COP30 and Carbon Markets: What to Expect from Belem

While Article 6 of the Paris Agreement was negotiated at COP29, this year's COP30 in Belem, Brazil will be unusual for carbon markets because there are no formal Article 6 negotiations scheduled until 2028. Yet critical unresolved issues remain that will shape the future of carbon markets.

Why does COP matter for Article 6?

Article 6 has long been viewed as the cornerstone for scaling climate finance and enabling countries to collaborate on emissions reductions through carbon markets. It is typically a key focus at climate conferences like the COPs.

It establishes the framework for international carbon trading, including:

• Article 6.2: Decentralized bilateral agreements between countries
• Article 6.4: A centralized mechanism overseen by the United Nations Framework Convention on Climate Change (UNFCCC) AKA the Paris Agreement Crediting Mechanism, or PACM

Beyond these mechanisms, the voluntary carbon market (VCM) continues to play an essential role in channeling investment toward climate change—and helping achieve the Paris Agreement's ambitious temperature goals.

Are Article 6 negotiations happening at COP30?

For the first time since the Paris Agreement (at COP21 in 2015), COP will not feature formal Article 6 negotiations until 2028, which is the next global stocktake.

However, Article 6 will remain firmly on the agenda as countries shift from rule-making to implementation to help avert the climate crisis.

Why is Belem so relevant as the COP30 host?

Located in Latin America at the gateway to the Amazon rainforest, Belem represents both the urgency of protecting natural climate solutions and the challenges facing host countries in engaging with carbon markets.

Brazil itself exemplifies the readiness gap that many nations face. Despite its vast potential for carbon market participation, the country is still in the process of developing its regulatory frameworks needed for full Article 6 implementation. As such, its efforts to tackle climate change lag behind.

What's the significance of the new NDCs?

A wave of new Nationally Determined Contributions (NDCs) has been submitted following the September 25th deadline, setting the tone for COP30.

An NDC synthesis report, expected in late October, will reveal whether the collective ambition expressed in these national climate plans aligns with the Paris Agreement's 1.5°C and 2°C temperature targets. While we don’t have all of the details yet, most experts expect to see a massive gap.

What's important now?

More countries are expressing interest in using Article 6 and carbon markets to achieve and exceed their targets. This signals growing recognition that international cooperation through carbon trading can help bridge the gap between current commitments and what's needed to meet global climate goals.

However, a critical barrier remains: many host countries lack the data infrastructure and technical capacity to engage effectively in Article 6. 

To address this challenge, initiatives like Sylvera's CaDAP, a free data access program for governments in developing countries, are working to level the playing field and enable broader participation.

Article 6.2: How ready are countries for implementation?

Secretariat report and country readiness

The UNFCCC Secretariat will release the first Biennial Transparency Reports (BTRs) synthesis report in late October, providing an initial picture of Paris Agreement implementation and analyzing:

• How countries are establishing authorization and tracking arrangements for Article 6.2 transactions
• Methods for applying Corresponding Adjustments (CAs) - the Article 6 accounting mechanism that prevents double-counting of emissions reductions

What's important now?

While we can expect a wave of new bilateral agreements to be announced at COP30, actual Article 6.2 market activity remains minimal, with only one transaction completed to date.

This gap between ambition and implementation underscores a crucial point: Article 6 readiness is essential for unlocking global carbon markets and the climate finance they can mobilize.

The implications extend beyond bilateral agreements. CORSIA (the international aviation sector's carbon offsetting scheme) relies on the supply of authorized carbon credits, but this supply depends entirely on host countries being ready to issue authorization and apply CAs or on the availability of insurance products.

Building this capacity cannot fall solely on host countries. It's a shared responsibility that requires industry support and collaboration from world leaders, financial institutions, and other major players.

What role will TERs play?

