Navigating Change: Key Developments in COP29, CORSIA Standards, and Carbon Tracking Innovation
Authors: Micaela Passetti , Fundi Maphanga & Lounes Soualah
In this issue of our policy newsletter, we spotlight three critical areas that are driving progress in climate action and carbon markets.
First, we cover two news stories from the past week: ICAO’s recent approval of new standards under CORSIA’s first phase, as well as introducing TRACEcdr—our newly launched tool that provides an interactive view of the monitoring, reporting, and verification landscape for carbon dioxide removal methods. Next we explore COP29 in Baku, where key developments in climate finance, integrity measures, and Article 6 negotiations are anticipated.
News stories from the past week:
The International Civil Aviation Organization has approved four more carbon standards for participation in the Carbon Offsetting and Reduction Scheme for International Aviation – Gold Standard, Verra, Global Carbon Council and Climate Action Reserve. Full ICAO approval for participation in CORSIA had already been granted to two other registries – American Carbon Registry and the Architecture for REDD+ Transactions.
Figure 1: Number of credits eligible under CORSIA’s first phase by Standard
3. New Tool Spotlight: TRACEcdr
Together with LSEs Grantham Research Institute on Climate Change & the Environment , we launched the interactive TRACEcdr tool, which visualises the MRV landscape for carbon dioxide removal methods. Access the tool directly here.
Figure 2: CDR MRV Tool
Key insights
3 Highlights to Expect at COP29 in Baku
1. A New Collective Quantified Goal
Nations are expected to announce increased funding to support developing countries to accelerate the transition to low-carbon economies.
In 2009, developed countries agreed to mobilize USD 100 billion annually by 2020 to support climate action in developing countries. In 2015, under the Paris Agreement, Parties agreed to extend this goal out to 2025 and to set a new finance goal for after 2025. The first Needs Determination Report of the Standing Committee on Finance in 2021 shows nearly USD 6 trillion is needed to implement developing countries’ climate action plans by 2030.
Figure 3: Overview of Needs and Financial Requirements by Type of National Report
2. Article 6 Developments
At COP29, significant advancements are anticipated under Article 6 of the Paris Agreement:
Finalizing Article 6.2 Rules: Significant progress is expected on reporting and accounting guidelines, particularly to prevent double counting in bilateral carbon trades. Discussions may also address updates to authorization rules, including the potential for revocation of authorization for Internationally Transferred Mitigation Outcomes. Notably, Gambia has unilaterally issued a Letter of Authorization allowing either party to terminate the authorization with 24 months' noticE.
Revocations: To assist on risk assessment around revocations, we have developed an LoA Risk Score to evaluate authorization letters and assess transaction risk levels for revocation in the Corresponding Adjustment (CA) process. Read our blog for more insights.
Operationalizing Article 6.4: Rule-setting for the UN-led Article 6.4 mechanism is also on the agenda, with expected approvals of methodologies for carbon removals and diverse project types. Recently, the Article 6.4 Supervisory Body issued a tech-neutral policy for carbon removal (A6.4-SBM014-A06) and a methodology (A6.4-SBM014-A05) for Clean Development Mechanism projects transitioning to the Paris Agreement Crediting Mechanism.
Non-Market Cooperation: Frameworks to support Article 6.8’s non-market approaches—such as technology transfer and capacity-building collaborations—are also expected to advance in Baku.
Safeguards and Quality Standards: Strengthened social and environmental safeguards are a priority, with particular emphasis on high-quality carbon removal credits. The Supervisory Body recently issued a new Sustainable Development Tool to guide these efforts.
International Registries: Discussions will likely center on the Article 6.2 international registry's structure and functions. Some countries advocate for a centralized registry to facilitate access, especially for nations without national registries, while others support decentralization to maintain market flexibility and ensure the differentiation of credit quality.
To explore the latest developments in Article 6.2 and 6.4 and insights on market performance, read our latest policy report.
3. Initiatives focused on strengthening the integrity of climate commitments and carbon markets
Concerns around quality and integrity continue to inhibit participation over the VCM. AlliedOffsets’ dataset of over 32,000 projects estimates that 80% of available credits are low quality (see AlliedOffsets’ Quality and Price Trends in the VCM Report), with the majority being pre-V18. Only a select number of projects meet the highest standards set by leading benchmarks.
Figure 4: Number of Projects Achieving the Highest Categories in Leading Carbon Market Standards
From 2020 to 2024, the volume of credit retirements has fluctuated significantly, with notable reductions in some quarters. For instance, while the market saw strong growth in 2021, a decrease in retirement volumes was observed in several quarters of 2023 and 2024, reflecting changing dynamics in demand.
Unique buyer participation also experienced considerable variation, peaking in Q1 2024 but showing notable declines in other periods. These shifts suggest evolving interest from sectors investing in carbon credits, potentially driven by market adjustments, regulatory influences, and increased scrutiny on credit quality.
Figure 5: Carbon Credit Retirements and Unique Buyer Participation (2020–2024)
To explore more on how Baku can improve integrity and bolster confidence in the VCM visit our last blog article written by Lounes Soualah !