ARTICLE 6 BETWEEN SEATS, METHODOLOGIES, AND POLITICS AT COP30

• In Belém, some countries interested in trading nature-based credits attempted to reopen decisions already taken by the Supervisory Body on PACM standards.
• The controversy continues over the proposal by some countries to indefinitely extend the mandate of Supervisory Body members.
• It remains to be decided how the new PACM mechanism will carry out its activities in the absence of funding and, for now, transactions.

Officially, and for the first time since 2016, there are no formal negotiating tables on Article 6 at COP30 — or rather, on its two parts that have always been the most politically sensitive: Article 6.2 (bilateral cooperation on emissions) and Article 6.4 (the new UN mechanism for the trading of credits between countries). As we reported at the conclusion of COP29, all the minimum rules needed to allow the two mechanisms to begin functioning were in fact defined in Azerbaijan.

So, why is Article 6 being discussed at COP30? And how?

The debate is political rather than technical this time. Delegations are called upon to provide their views on reports produced this year regarding the work carried out so far on both tracks. Influencing the overall climate, in what could be one of the countless informal and non-binding exchanges between Parties, are the controversies that arose during the October meeting of the PACM (Paris Agreement Crediting Mechanism) Supervisory Body — the UN Mechanism established in Baku under Article 6.4. On that occasion, in fact, the Supervisory Body was supposed to adopt binding decisions on mandatory monitoring after the end of the credit issuance period for each individual project, on the thresholds within which the risk of reversal could be considered negligible, and on other technical issues related to the minimum permanence of carbon storage. That meeting had been preceded by a call for inputs from stakeholders and observers, which resulted in an unprecedented volume of contributions submitted to the Supervisory Body. In particular, countries heavily linked to the forest economy and commercial actors in the nature-based solutions sector strongly objected to the approach initially proposed by the Supervisory Body, which would have established identical rules for all types of projects as part of the new standard for carbon removals.

The October meeting ended without a decision: the Supervisory Body decided to refer the issue to the Methodology Expert Panel (MEP), aiming to draft specific methodologies for each type of project. This only partially appeased stakeholders in the nature-based credit sector, who feared that overly strict permanence rules could effectively exclude forest credits from the PACM forever.

A tension that reverberated in the rooms of Belém during the first week of negotiations. Costa Rica and Indonesia even proposed reopening the decisions taken by the Supervisory Body in October, concerned about a possible overly zealous technical approach on permanence that, in their view, could severely harm those who have already invested in reforestation and afforestation projects. Canada – sharing the same concerns –  expressed reservations about what had already been adopted but, together with New Zealand, sought to bring the room back to more moderate positions, so as not to completely discredit the Supervisory Body.

The Supervisory Body was unfortunately not put in the best light here in Belém, given the proposal to extend the current two-year term for its 12 full members plus 12 alternates. At COP26, countries had agreed on a rotational system, with Board membership limited to a maximum of two years, to allow space for all perspectives in the multilateral context, preventing the technical-political discussion from being held hostage by entrenched views and interests. Today, it seems that some of the Board’s most influential members are pushing for an undefined extension of this mandate, given the members’ significant influence over the standards that will shape the future of global carbon credit markets.

Numerous voices from the COP and carbon credit community have spoken out against a decision that would effectively reopen the Article 6 package a full three years ahead of the scheduled 2028 date, solely for the overtly commercial and political interests of certain delegations. Among the critical voices is Pedro Martins Barata, former negotiator for Portugal and now Vice President of the Environmental Defense Fund and member of the board of the Integrity Council for the Voluntary Carbon Market, who published a scathing op-ed on LinkedIn.

Discussions on financial resources were also not lacking, another central issue in this final transition phase between the old Clean Development Mechanism (CDM) of the Kyoto Protocol and the new PACM, which is finally ready to launch but lacks its own resources. The PACM, like the entire Supervisory Body, is supposed to fund its coordination and supervisory activities through a portion of the transactions it oversees, which, to date, have not yet begun. To avoid a suspension of activities that would effectively delay the start of the new Mechanism, a “loan” of resources from the now-defunct CDM to the PACM was proposed in Belém, which, once fully operational, could then redirect those resources to the Adaptation Fund.

The texts and related controversies have been postponed to the second week – Paris Article 6 is inevitably an issue to be discussed in the COP-CMA setting, which includes the countries that have ratified the Paris Agreement. Updates will follow.

Article by the Italian Climate Network delegation at COP30 in Belém.

Cover image: photo by Rafa Pereira/COP30