COP29, held in Baku, made a major breakthrough in global climate action during its opening day. Nearly 200 governments agreed on a framework under Article 6.4 of the Paris Agreement. This deal sets up a UN-led global carbon market, allowing countries and companies to trade carbon credits more efficiently. The goal is to create a stronger demand for carbon credits, especially to fund climate projects in developing nations.
COP29 President Mukhtar Babayev called the agreement a “game-changing tool” to support climate action in less wealthy countries. He also urged all nations to continue working together to make more progress during the summit, noting that:
“By matching buyers and sellers efficiently, such markets could reduce the cost of implementing NDCs [Nationally Determined Contributions] by 250 billion dollars a year.”
A New Era for Carbon Trading
Article 6 of the Paris Agreement outlines how countries can work together to reduce greenhouse gas emissions. Article 6.4 introduces a global carbon trading system, managed by a UN body. This system will let countries and companies trade emissions reduction credits generated from projects worldwide.
The new system replaces the older Clean Development Mechanism (CDM) from the Kyoto Protocol. It aims to be more transparent and effective, ensuring that carbon credits are credible and valuable.
In October 2024, Article 6.4 Supervisory Body finalized rules for how projects will work under this system. These include standards for carbon removal projects and emissions reduction methods. The system will let companies in one country earn credits for reducing emissions and sell them to companies in another country, fostering global cooperation.
Challenges and Pushback
Despite the breakthrough, reaching an agreement wasn’t easy. Some countries and groups raised concerns about how decisions were made. The Coalition for Rainforest Nations (CfRN), representing several developing countries, argued that Article 6.4 Supervisory Body bypassed proper procedures.
Kevin Conrad, CfRN’s Executive Director, said the body adopted rules without first getting approval from the Conference of the Parties (CMA), which oversees the Paris Agreement. As a compromise, the final text used softer language, like “take note,” to acknowledge the rules without fully endorsing them. This wording sends a message that future decisions must follow proper processes.
Despite these issues, Babayev assured participants that more discussions on Article 6.4 would continue. Negotiations will also focus on Article 6.2, which deals with how countries trade carbon credits directly.
Strengthening Carbon Markets With New Rules
The new global carbon market aims to solve problems that have plagued carbon trading in the past. Older systems often faced criticism for lacking transparency and effectiveness, which led to low demand and falling prices for carbon credits.
The chart below shows the quarterly credit retirements, which represent demand, falling and are lower this year than prior years.

With clear rules and a centralized structure, Article 6.4 hopes to restore confidence in carbon markets. Sebastien Cross, Chief Innovation Officer at BeZero Carbon, called the agreement a major win for COP29. “This framework provides the tools we need to make carbon markets work better,” he said.
The carbon finance sector is optimistic that this move will help revitalize trading.
The agreement also benefits project developers by giving them clear guidelines to follow. Countries can align their climate policies with international standards, making it easier to meet their emission reduction goals.
Economic and Environmental Benefits
A global carbon market could bring significant economic and environmental gains. For one, it will provide new funding opportunities for climate projects, especially in developing countries that need financial support.
By creating a market-driven system, Article 6.4 encourages businesses to reduce emissions in cost-effective ways. Companies that reduce more emissions than required can sell their extra credits for profit. Meanwhile, those struggling to meet their targets can buy carbon credits to make up the difference.
This system not only helps cut global emissions but also supports sustainable development in poorer regions. It also allows countries struggling to meet their target by purchasing carbon credits.
What’s Next?
The Article 6.4 framework is just the beginning. The next steps include registering project methodologies and establishing operational guidelines, expected to be in place by mid-2025. During this period, the Supervisory Body will focus on finalizing details to ensure the system operates smoothly.
However, significant work remains to address concerns about market integrity and inclusivity. Some stakeholders worry that a centralized system could disadvantage smaller or less-developed markets. Policymakers must ensure the system is fair and accessible to all participants.
