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COP30 Belém: Paris Agreement Carbon Market Goes Live, UN Retires Kyoto CDM & Open Coalition Forms

Week of November 21, 2025

Mahmoud Mobir••17 min read

Executive Summary: The Market Has Fundamentally Changed

The two weeks spanning November 7–21, 2025, mark the most significant structural shift in carbon markets since the Paris Agreement was signed. COP30 in Belém, Brazil, delivered operational breakthroughs that transition the global carbon ecosystem from fragmented voluntary mechanisms into a sophisticated, quasi-regulatory financial market.

Five transformational developments:

  1. UN Paris Carbon Market Operational — Article 6.4's first methodology approved (landfill methane), making Paris-aligned credits available for the first time
  2. Kyoto CDM Dies — Countries agreed to phase out the Clean Development Mechanism by end of 2026, retiring the legacy system
  3. Global Market Coalition — Brazil, EU, China, UK, Canada + 13 others launch Open Coalition to harmonize compliance markets
  4. ICVCM Quality Purge — Major REDD+ and agriculture methodologies approved, legacy credits face stranding
  5. Sovereign Supply Control — Brazil's ProFloresta+ ($25M+ program) and Indonesia's Reg 110/2025 position carbon as strategic state commodity

For carbon project developers: The "Wild West" era is over. Success now requires compliance-ready design, sovereign authorization, CCP eligibility, and long-term permanence guarantees. The market has bifurcated into premium compliance-grade assets ($20-60/ton) and legacy avoidance credits (<$4/ton).

1. COP30 Belém: Operationalizing the Paris Agreement Carbon Market

The 30th Conference of the Parties in Belém, Brazil, served as the crucible for the future of international carbon trading. Despite logistical challenges—including a fire in the Blue Zone that suspended negotiations—the summit delivered substantive outcomes that will reshape the market for decades.

1.1. Article 6.4: First Paris-Aligned Methodology Approved

Historic Milestone: The Article 6.4 Supervisory Body approved the world's first UN Paris Agreement crediting methodology in late October 2025, covering landfill methane management projects. This makes the UN global carbon market fully operational.

Why this matters:

This is the first "Paris-aligned" crediting method, fundamentally different from the old Kyoto CDM. The methodology introduces declining baselines over time:

Additionality Enforcement: The Supervisory Body also adopted a new investment analysis tool to ensure additionality – projects must demonstrate they aren't financially viable without carbon credit revenue.

What's next: More methodologies are expected to follow (e.g., for renewable energy), and project activities can now register under the Article 6.4 mechanism for the first time.

1.2. Kyoto CDM Phase-Out: End of an Era

In a symbolic but critical move, countries at COP30 agreed to fully phase out the Clean Development Mechanism (CDM) by end of 2026, finally retiring the moribund Kyoto credit system in favor of the Paris-era Article 6 framework.

Market impact:

  • ~4.7 billion CERs issued under CDM since 2005, but issuance has slowed to a trickle
  • Projects must transition to Article 6.4 or voluntary standards (Verra, Gold Standard) by 2026
  • Remaining CDM credits may face demand collapse as buyers shift to Paris-aligned assets

Developer action: If you operate CDM-registered projects, begin transitioning NOW. The 2026 deadline is closer than it appears given registry processing times.

1.3. Reversal Risk and Permanence Standard

A pivotal development for removal projects is the agreement on the Reversal Risk and Permanence Standard for Article 6.4 credits.

Multi-layered defense against non-permanence:

Cost implications: This creates a higher CAPEX barrier for removal projects seeking Article 6.4 status. Long-term monitoring and insurance premiums must be factored into unit pricing.

The negotiation was contentious. Key friction points included monitoring period length and exit liability options. For developers, this means Article 6.4 removals will trade at premiums over VCM equivalents, but the market will reward true permanence.

1.4. Appeals and Grievance Mechanism

To bolster legitimacy, the Supervisory Body operationalized a robust Appeal and Grievance Procedure with legal standing for stakeholders.

Eligible appellants:

  • Stakeholders eligible for local consultation
  • Project participants
  • Designated National Authority (DNA) of host country
  • DNA of authorizing country

Grounds for appeal: Exceeding authority, factual/procedural errors, incorrect standard application.

New risk factor: Projects that fail to adequately consult communities or rely on weak additionality claims may face formal UN challenges, potentially leading to credit suspension or cancellation.

The call for experts to staff grievance panels was issued during the reporting period, signaling imminent implementation.

1.5. The "Fossil of the Day" Controversy

The credibility of Article 6.4 faced a challenge regarding fossil fuel lobbyist influence. Indonesia was awarded the "Fossil of the Day" by Climate Action Network after civil society identified 46 fossil fuel lobbyists in its official delegation.