Technical Expert Reviews (TERs) will play an increasingly important role at the COP30 climate summit and beyond. These reviews assess Article 6.2 activities and provide crucial guidance on how key rules should be interpreted in practice, particularly around what constitutes "significant or persistent inconsistencies" with Article 6 requirements.

What's important now?

Article 6.2 sets high-level requirements, and the TERs are the first indication of how those requirements are interpreted and implemented in practice. One contentious issue that TERs will help clarify is whether High Forest Low Deforestation (HFLD) approaches meet the Article 6.2 requirements of establishing a below business-as-usual baseline.

Given the fragmented nature of Article 6.2, project-level quality assessment through third-party assurance becomes essential. Forward-thinking Article 6.2 buyers are already securing this through independent ratings to ensure ITMO (Internationally Transferred Mitigation Outcome) quality and integrity.

Article 6.4: What's the status of the reversals standard?

A more flexible approach to nature-based solutions

COP30 will focus on finalizing remaining technical rules before the Paris Agreement Crediting Mechanism (PACM) officially opens.

In early October 2025, climate leadership at the Supervisory Body Mechanism (SBM) finalized a critical decision on the PACM non-permanence and reversals standard. Their ruling marks a pivotal moment as it will fundamentally shape the role of nature in carbon markets and have cascading effects across the entire ecosystem.

What's important now?

The final text represents significant progress over the initial proposal. After incorporating feedback from countries and stakeholders, the new standard:

• Moves away from blanket rules
• Allows methodologies to define permanence requirements tailored to specific project types
• Makes nature-based solutions more viable within the PACM framework

However, challenges to nature's full participation remain, and the practical implementation will become clearer as methodologies are submitted to the SBM for approval.

The decision places significant responsibility on SBM-approved methodologies to maintain integrity by scientifically justifying their monitoring periods and risk thresholds to effectively manage reversal risks.

Why does this matter beyond Article 6.4?

The reversals standard will directly influence:

• The upcoming Article 6.2 Work Program on permanence and reversals
• The actions of independent carbon standards
• Voluntary market buyer behavior

Keeping nature-based solutions outside the PACM would result in less finance flowing to nature protection and restoration, ultimately leading to reduced climate action.

With the continued proliferation of compliance schemes worldwide, achieving better alignment and integrity across the VCM and compliance markets (including CORSIA and Article 6) is essential. Excluding specific project types from the PACM would be counterproductive, impeding alignment and contributing to market fragmentation.

Why is this so important for quality assessment?

This new framework elevates the importance of ratings and project-level assessments in determining quality and managing risk.

As methodologies gain approval and projects begin generating credits, independent verification will be critical to ensure environmental integrity, as well as a just transition for the indigenous peoples in the local communities in which the carbon projects are based.

CDM transition: What are the quality concerns?

The transition from the Clean Development Mechanism (CDM) to the Article 6.4 mechanism remains incomplete. COP30 will need to decide on:

• A termination date for the CDM
• How to use the remaining Trust Fund resources

This decision has practical implications for financing the PACM infrastructure, as the UNFCCC Secretariat may need to leverage these funds before the new mechanism achieves self-sufficiency.

What's the quality challenge?

As the CDM transitions to the PACM, significant concerns about the environmental integrity of transitioning activities have emerged.

For example, nearly 80% of CDM activities eligible to transition to the PACM that have requested to do so utilize grid-connected renewable energy methodologies. This concentration raises some concerns:

• Major carbon credit registries (Verra and Gold Standard) stopped accepting new grid-connected projects in 2019 (except those in LDCs) as they were generally no longer considered additional
• These methodologies were rejected by the Integrity Council for the Voluntary Carbon Market (ICVCM)
• Serious concerns exist about the environmental integrity of credits expected to be among the first to issue Article 6.4 Emission Reductions (6.4ERs)

Two renewable energy methodologies, ACM0002 and AMS-I.D., account for over 70% of all CDM activities requesting transition to the PACM. The average Sylvera rating for ACM0002 projects is "C," underscoring significant quality concerns for clean energy transition initiatives.

