Azerbaijan’s COP29 presidency claimed an early win at the start of the climate summit when countries waved through long-awaited – and controversial – rules laying the foundations for a new UN carbon market, without any debate.
But the approval of the documents setting out key guidelines – or “standards” – for the development of carbon credit projects and carbon removal activities provoked strong opposing reactions.
For some, including proponents of carbon credits and the COP29 presidency itself, the adoption late on the first day of the talks in Baku was a major “breakthrough” that ended a years-long deadlock and paved the way to raise hundreds of billions of dollars for climate action.
“This will be a game-changing tool to direct resources to the developing world,” COP29 President Mukhtar Babayev said.
UN climate chief Simon Stiell told reporters at a press conference on Tuesday that “this is not some bit of arcane UN bureaucracy”, but something that could help countries implement their climate plans “faster and cheaper”.
The Azerbaijan COP presidency put a number to that assertion, claiming that “co-operation across borders” under Article 6 of the Paris Agreement using carbon credits could reduce the cost of carrying out national climate plans by $250 billion every year.
That figure comes from a theoretical modelling exercise conducted in 2019 by the International Emissions Trading Association (IETA), a pro-carbon market group that counts among its members many of the world’s largest fossil fuel companies, including Saudi Aramco, ExxonMobil, Shell and BP.
Climate Home spoke to one carbon market expert who raised doubts over the $250-billion figure due to the number of assumptions made in the study that could be out-of-date by now.
“Rushed” approval
Many close watchers of carbon market talks strongly objected to the “unprecedented” decision to greenlight the rules in the opening plenary of COP29, bypassing the scrutiny of negotiators and observer groups. They voiced concerns not only about the risk of the resulting carbon credit projects producing dubious emission reductions and dragging down climate ambition, but also about the precedent this move sets.
“This decision should have not been rushed through without giving the space to adequately discuss the issues,” said Trishant Dev, programme officer for carbon markets at the Delhi-based Centre for Science and Environment (CSE). “Especially as, in previous years, several countries objected to the inadequate nature of these standards.”
Maria AlJishi, chair of the Article 6.4 Supervisory Body, speaking after a decision on carbon markets was adopted. Photo: UN Climate Change – Kiara Worth
While it caught many by surprise on Monday, the fast-tracked adoption of the rules stemmed from a strategic move made nearly a month ago by the Supervisory Body tasked with overseeing the development of the Article 6.4 crediting mechanism.
After several days of drawn-out discussions, this technical panel decided to directly adopt guidance on carbon-credit methodologies and carbon removals as “standards”, rather than forwarding it as a proposal to be fought over at COP.
Government negotiators were therefore presented with a complete document that they could either accept or reject as a whole without re-arranging any of its contents. They opted for the former, with a strong nudge from the Azerbaijan presidency that has made the “operationalisation” of Article 6 one of its top targets for the climate summit.
More work to be done
While the decision at COP29 rubber-stamped the Supervisory Body’s approval, countries left the door open to asking the technical committee to add more provisions or stronger guardrails on top of the adopted rules. Negotiators will discuss over the next two weeks whether and how to take this forward.
But, regardless of this COP’s outcomes, carbon market experts also urged caution over what Monday’s decision means for long-running efforts to turn the UN carbon market into a reality, as several key building blocks still need to be agreed on before credits can be traded.
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“This was certainly one of the biggest steps in terms of operationalising Article 6.4,” Jonathan Crook, a policy expert at Carbon Market Watch, told Climate Home. “However, it’s not like starting in January we’ll see this market up-and-running. We’re quite a long way from there”.
Technical committees operating within the Supervisory Body still need to develop and approve a series of “tools” that developers of carbon credit projects will have to apply to demonstrate that emission reductions or removals are credible, durable and do not create any unintended harm. Additionally, the registry where the credits will be physically traded has not yet been created.
“I wouldn’t expect all of that to be completed before the end of next year, if not 2026,” said Crook.
‘Junk’ credits revived
The first batch of credits likely to be traded under the new UN carbon market are old offsets originally developed under the Kyoto Protocol-era’s Clean Development Mechanism (CDM), starting from the early 2000s. Over 1,200 CDM projects are currently waiting for approval from their host countries to transition into the new system.