Allegations: Indonesian interventions on removals and permanence mirrored, sometimes verbatim, talking points from industry groups and Conservation International, advocating for weaker permanence rules.

Market implication: If Article 6.4 credits are perceived as "loopholes" engineered by lobbyists, premium buyers and the EU may shun the mechanism, relegating it to a low-quality compliance sink.

2. The Open Coalition: Global Compliance Market Integration

Perhaps the most structurally significant outcome of COP30 was the launch of the Open Coalition on Compliance Carbon Markets by Brazil, EU, China, UK, Canada, Chile, Germany, Mexico, Armenia, Zambia, France, and 7 others.

2.1. Coalition Mandate and Mechanism

This coalition represents a decisive shift away from market fragmentation. Its mandate:

2.2. VCM-Compliance Firewall Becomes Permeable

This is a strategic signal that the "compliance firewall"—which has historically kept VCM credits out of systems like the EU ETS—is becoming permeable.

Action for developers: Align Project Design Documents with the Common Carbon Credit Data Model (CCCDM) being discussed in G20 and coalition forums. Projects in coalition member countries (Zambia, Mexico, Chile, Armenia) may soon enjoy preferential access to premium compliance demand, creating a two-tiered market based on geopolitical alignment.

3. Article 6.2: The Singapore Protocol Breakthrough

While Article 6.4 builds a centralized UN machine, Article 6.2 allows decentralized bilateral trades. To accelerate this, Singapore's NCCS, Gold Standard, and Verra published the final Article 6.2 Crediting Protocol on November 12, 2025.

3.1. Why This Is a "Force Multiplier"

This protocol is revolutionary because it allows governments to utilize existing VCM infrastructure (Gold Standard, Verra) to issue and track ITMOs, rather than building new national registries from scratch.

Key features:

  • Integration: Ensures credits used for NDCs are properly accounted via Corresponding Adjustments (CAs) to prevent double counting
  • Standardization: Lowers administrative transaction costs for Article 6.2 trades across jurisdictions
  • Off-the-shelf pathway: Projects registered under Gold Standard or Verra in partner countries can be seamlessly converted into ITMOs with host country authorization

Developer opportunity: If you have Verra or Gold Standard projects in countries with Singapore partnerships (Bhutan, Thailand, Papua New Guinea), you have a direct pathway to Article 6.2 compliance markets.

4. ICVCM Quality Revolution: The CCP Binary Filter

The ICVCM's "CCP" label is rapidly becoming the binary filter for market viability: credits without it risk becoming stranded assets.

4.1. REDD+ Breakthrough: VM0048 Scenario 1 Approved

On November 19, 2025, ICVCM made a landmark decision approving three key forestry methodologies:

  • ART TREES v2.0 (including TREES Crediting Level)
  • Verra VM0048 v1.0 (Reducing Emissions from Deforestation)
  • Verra Jurisdictional and Nested REDD+ (JNR) Framework v4.1

Critical technical detail: ICVCM confirmed that credits issued under VM0048 Scenario 1 are eligible for the CCP label.

What is Scenario 1?

Strategic value: This resolves the "nesting deadlock." Developers can now operate private REDD+ projects within jurisdictions that have national baselines without waiting for governments to issue credits directly.

4.2. Sustainable Agriculture: First CCP-Approved Soil Carbon Methodologies

ICVCM delivered another breakthrough in October 2025: approval of the first sustainable agriculture methodologies under CCP:

  • CAR's U.S. Soil Enrichment Protocol v1.1
  • Verra's VM0042 Improved Agricultural Land Management v2.2

These are the inaugural soil carbon credit methodologies to meet the high-integrity benchmark.

Critical conditions:

Market impact: The 40-year lock-in may deter some landowners but guarantees high-quality removal claims. Expect CCP soil carbon credits to command 200-300% premiums over non-CCP agriculture credits.

4.3. Cookstove Correction: The Retrofit Trap

The clean cookstove sector received a lifeline—but with strict conditions. ICVCM approved Gold Standard's Metered & Measured Energy Cooking Devices and Verra VM0050, plus older TPDDTEC versions only with conditions.

The trap: Projects using older TPDDTEC versions (v2-3.1) must demonstrate alignment with stricter v4.0 metrics to receive CCP label.

Implication: Massive retrofitting burden. Developers holding vintage cookstove credits issued under TPDDTEC v2/v3 must re-verify data against v4 standards. Credits that can't meet v4 rigor will trade at deep discounts.

4.4. Other Key Methodology Decisions

Approved:

Exclusion challenge: The Project Developer Forum raised formal grievance regarding multi-methodology projects. Currently, projects combining CCP-approved and non-approved methodologies are disqualified entirely—a significant rigidity affecting complex industrial projects.

5. National Regulatory Deep Dives

5.1. Brazil: ProFloresta+ Sovereign Price Floor

In conjunction with hosting COP30, Brazil launched ProFloresta+, a collaboration between BNDES and Petrobras.

