The latest developments at COP30 mark increased focus and ongoing progress in compliance carbon markets, with Brazil at the centre of these changes. Brazil launched the Open Coalition on Compliance Carbon Markets, a forum that now includes over a dozen countries, such as China, the EU, Canada, and the UK. This coalition is designed to offer a shared standard and pathway for nations to regulate, price, and trade carbon, with the goal of harmonizing domestic systems and accelerating global decarbonization. Participation in the coalition is voluntary and is intended to foster the exchange of best practices while promoting high-integrity credits. It also aims to build trust and transparency, which is particularly important given past confidence issues arising from current global offset systems. The coalition aims not only at environmental outcomes but also at integrating economic and social benefits, such as enabling technology transfer, driving investment, and supporting a fair transition for emerging economies.
Simultaneously, COP30 saw progress on the operational details of Article 6.4, the Paris Agreement Crediting Mechanism (PACM), a key component of the Paris Agreement’s global carbon market framework. Supervisory groups advanced discussions on how international carbon credits will be generated, transferred, and tracked under a regulated system. This technical progress is expected to contribute to the credibility and scalability of global compliance markets. Article 6.4 is expected to provide a central mechanism for ensuring environmental integrity and avoiding double-counting across borders. Both the Open Coalition and Article 6.4 supervisory work reflect recognition that robust monitoring practices, reporting, and verification are crucial for linking carbon markets.
Europe’s Carbon Border Adjustment Mechanism (CBAM) emerged as one of the most debated issues at COP30. CBAM is designed to require importers to pay for the carbon intensity of goods entering the EU, thereby ensuring a level playing field as the union tightens its own emissions trading scheme. However, the policy has raised concerns from leading exporters in developing economies, who argue that it is protectionist and could undermine their own efforts to participate in global carbon markets. This friction shows ongoing discussions between developed and developing countries over fair competition, carbon leakage, and the appropriate pace of trade reform. CBAM is scheduled to begin implementation in 2026, however, key details, such as the precise methodology for calculating embedded emissions, reporting requirements, and recognition of carbon price in other countries are still pending. The remaining uncertainties around these elements continue to contribute to the debate among affected countries and companies.
Impact on North American Markets
Canada and the United States both operate compliance carbon markets that may be impacted by these developments, though the structure differs. In Canada, these markets exist at both the federal and provincial levels, while in the US, compliance programs are implemented at the state level (ie. California Cap-and-Invest, Washington Cap-and-Invest, Regional Greenhouse Gas Initiative). Greater alignment between these markets could reduce barriers to using international carbon credits and may encourage cooperation with other jurisdictions. The Open Coalition’s focus on shared standards and high-integrity credits addresses concerns about environmental effectiveness, a point of particular interest for compliance-oriented emitters and policymakers in North America. In addition, the operationalization of the PACM under the Paris Agreement may have potential implications for North American participants. Although Canada and US carbon pricing programs are already evolving, Article 6.4 could provide opportunities to access internationally recognized carbon credits for compliance or voluntary purposes. It may also influence accounting and reporting practices, particularly if North American firms seek to participate in cross-border carbon transactions or align with emerging global standards for credit quality and additionality. Hence, awareness of Article 6.4 developments can inform strategic planning and market participation decisions.
Finally, the discussion over CBAM is highly relevant to North American exporters. As the EU mandates border adjustments for carbon, there will be new compliance risks and opportunities, especially for resource-intensive sectors. Canadian firms in emissions-intensive, trade-exposed (EITE) industries may face direct impacts on their carbon management strategies due to these developments. The CBAM directly affects industries where production is carbon-intensive because importers must account for the embedded emissions of their goods. For North American exporters, this affects sectors such as steel, aluminum, cement, and chemicals. Firms in these industries, that are exporting to Europe, will need to track and report the carbon intensity of their products. Consequently, these updates from COP30 signal that North American market participants should prioritize monitoring global trends and anticipate the wider impact of changing international rules on their own carbon pricing strategies.
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