Why is due diligence essential?

The fragmented landscape of eligibility lists and quality initiatives presents a significant hurdle for buyers seeking carbon credits from projects with robust environmental integrity.

While these lists establish eligibility criteria and quality benchmarks through the evaluation of carbon standards and methodologies, this approach is insufficient.

Project-level due diligence is essential to truly ascertain the quality and additionality of emission reductions or removals, as well as a fair transition for vulnerable communities. 

What About Carbon Dioxide Removal (CDR)?

The growing role of removals in climate policy

COP30 will feature the first-ever dedicated CDR pavilion, CDR30, marking a significant milestone in elevating carbon removal on the global climate agenda.

The pavilion aims to facilitate the technical discussions and political negotiations that coordination demands. These conversations will be essential for building coherent frameworks that allow CDR to scale while maintaining integrity across voluntary and compliance markets.

Article 6 mechanisms could provide pathways for CDR projects to generate compliance-grade credits that nearly every country can use toward its NDCs. As governments increasingly acknowledge that achieving NDCs will require removal technologies, CDR projects meeting high integrity standards could become eligible for Article 6 mechanisms.

This would dramatically expand market demand beyond voluntary corporate purchases, creating a potential game-changer for CDR deployment throughout global society.

Just as with nature-based solutions, the technical foundations matter:

• Robust measurement protocols for different removal methods
• Clear standards that ensure permanence and additionality
• Transparent accounting that prevents double-counting between national and international commitments

COP30 is happening as CDR deployment looks to accelerate worldwide, with governments from Sweden to Switzerland launching major policy initiatives to scale carbon removal.

However, avoiding fragmented approaches through incompatible national policies and regulatory frameworks will be important.

What should carbon market players expect from COP30? 

Governments

The focus still remains on Article 6 readiness infrastructure and capacity building. The gap between signing agreements and completing transactions shows that technical systems, authorization processes, and tracking mechanisms need urgent attention.

International cooperation and support will be essential to bridge this divide.

Buyers

Quality assessment remains the focus as carbon markets enter a critical implementation phase. With multiple developments creating complexity - from the CDM transition raising integrity concerns to the flexible reversals standard placing responsibility on individual methodologies - buyers must conduct thorough independent due diligence across all carbon market transactions.

• Secure third-party verification and ratings to ensure credit integrity across voluntary and compliance markets
• Exercise caution with Article 6.4 credits: Transitioning CDM projects and new Article 6.4 activities require heightened scrutiny given quality concerns around legacy methodologies
• Assess Article 6.2 ITMOs carefully: The fragmented, bilateral nature of Article 6.2 makes project-level quality assessment essential
• Recognize quality variation in nature-based solutions: The flexible reversals standard means not all nature-based solution credits will be created equal—methodology rigor matters

Investors

The improved reversals standard creates opportunities for high-quality nature-based solutions, while quality concerns around CDM transition projects create differentiation opportunities.

Strategic considerations:

• Watch for market fragmentation risks versus alignment opportunities as different compliance schemes develop
• Position portfolios to benefit from projects with robust methodologies and strong third-party validation

Carbon Project Developers

Expect increased scrutiny on project quality. Technical Expert Reviews, Supervisory Body assessments, and independent ratings will all play crucial roles.

• For nature-based solution developers: The new reversals standard offers a path forward, but success requires scientifically robust methodologies with well-justified monitoring periods and risk management approaches. That way natural resources are preserved, food security is maintained, and biodiversity is prioritized, even as project development increases.
• For developers transitioning CDM projects: Anticipate heightened due diligence from buyers concerned about additionality and integrity. You must be sure that the projects you develop are good for the environment and the people who live in the area.

Stay in the know ahead of COP30

Follow our dedicated COP30 Hub to keep up to date with all the news relevant to carbon markets, with insights from our team on the ground in Belem.