Nearly four-fifths of these are renewable energy activities, like solar power plants or wind farms, which experts believe have produced “junk” offsets because the income from the carbon markets was not needed to build them and therefore does not produce “additional” emissions reductions.
Maria AlJishi, chair of the Supervisory Body, said at a press conference in Baku on Tuesday that the adoption of the standards on COP29’s opening day would enable the process of switching CDM projects to the Article 6.4 mechanism to continue.
“This means hopefully that we could be seeing the first issuance of 6.4 credits soon,” she added.
(Reporting by Matteo Civillini; editing by Megan Rowling)
The post Is COP29 “breakthrough” on UN carbon market all it seems? appeared first on Climate Home News.
Climate Change
Coles, Woolworths failing on deforestation commitments
SYDNEY, Wednesday 26 August 2026 — New 2026 Sustainability Reports released by supermarket giants Coles and Woolworths this week demonstrate the retailers are failing on their commitments to end deforestation in their supply chains.
Adele Chasson, Nature Policy Lead at Greenpeace Australia Pacific said:
“These so-called sustainability reports are revealing. Despite their public commitments in 2024 and 2025, neither Coles nor Woolworths have taken deforestation-linked beef off their shelves. Meanwhile, bulldozers continue to tear up forests and bushland, pushing wildlife closer to extinction and causing mass toxic runoff to flow into the Great Barrier Reef. Millions of native animals like koalas are losing their homes to beef pastures each year, while the big supermarkets put off action.
“Australians would be shocked to know that beef on the shelves of our biggest supermarkets could be pushing threatened species to the brink of extinction. Collectively Coles and Woolworths have made more than $2 billion in profits in the last year, profiting from the destruction of wildlife and precious Australian nature. Coles and Woolworths owe it to shoppers to deliver on their promises and end deforestation in their supply chains now.
“As big beef buyers, Coles and Woolworths have an essential role to play in keeping Australia’s unique forests standing. They can help stop the Great Barrier Reef from being poisoned by runoff and protect iconic forest wildlife by taking deforestation off their shelves. It’s time these big companies put their money where their mouths are and follow through on their promise of sourcing and supplying deforestation-free beef.”
Climate Change
New Zealand moves to protect business with law curtailing climate litigation
New Zealand’s parliament has adopted a controversial new law blocking a whole avenue of climate litigation and shutting down its most advanced corporate lawsuit, which has been blamed by the government for shaking business confidence and investment.
The Climate Change Response (Tort Liability) Amendment Bill, expected to take effect in the coming days after it is formally signed by the Governor-General, prevents all current and future civil claims for climate loss or harm under tort law.
Justice minister Paul Goldsmith said last week that the aim was to give businesses “certainty around their climate change obligations”, noting it would not alter the government’s responsibilities under the Climate Change Response Act 2002 nor business obligations under the Emissions Trading Scheme.
“Our response to climate change is best managed by the Government at a national level and not through piece-meal litigation in the courts,” he added in a statement.
Such litigation, he said, “risks developing a new regime that contradicts the framework Parliament has already enacted” to tackle climate change.
Goldsmith singled out a key domestic climate lawsuit brought by Northland iwi leader and activist Mike Smith against six big companies: dairy firms Fonterra and Dairy Holdings, energy firms Genesis Energy and Z Energy, New Zealand Steel and coal mining firm BT Mining. A seventh original defendant, Channel Infrastructure, was dropped after it permanently decommissioned its Marsden Point oil refinery.
Smith argued that these companies had caused him harm under public nuisance and negligence law, as well as a third breach of a duty to cease contributing to climate change that has yet to be tested domestically. He did not seek financial compensation, instead asking for the companies to immediately stop emitting or contributing to net greenhouse gas emissions.
In one of the most advanced corporate climate accountability lawsuits in the world, a trial had been scheduled for April 2027 after the Supreme Court unanimously allowed the case to continue.
Corporate lobbying in the shadows
Smith described the passing of the bill as “deeply concerning”, particularly as it coincided with the Supreme Court hearing another of his climate lawsuits. In that case, Smith v Attorney-General, he argues that the government’s response to climate change and its impacts on Māori communities in particular breaches rights to life and culture.