Program structure:

Strategic analysis: This is massive state intervention. By acting as guaranteed offtaker for 5 million credits, Brazil is effectively setting a price floor for Amazonian ARR credits. The 1% interest concessional financing radically de-risks restoration projects, making them bankable for private equity.

Market impact: Will likely crowd out low-quality supply and establish Brazilian ARR credits as benchmark assets globally. Expect this to harden the floor price for all ARR credits at $20-25/ton minimum.

5.2. China: Carbon Market Expansion and Price Surge

China's carbon market momentum continues accelerating.

Price dynamics: Carbon prices in China's national ETS have been trading above ¥60/tonne (~$8.50) as compliance demand rises, recently hitting ¥66.9/ton.

Sectoral expansion: China moved to add steel, aluminum, and cement sectors into the ETS with tighter allowance allocations, driving the price surge.

CCER revival: China released three new carbon credit methodologies for its voluntary market (CCER program), expanding the project pipeline for compliance and voluntary use. New methodologies cover blue carbon, biogas, and other categories.

Cap tightening: China pledged to annually reduce the ETS cap going forward, which will drive demand for both allowances and high-quality offsets.

Developer opportunity: China's undersupplied voluntary market creates significant opportunity for projects approved under new CCER methodologies.

5.3. Indonesia: The Great Decoupling (Regulation 110/2025)

Indonesia fundamentally restructured carbon governance with Presidential Regulation No. 110 of 2025, signed by President Prabowo Subianto, replacing the restrictive Regulation 98/2021.

Key shifts:

  1. Decoupling from NDCs: Article 58(1) explicitly states carbon trading can proceed without waiting for Indonesia to meet NDC targets. Removes "surplus-only" export restriction.
  2. Registry bifurcation:
  3. Ambitious target: Government set target to sell 13.4 billion tonnes CO₂e credits to global buyers
  4. Mutual Recognition Agreement with Verra allows dual registration

Implication: Indonesia is shifting from protectionist to mercantilist stance. By separating commercial trading (SRUK) from bureaucratic climate ledger (SRN-PPI), the government hopes to accelerate transaction velocity and attract foreign capital.

5.4. Zimbabwe: Fiscal Course Correction

Zimbabwe, which shocked the market in 2023 with a 50% revenue clawback, amended its laws to remain competitive.

The amendment:

Analysis: Previous punitive tax regime stifled FDI. The amendment balances state revenue capture (30% royalty) with developer upside to justify project risk.

5.5. EU: 5% Offset Path to 2040 Target

In Europe, negotiators agreed that up to 5% of the EU's stringent 90% GHG reduction by 2040 target can be met via international carbon credits (with possible additional 5% in "emergency" circumstances).

Market implications:

For developers: EU will prioritize Article 6 credits and CCP-labeled projects. Position now for 2036 demand surge.

6. Corporate Activity and Investment Flows

Despite regulatory flux, private capital continues flowing into high-quality origination.

6.1. Major Deals and Investments

Varaha (India): Secured $30 million from Mirova, a French sustainable investment manager, for regenerative agriculture and biochar expansion. Largest nature-based carbon investment in India to date.

Honda: Joined Carbon by Indigo program to support sustainable agriculture in the U.S., offsetting downstream scope 3 emissions.

Tech Giants: Microsoft and Alphabet cumulative investments in durable removals exceed $10 billion, creating a "market within a market" for engineered removals (DAC, biochar) trading at massive premiums.

Return Carbon: Launched "Trinity Campus" in Texas, a major testbed for Direct Air Capture and storage, signaling continued industrialization of US carbon removal sector.

7. Market Intelligence: Pricing Dynamics and Data Flows

7.1. The Quality Bifurcation

Market data confirms "carbon price" is a misnomer—there are now distinct asset classes with uncorrelated pricing:

| Credit Type | Price Range | Premium/Discount | Key Drivers | | --- | --- | --- | --- | | High-Quality ARR | $21.30–$24.00/t | High Premium | CCP-eligible supply scarcity; ProFloresta+ floor; "Nature Positive" demand | | Generic Avoidance | <$4.00/t | Deep Discount | Oversupply of pre-2020 vintages; CCP exclusion; reputational risk | | Engineered Removals | $100+/t | 381% Premium | Supply constrained; tech/finance mandates; long-term offtakes | | Investment Grade (BBB+) | ~$14.80/t | Premium | Lower delivery/invalidation risk | | CCP Soil Carbon | $18-25/t (est.) | 200-300% vs non-CCP | First CCP-approved ag methodologies |

Key insight: The 381% premium for removals over reductions indicates the market has fundamentally repriced "durability." ARR credits are the "goldilocks" asset—more scalable than DAC but more permanent than avoided deforestation.

