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COP29, held in Baku, Azerbaijan this year, was labelled the first-ever “Finance COP”. The annual climate summit — which drew in over 55,000 participants from all over the world — concluded with a contentious climate finance deal and a pledge to bolster carbon markets. Our Managing Director, Patrick Watene had the privilege of attending, and we’re excited to share our key takeaways from COP29.
COP29 concluded with mixed results. The conference sought to mobilize and align private and public finance to support ambitious climate goals and find agreement on many other critical issues.
COP29 opened strong with climate negotiators approving Article 6.4 of the Paris Agreement on the first day of the summit.
Article 6.2 facilitates country-to-country trade of ITMOs to help nations achieve their Nationally Determined Contributions (NDCs) under the Paris Agreement. This mechanism operates within the Compliance Market, promoting international cooperation and flexibility in meeting climate targets.
Article 6.4 establishes a centralized UN-supervised carbon market for both emissions reductions and carbon removals. These credits are designed with a strong emphasis on high integrity and transparency, ensuring alignment with the Paris Agreement’s goals and serving the Compliance Market. While primarily intended for compliance purposes, Article 6.4 credits can also complement Voluntary Carbon Market (VCM) standards, offering a robust option for buyers seeking high-quality, internationally verified credits in the VCM. Full operationalization expected in 2025.
Non-revocation of ITMOs: Once authorized and transferred, ITMOs cannot be revoked except under clearly defined exceptional circumstances specified in the relevant agreements. This rule enhances stability and builds trust in the international carbon market.
Strengthened focus on digital MRV systems: COP29 emphasized the importance of digital MRV systems to prevent greenwashing and enhance transparency and trust. Advanced technologies, including blockchain, AI, and satellite remote monitoring, are being integrated to meet evolving standards.
Orejen Carbon’s Initiative:
Orejen Carbon has established a strategic partnership with Monsoon Carbon to deploy cutting-edge dMMRV (digital Measurement, Monitoring, Reporting and Verification) solutions. If you are a project owner, we invite you to discuss how these solutions can future-proof your project’s MRV requirements and align with emerging global frameworks.
Patrick Watene, Biochar and Project Delivery Expert, represented Orejen Carbon Monsoon Carbon - our trusted carbon partner - as a panelist at the Malaysian Pavilion. Patrick’s panel, titled “Tech-Powered Carbon Credits: Malaysia’s Pathway to Sustainability,” highlighted cutting-edge advancements in blockchain, AI, and satellite monitoring to scale high-integrity carbon credits and enhance Monitoring, Reporting, and Verification (MRV) processes.
Together, Monsoon and Orejen are collaborating to pioneer advanced digital Measurement, Monitoring, Reporting and Verification (dMMRV) in biogas and biochar projects, to deliver increased transparency and trust in the carbon markets.
The progress in Article 6 negotiations, achieved at COP29, will be crucial for creating functional carbon markets, which are essential for meeting the Paris Agreement´s reduction targets and mobilizing much-needed finance.
Existing Voluntary Carbon Market credits remain outside the immediate scope of Article 6 frameworks but may potentially be able to be converted into compliance credits if they meet the requirements under Article 6.2 and 6.4, such as Corresponding Adjustments (CAs) and robust environmental standards.
Article 6.4 credits complement the Voluntary Carbon Market (VCM) by providing an additional pathway for projects that align with rigorous global standards. These credits may establish a strong benchmark for quality, but the VCM continues to play a vital role, particularly with sustained demand for high-integrity credits.
While Article 6 does not specifically mention renewable energy, its framework accommodates renewable energy projects as part of the broader scope of emissions reductions. We believe this supports their ongoing integration into both compliance and voluntary carbon markets, reinforcing their significance in global climate strategies.
Orejen Carbon believes this evolution presents significant opportunities for project owners and developers to adapt and thrive alongside compliance markets, reinforcing their long-term value and impact.
At COP29 in Baku, Azerbaijan, five key carbon market associations from Malaysia, Indonesia, Singapore, Thailand, and the ASEAN Alliance on Carbon Market (AACM) signed a Memorandum of Collaboration (MoC) to formalize the establishment of the ASEAN Common Carbon Framework (ACCF). This milestone underscores a collective effort to harmonize and advance carbon market mechanisms across ASEAN.
Goals of the ASEAN Common Carbon Framework:
The outcomes of COP29 marked a pivotal step in operationalizing Articles 6.2 and 6.4 of the Paris Agreement, establishing robust frameworks for international carbon credit trading. Under Article 6.2, countries finalized guidelines for national and international registries to track Internationally Transferred Mitigation Outcomes (ITMOs), emphasizing transparency and the prevention of double counting through Corresponding Adjustments (CAs).
As these frameworks evolve, Orejen Carbon is committed to helping carbon project developers navigate and align with emerging global standards, driving progress toward a low-carbon future.
*Disclaimer: The views expressed in this article are Monsoon Carbon's insights and takeaways and are intended for informational purposes only.
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