While there are still challenges ahead, this agreement sets the stage for stronger international cooperation. By establishing a UN-backed carbon market, the deal promises to boost demand for carbon credits and direct funding to critical climate projects.
As COP29 continues, leaders will work to refine this system and tackle other important climate issues.
The post COP29 Breakthrough: UN-Backed Global Carbon Market Takes Shape appeared first on Carbon Credits.
Carbon Footprint
The Strategic Case for Nature-Based Carbon Investments
Nature-based carbon investments deserve consideration when they address a specific business dependency and produce outcomes you can measure. Imagine Moonbucks, a global coffee roaster planning next season’s espresso blend. It is considering natural Grade 4 coffee from Jimma, in southwestern Oromia, Ethiopia. Its sourcing decisions affect the roasting schedule and the cash tied up in coffee purchases. Moonbucks needs to understand which measures could protect that supply, what they would cost and how it would judge the results.
1. Define the sourcing problem before choosing a project
Moonbucks needs a dependable component for its espresso blend. Its procurement team wants continuity of volume and an agreed cup profile. Replacing a shipment at short notice could require new sample approval and changes to the blend, and given the schedules for cultivation, processing, and freight delivery, is practically impossible. Moonbucks needs to get this right, and its initial concern is inconsistent deliveries. It commissions an assessment of the supplying farms and post-harvest chain. The questions cover land condition, harvest availability and whether drying or storage problems are affecting saleable lots.
This distinction changes the investment brief. A tree-planting proposal cannot be assumed to fix drying problems. Better storage cannot restore eroded land. The team must establish which problem exists before selecting the response.
CCC’s guide to finding nature-based solutions in your supply chain explains where to look. Here, the next task is to turn a broad concern into a testable proposal.
2. Develop nature-based carbon investments around the actual supply chain
The assessment would trace Moonbucks’ purchases back through the exporter and supplying producer groups. Which farms supply the contracted lots? Who controls land-management decisions? How long does the buyer expect to maintain the purchasing relationship?
Furthermore, Jimma natural Grade 4 cannot be treated as interchangeable with every Ethiopian coffee. Moonbucks would need to test any substitute against its own blend and quality requirements.
Suppose Moonbucks’ assessment identifies an opportunity to maintain shade trees and restore vegetation along exposed streambanks. The IPCC describes agroforestry as a way to store carbon in vegetation and soil, with potential benefits for erosion control and water quality.1 Moonbucks would need local advice on species, growing conditions and maintenance before deciding how these measures fit its sourcing plan.
The proposal now has a defined sourcing connection and a candidate intervention. The next steps are to test its effect on production, assess carbon eligibility and build the financial case.
3. Compare the proposal with other ways to protect supply
WBCSD’s Nature-based Solutions Blueprint recommends comparing nature-based options with other responses across their benefits and costs.2 For Moonbucks, that means evaluating the landscape proposal alongside drying improvements, storage controls and alternative sourcing arrangements.
The product’s natural-process designation matters. Moonbucks should examine the drying and dry-milling chain alongside land conditions. Its team would check storage practices, contamination risks and incoming-lot quality to see whether problems arise before or after the coffee leaves the farms.
The revised proposal might combine land stewardship with separate post-harvest controls. Each component needs its own purpose and budget. A sustainability label should not obscure which activity is expected to solve which problem.
The project develops as the evidence improves. Its scope should follow the diagnosis rather than preserve the first idea unchanged.
4. Establish what the carbon outcome could count toward
Moonbucks’ sustainability team now tests the proposed carbon case separately from the sourcing case. Is the objective a measurable change in Moonbucks’ value-chain emissions, verified credits for separate voluntary use, or distinct outcomes under carefully defined arrangements?
Scope 3 covers value-chain emissions. A purchasing relationship alone does not prove that a farm intervention can be included in Moonbucks’ inventory. The team needs an applicable accounting method, defensible boundaries and evidence supporting attribution.