7.2. Supply and Demand Signals

Issuance contraction: Issuances dropped to 63.2 million in Q3 2025 (down from 76.9 million in Q2). Suggests developers are strategically withholding supply, waiting for CCP labels.

Retirement resilience: Retirements remained steady at 31.86 million in Q3, tracking record levels YTD. Contradicts demand destruction narrative—corporates are still retiring, but highly selective.

Sectoral rotation: Professional services firms increasing cookstove retirements (cost-driven), while tech firms abandon renewable energy credits in favor of removals.

Long-term scenarios: BloombergNEF forecasts "High Quality" scenario with supply growing to 2.6B tons by 2030 at $60/ton costs. In "low quality" scenario (market reset fails), supply floods to 5.3B tons, depressing prices.

8. Strategic Outlook: What Project Developers Must Do Now

The post-COP30 landscape presents a complex matrix of risks and opportunities.

8.1. The "Compliance-Ready" Imperative

The Open Coalition and Singapore Protocol confirm that the most valuable carbon assets will be compliance-ready.

Action items:

  • Align Project Design Documents with Article 6.2 requirements from inception
  • Secure Letters of Authorization (LoAs) from host governments
  • Ensure registry accounts can handle Corresponding Adjustments
  • Prioritize origination in Open Coalition member states (Zambia, Chile, Mexico, Armenia)

8.2. Navigating the Nesting Mandate

With VM0048 Scenario 1 approval, the era of independent REDD+ projects in jurisdictions with national baselines is ending.

Action items:

  • Engage immediately with national/sub-national governments to secure FREL allocation
  • Use Indonesia Reg 110/2025 as blueprint for private-public interface
  • Failure to "nest" will render projects ineligible for CCP labels

8.3. Managing Political and Litigation Risk

The "Fossil of the Day" incident and Kenya's Isiolo court ruling show social license is as critical as carbon accounting.

Action items:

  • Strengthen Free, Prior, and Informed Consent (FPIC) to withstand Article 6.4 Grievance Mechanism scrutiny
  • Cultivate relationships with political risk insurers (MIGA, private markets) to wrap credits
  • Insurance wrapper will become key differentiator for premium sales (required for Verra CORSIA label)

8.4. The Removal Pivot

Pricing data is unequivocal: the market values removals (ARR, Biochar, IFM) significantly higher than avoidance.

Action items:

  • Pivot capital allocation toward ARR and Biochar (using Puro 2025 methodology with 200-year durability)
  • ProFloresta+ proves sovereign backing available for ARR, reducing counterparty risk
  • Target CCP-eligible methodologies exclusively for new project development

8.5. Quality Documentation Is Non-Negotiable

With first CCP-labeled credits now in circulation and grievance mechanisms operational, documentation standards have never been higher.

Action items:

  • Invest in robust MRV (consider digital MRV platforms)
  • Over-document FPIC processes and community consultations
  • Build in long-term monitoring budgets from day one (40-year+ commitments for ag, 25-year for ARR)
  • Consider third-party validation beyond standard VVBs for premium positioning

What This Means for Project Developers: The Bottom Line

The VCM is shedding its "voluntary" skin. It is becoming a professionalized, quasi-compliance market where technical rigor (CCP labels), sovereign alignment (Article 6), and durability (Removals) determine value.

Five critical takeaways:

  1. CDM transition deadline is real — 2026 is closer than it appears. Begin migration NOW.
  2. Geographic positioning matters — Open Coalition countries (Brazil, Mexico, Chile, Zambia, Armenia) will have preferential access to premium markets.
  3. CCP is the binary filter — Non-CCP credits risk becoming stranded assets. Budget for retrofitting or write off legacy inventory.
  4. Sovereign programs set floor prices — Brazil's ProFloresta+ at $20-25/ton establishes new ARR baseline. Similar programs expected from Indonesia, DRC.
  5. Removal premiums are structural, not cyclical — The 381% premium reflects permanent market repricing of permanence. Avoidance credits face structural headwinds.

Success in 2026 will belong to those who can navigate the tripartite structure: CCP labels + Article 6 alignment + durability.

Key Numbers This Week

  • 5 million — Brazil ProFloresta+ initial credit purchase
  • 13.4 billion tonnes — Indonesia's carbon credit sales target
  • ¥66.9/ton — China carbon price after sectoral expansion
  • 381% — Removal credit premium over avoidance
  • $10+ billion — Microsoft + Alphabet cumulative removal investments
  • $30 million — Varaha funding (largest India nature-based deal)
  • 5% — EU 2040 target achievable via international credits
  • 2026 — Kyoto CDM phase-out deadline
  • 40 years — Permanence requirement for CCP soil carbon credits
  • 200 years — Puro.earth biochar durability standard (2025 edition)

This comprehensive analysis synthesizes developments from COP30 Belém and related carbon market events.