It’s official. The international community has agreed to establish an international carbon credit market, but now, it must focus on implementation. Starting from today, November 10, and running through until Friday, November 21, 2025, global leaders will gather in Belém, Brazil, for the COP30 talks, dubbed by COP30 President-Designate André Corrêa do Lago as the ‘COP of implementation and adaptation’ and the ‘COP of truth’.
“With the framework for Article 6 carbon markets mostly settled at COP29 in Baku, COP30 shifts focus to implementation,” according to Gilbert + Tobin, a leading legal firm covering the climate talks. “Against this backdrop, there are several mandated agenda items at COP30 in relation to Article 6 relating to environmental integrity and reporting under Article 6.2, standards and methodologies under the Article 6.4 carbon crediting mechanism (known as the Paris Agreement Crediting Mechanism (PACM)), funding for the administration of the PACM, and the transition away from the CDM established under the Kyoto Protocol.”
“Since COP29, the Article 6.4 Supervisory Body has been working to approve the first carbon credit methodologies, with initial project types potentially cleared by mid-2025. The Supervisory Body has also been working on standards for safeguards, including baselines, additionality, and preventing the reversal of carbon removals,” they said. Starting with the formal approval of the first methodology for carbon crediting under Article 6.4, for Landfill Gas, Wood Central understands that the body will now establish the methodologies for agriculture, industry, renewable energy, and global forestry during COP30 talks.
Last year, Wood Central reported that the international carbon mark will have major implications for the future of global forestry, with Damien Walsh, a director of Margules Groome Consulting, revealing that “forest classifications” – and whether planted (or plantation) forests would be included in the market.
How do Carbon Markets Work?
Separate from the offsets trading envisioned under the Paris Agreement, there are two existing types of carbon markets – compliance and voluntary. Compliance markets apply to companies and sectors where emissions cuts are legally mandatory. They operate in the European Union, California, and other countries, including New Zealand.
Rules vary, but they typically require companies to purchase a permit for every tonne of carbon they emit – effectively forcing firms to pay for polluting. The market for compliance emissions was worth more than US$865 billion last year, with the EU accounting for the vast majority of that sum. However, as identified under Article 6, the EU does not allow international offset credits. And whilst some companies, under no legal obligation to cut their emissions, have set voluntary targets, they can partially meet them by buying credits on a voluntary carbon market. In 2021, the voluntary market was valued at about $2 billion.
It remains unclear how various existing carbon markets might be integrated into the UN-run trading scheme, which would also depend on national laws. Some experts fear that voluntary credits sold internationally outside the Paris Agreement could result in two countries counting the same emission cuts toward their targets.
- To learn more about the agenda for COP30 and why the President-Designate, André Corrêa do Lago, is pitching a new megafund for tropical forests as a climate fix, click here for Wood Central’s special feature.
