COP30 Week One: What Australian businesses need to know

The first week of COP30 in Belém, Brazil, has set the stage for transformative climate action – and Australian businesses are squarely in the frame. From adaptation metrics to climate finance and energy transition, the outcomes and debates carry direct implications for sectors ranging from agriculture and mining to finance, construction, and clean tech.

Framing the negotiations

Despite the obvious geopolitical tensions, there was a general consensus among the parties to highlight a collective commitment to the Paris Agreement and continue to pursue a multilateral approach to addressing climate change. This led to the relatively swift adoption of the formal agendas so as to launch substantive negotiations, on the basis that the COP Presidency would facilitate consultations on the additional items proposed by individual groups or parties, which included consultations on:

• the implementation of Article 9 of the Paris Agreement relating to developed countries' finance provisions obligation;

• what have been described as "unilateral trade measures", a reference to the EU and UK's carbon border adjustment mechanisms (CBAMs) which commence in 2026;

• how to respond to the synthesis report on NDCs which showed that although progress had been made through the recent updates by parties to their NDCs, there was still a gap to keep the Paris goals in reach. The Presidency is reluctant for parties to start pointing fingers at any country who's NDCs is viewed as sub-optimal; and

• the synthesis of biennial transparency reports (BTRs). BTRs are a critical transparency measure agreed at Paris by which parties are required to report on a number of matters including progress towards implementing NDCs. Issues with the quality and timeliness of BTRs have been identified, illustrating the challenge, particularly for developing countries, of establishing consistency in reporting.

During the first week, consultations on these matters were held but without any substantive conclusion. Plenaries scheduled on Saturday at which the COP Presidency was to give an update on progress were repeatedly postponed. The second week may resulting in a landing being reached on some of these issues.

In relation to the formal agenda items for negotiation, the remaining work of the subsidiary bodies intended to inform some of those negotiations aimed to be wrapped up at the end of the first week, while informal consultations were undertaken to progress others. Draft texts of decisions were progressed where possible in advance of Ministers arriving for week two for formal decision. Separately, there were also discussions outside the formal process focused on the Brazilian Government's Action Agenda. Below is a brief state of play of some of the key issues.

Carbon markets

COP30 is focused on implementing the carbon markets established under Article 6, being the bilateral arrangements under Article 6.2 which generate Internationally Transferred Mitigation Outcomes, and the UN supervised sustainable development mechanism under Article 6.4. It is no surprise therefore that focus has been on the receipt of reports prepared by the UNFCCC Secretariat and the Article 6.4 supervisory body relating to those mechanisms respectively. While the guidance for projects under Article 6.2 will not be reviewed until 2028, reports of countries participating in bilateral arrangements under that article are under review with the intention to put some more common elements to projects, particularly in relation to environmental integrity. Draft decision text was out for informal consultation, with attention on Article 6.4 focused on issues associated with some more onerous obligations for land-based projects and review of certain safeguard standards adopted in 2025.

The closure of the Clean Development Mechanism established under the Kyoto Protocol appears closer with the likelihood that surplus funds will be redeployed such that the mechanisms under Article 6 represent the future of international carbon markets.

Adaptation metrics

There is a clear push to finalise indicators for the Global Goal on Adaptation (GGA) at COP30. Australia has during the negotiations in Belém pressed for the 100 indicators to be adopted so that progress on adaptation can start being tracked, and feed into the next Global Stocktake. This aligns with Australia's own recently released National Adaptation Plan which seeks to showcase an evidenced based approach to inform best practice.

Australian companies in agriculture, insurance, and infrastructure may need to align with any agreed adaptation indicators to assess exposure to climate risks like droughts, floods, and bushfires. As investors increasingly expect transparent reporting on climate resilience, the GGA indicators could become part of future reporting frameworks.

Climate finance

Finance discussions dominated the first week and, as is often the case, straddled many of the COP agenda items. Foremost was discussions around the new collective quantified goal (NCQG) on climate finance. The decision at Baku during COP29 to set the NCQG at USD 300 billion, but with the aim to chart a path to quadruple that figure to US$1.3 trillion per year by 2035, set the scene for negotiations on how this aspirational target could be reached through the Baku to Belém Road Map.

Debate remained fixated on whether the finance would simply be a form of State grant funding from the "global north" to the "global south" or leveraged to include different forms of finance including from private sources. Indications are that text drafting is tending to the latter.

Discussions also progressed on transitioning the Adaptation Fund to exclusively serve the Paris Agreement. This could streamline funding mechanisms and improve access for countries like Australia’s Pacific neighbours, particularly to the share of proceeds from Article 6.4.

Mitigation

The subsidiary body continued informal consultations on the Mitigation Work Programme (MWP) and invited parties views on a draft informal note to be considered in week two. The draft text included reference to the 1.5 degree goal, which was supported by many countries but opposed by others including Russia and the Arab group on the basis that the goal had already been exceeded. Also featuring in the debate were questions about climate science and the role of the Intergovernmental Panel on Climate Change. Australia has made clear in the negotiations the need to focus on making the MWP more effective including identifying opportunities for mitigation actions in specific sectors such as waste.

Just transition

A draft informal note on the Just Transition Work Programme was tabled at the meeting of the subsidiary body which met with general acceptance, something that could not be achieved at COP29. However, key points of difference emerged along geo-political lines on the following:

• reference to UTMs, which was objected to by the EU and UK as an unfair characterisation of CBAMs which they contend are a climate, not a trade, measure; and

• reference to the parties "transitioning away from fossil fuels" and related references to "transition fuels".

Russia also voiced concern that the draft text did not capture any negative aspects of renewable energy. Whether references to energy transition and related concepts stay in the draft text remains to be seen, but devising a decision text for just transition could end up being one of the more contentious agenda items at COP30.