“That timing raises profound questions about the separation of powers and the rule of law,” said Smith. “Whatever one’s view of the merits of these cases, it is deeply troubling when parliament intervenes to remove a legal pathway while the courts are actively considering fundamental questions about climate responsibility, rights and the crown’s obligations.”
The bill – which says that no person (including the government) can be found liable in tort for emissions-related climate change effects – followed major lobbying efforts by the companies defending themselves in Smith’s lawsuit. They outlined a proposed legal amendment in a briefing note to the government in 2024.
The centre-right government has been fiercely criticised over its lack of transparency in relation to this lobbying activity. The national ombudsman recently found that the Prime Minister’s Office effectively withheld information requested by the Environmental Law Initiative about meetings, discussions and conversations regarding Smith’s case.
Green groups fail to stop bill
The bill sparked huge concern among environmental campaigners in New Zealand and elsewhere. Greenpeace Aotearoa called it a “shocking abuse of executive power” and the vast majority of submissions to a parliamentary inquiry said it should be rejected.
But in the end, it was adopted with little resistance, moving relatively smoothly through parliament, passing its third reading by 67 votes to 53. Sam Bookman, climate law lecturer at Melbourne Law School, told Climate Home News he was not surprised by this, given that the coalition government has a secure majority.
A complaint has been made to the UN special rapporteur on climate change and human rights by Smith, the National Iwi Chairs Forum Pou Tikanga and youth coalition Climate Clinic Aotearoa over what they see as the government’s heavy-handed approach. Smith is also challenging the new law in yet another lawsuit.
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Bookman thinks it “very unlikely” that such a challenge will succeed, noting that New Zealand’s constitution is firmly anchored in parliamentary sovereignty.
But the expert in climate law does not see the bill as the end of legal action in the country, noting that New Zealand has a “sophisticated climate litigation landscape with a growing number of specialist and experienced lawyers and NGOs”.
The country is also approaching its next general election in November, and some opposition parties have pledged to restore access to the courts if elected.
Amanda Larsson, global project lead on agriculture for Greenpeace International, said: “This law deserves to be tested, and I strongly encourage the international climate litigation community to unite and help defend New Zealanders’ fundamental right to hold polluters accountable before this becomes a global blueprint.”
Copycat legislation on the rise
New Zealand’s move is part of a small but growing legislative effort to shut down climate litigation around the world.
In the US, Republican politicians introduced legislation in the House and Senate in April that would shield fossil fuel firms from climate liability lawsuits. Similar laws have already been passed at state level in Tennessee, Utah, Iowa and Louisiana.
The German state of Bavaria has put forward a similar proposal to the Federal Council, aiming to block private climate claims as well as the recognition and enforcement of foreign judgments imposing such liability. There are also proposals to limit available remedies and actions in the Netherlands and Belgium.
UN General Assembly backs “climate obligations” set by world’s top court
Bookman said he expects more efforts to counter climate damages litigation and advised plaintiffs to think about how to respond, including drawing on broader support in opposing them.
“Even though it’s very hard for plaintiffs to win these types of cases, companies are very eager to avoid the expense, embarrassment and political accountability that come even with unsuccessful lawsuits,” he said.
The post New Zealand moves to protect business with law curtailing climate litigation appeared first on Climate Home News.
New Zealand moves to protect business with law curtailing climate litigation
Climate Change
Indonesia’s nickel production cuts are not enough to create a sustainable industry
Bhima Yudhistira Adhinegara is the Executive Director of the Center of Economic and Law Studies (CELIOS), an Indonesia-based economic think tank. Muhammad Zulfikar Rakhmat is the Director of the China-Indonesia desk at CELIOS.
Indonesia produces around 60% of the world’s nickel, a metal used to manufacture batteries for electric vehicles (EVs) – more than any other country in the world. But in 2026, the government sharply reduced how much of its nickel can be extracted from the ground.
Production quotas were reduced by around 40% this year compared to 2025. Weda Bay, the largest nickel mine on Earth, had its allowance cut by more than 70% and exhausted its full-year quota by the end of May, halting mining entirely; it cannot resume large-scale extraction until next year unless regulators grant an extension.
The policy has sparked a vivid debate in Indonesian policy circles: how can the country shift its strategy from a decade of mining vast quantities of cheap nickel to producing a high-value and low-carbon material that the rest of the world wants for EV batteries.