SBTi’s FLAG Guidance (forest, land and agriculture), version 1.2, says purchased credits used as offsets cannot meet near-term FLAG or energy and industry targets. Eligible land-based removals are subject to accounting requirements.3 Moonbucks needs to test its proposal against those rules before including an outcome in its targets.
For Moonbucks’ Jimma proposal, maintaining existing trees and establishing new vegetation could involve different carbon questions. Specialists must examine the baseline and additionality, meaning what changes because the project proceeds. They must also assess measurement and the risk that stored carbon is lost. CCC’s MRV and additionality article introduces those tests.
Until that work is complete, Moonbucks should not budget an assumed Scope 3 reduction or credit-sale receipt. Direct emissions reductions remain the priority.
5. Build a financial case that survives weaker assumptions
Moonbucks’ finance team would now build a multi-year budget. UNEP’s State of Finance for Nature 2023 compares current finance with the investment needed to meet climate, biodiversity and land-restoration goals.4 The company would cost its proposed activities, farmer participation and ongoing monitoring. Verification, where required, is a separate expense. Maintenance and responsibility for replacing failed plantings must remain visible after the initial establishment budget ends.
Operational benefits need equally careful treatment. If fewer rejected lots reduce emergency purchasing, count that saving once. Do not add “supply resilience” as another financial benefit when it represents the same avoided cost.
Moonbucks should compare a base case with slower benefits, higher implementation costs and no carbon revenue. It should also distinguish production outcomes from quality and shipment outcomes. A single good harvest would not prove that the landscape intervention caused better delivery performance.
A project can remain worth funding even when its carbon case needs more work. That decision must rest on the operational evidence and the company’s objectives, without unsupported environmental claims.
6. Fund a pilot with a clear expansion decision
Moonbucks’ first approval would fund a bounded pilot, rather than commit the entire sourcing program. Before spending, Moonbucks would agree on participating farms, responsibilities and the evidence needed at review.
Its scorecard could track farmer participation, implementation costs and plant survival, alongside accepted coffee volumes and lot-quality results. Carbon measurements would follow the selected method. Farm-level traceability must connect the intervention to the actual sourcing relationship.
Suppose Moonbucks’ review later finds that storage changes explain most quality improvements, while the land measures need longer observation. Those findings would shape the next decision: expand the proven component, adjust the landscape work or pause further spending. They would not justify crediting all improvements to tree planting.
This gives nature-based carbon investments a practical place in a multi-year strategy. Funding increases as the evidence supports it, and the project can change direction before a larger commitment.
Discuss a sourcing opportunity with CCC
Carbon Credit Capital’s nature-based supply-chain investment service uses its Dual-Value Model to examine supply-chain economics alongside potential sustainability outcomes.
Schedule a consultation to discuss your sourcing exposure and the questions to resolve before allocating capital.
Sources
- Intergovernmental Panel on Climate Change (IPCC), Climate Change 2022: Mitigation of Climate Change, Chapter 7, Agriculture, Forestry and Other Land Uses, section 7.4.3.3 (Agroforestry).
- World Business Council for Sustainable Development (WBCSD), Nature-based Solutions Blueprint, 5 June 2024.
- Science Based Targets initiative (SBTi), Forest, Land and Agriculture Science-Based Target-Setting Guidance, version 1.2, March 2026, section 3.1.4, pp. 37–38.
- United Nations Environment Programme (UNEP), State of Finance for Nature 2023, 2023.
Carbon Footprint
How to buy plastic credits, and what to check before you do
A plastic credit funds the collection of plastic waste in places where no formal system exists to collect it. Each credit represents a measured, independently audited quantity of plastic taken out of the environment or returned to use, tracked on a public registry.
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Carbon Footprint
EU carbon credit claims after 27 September 2026
EU carbon credit claims changed on 27 September 2026, the day the Directive (EU) 2024/825 began to apply across the European Union. The change is narrow. It changes how a company can talk about the credits it buys. A product can no longer be called neutral on the strength of compensation alone; however, every specific, evidenced statement about what a company measured, reduced, and funded stays fully available.
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