transparency, accountability and inclusivity. This includes that standards, methodologies and tools should be based on best available science and informed by robust evidence, that the transparency of the decision-making by the Supervisory Body and its Methodological Expert Panel should be enhanced, and that stakeholder consultation should be strengthened, including for those that cannot easily participate, such as Indigenous Peoples and local communities.
Integrity and transparency were also key topics in the Article 6.2 room. A key concern is that the first technical expert reviews of Parties’ cooperative approaches identified many inconsistencies with the Article 6.2 requirements. In some instances, important requirements regarding the environmental integrity of the cooperative approaches were not sufficiently addressed. In other instances, even basic requirements, such as specifying which accounting method is used, have not been fulfilled. Parties decided to conduct an informal interactive dialogue at the next COP to identify recurring themes and lessons learned. Parties also discussed in a dialogue how ambition can be ensured in cooperative approaches. Among many issues discussed, a recurring theme was whether and how cooperative approaches effectively enhance ambition, rather than just using carbon credits as a flexibility mechanism to lower the costs of implementation.
Lastly, an important decision was the closure of the CDM and the registry infrastructure under the Kyoto Protocol. After many years of stalled negotiations, COP30 decided on a phase down of the CDM over the next years. This decision also allowed a transfer of remaining funds to the PACM to enable its operation over the next two years.
Dr Lambert Schneider works in Oeko-Institut’s Energy and Climate Division in Berlin and has taken part in international climate negotiations for many years. He is Research Coordinator for International Climate Policy.
Further information
Study ‘The COP30 Climate Change Conference’
Factsheet ‘The COP30 Climate Change Conference’
Policy Brief „The EU's 2040 climate target – Assessment of the proposal by the EU Council“ (update 7.11.2025)
Policy Brief „The EU's 2040 climate target – Assessment of the proposal by the EU Commission“ (2.7.2025)
Policy brief: Conditions for Using International Carbon Credits towards the EU's 2040 Climate Target
Blog “Issues to watch out for at COP30 in Belèm”, 29 October 2025