The cuts aren’t a silver bullet to clean up Indonesia’s nickel industry, whose smelters are powered by coal – the most polluting fossil fuels. But alongside stricter enforcement of environmental rules, it is one side of efforts to produce more sustainable nickel for a premium.
Restricting Indonesia’s nickel output
Production quotas were introduced to stop the collapse of nickel prices because of oversupply in the market. Prices had fallen more than 40% in 2023 alone and kept sliding as Indonesian supply kept growing, hitting a four-year low of around $13,900 a ton in late 2025.
Critics called the recent tightening of production quotas proof that Indonesia’s nickel strategy has failed, arguing that the industry shouldn’t need to throttle its own output to survive. But when assessed against what the policy was supposed to do – push up nickel prices – it has worked. Prices jumped to $20,000 a ton in May, the highest since 2024.
Chinese industry groups representing companies that have invested billions to mine and refine the country’s nickel were furious, warning Indonesia’s president Prabowo Subianto that the cuts put $50 billion worth of investment at risk. But much of that Chinese capital is sunk into smelters and processing plants built specifically to run on Indonesian ore, and cannot simply be moved elsewhere. That gives Jakarta more room to hold its ground than the warning suggests.
Stronger environmental enforcement
Since the start of the year, Indonesia’s forestry task force has seized more than four million hectares of land from mines and plantations operating illegally in protected forests, collecting over two trillion rupiah ($113 million) in fines.
This included 148 hectares seized from Weda Bay for lacking a forestry permit. The share of nickel produced from illegal small-scale mining also fell from about a quarter in 2022 to roughly 10% by 2024.
The crackdown responds to serious environmental damages in the nickel industry. On Obi Island, a waste pond collapsed after heavy rain in June 2025, flooding three villages and killing a resident. Internal company tests found chromium-6 – a carcinogen – in the water, in quantities far above the legal limit. The footprint of another mine near Raja Ampat, which is home to some of the world’s richest coral reefs, grew 60-fold in just eight years.

The market is responding to early cleanup efforts. Low-carbon nickel now sells for a real premium, roughly $18,800 to $19,300 a ton compared with $17,900 to $18,300 otherwise, as carmakers seek to source cleaner materials to comply with the European Union’s new emissions rules for imports.
In turn, this is incentivising the industry to do more to green its operations. Vale Indonesia’s smelter in South Sulawesi now runs almost entirely on hydropower, for example.
None of this addresses coal use, however. Major Indonesian nickel producers still emitted an estimated 15 million metric tons of greenhouse gases in 2023. Indonesia may be cracking down on illegal mining and rewarding cleaner producers but it is still running its mines on the dirtiest fuel available.
Unequal benefits
For Indonesia to truly benefit from producing cleaner and high-value nickel, it needs to reap the economic benefits too. Although the industry has boosted the country’s economic growth, the reality on the ground tells a different story.
Konawe in Southeast Sulawesi is home to a major smelting complex. Growth in the district jumped from 6% to 22% between 2015 and 2023, driven almost entirely by the nickel industry, according to a study by the Lowy Institute study. At the same time, poverty levels increased slightly and unemployment remained unchanged.
In Halmahera, another epicentre of the nickel industry, spending by the poorest fifth grew just 5% between 2019 and 2022, compared with 28% for the wealthiest fifth, according to a separate study.
Part of the reason for this inequality is the system for transferring mining royalties to district authorities where the mines are located. In theory, they are entitled to the largest share. But in practice, payments are delayed, companies routinely dispute what they owe and royalties are pooled and distributed across a larger area.
The Natural Resource Governance Institute has found that decentralisation handed local governments power to approve new mines faster than they could build their capacity to manage them. Higher output raises national income on paper, but local governments remain constrained by fiscal rules and infrastructure costs that scale with mining.
None of this makes the 2026 quota cuts a mistake. Indonesia has every right to defend its pricing power over a resource it controls. But limiting extraction isn’t going to fix underlying issues around environmental enforcement and revenue-sharing. That requires rules that are consistently enforced, royalties that reach communities living by the mines, and a plan to wean smelters off coal.
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Indonesia’s nickel production cuts are not enough to create a sustainable industry
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