Five things to watch at COP30

COP30 represents a critical juncture for global climate policy. Billed as 'the implementation COP', priority topics in Belém include a just transition, carbon pricing and expanding low-carbon investment. But this COP will also face several hurdles, including rising energy prices, policy uncertainty and trade barriers.

As Belém's ambitions meet the challenges of accelerating decarbonisation, there are five areas to watch at COP30:

1. Net zero is becoming harder, but the tools to tackle it are expanding

As part of the Paris Agreement, countries submit decarbonisation targets via nationally determined contributions (NDCs). The Global Stocktake in 2023 confirmed a huge gap between NDCs and a 1.5°C pathway – also highlighted in our latest annual energy transition outlook. NDC updates due at COP30 are likely to become more ambitious as they extend carbon reduction goals from 2030 to 2035, a critical timeline for reducing emissions.

However, at the time of writing, countries that produce the equivalent of two-thirds of global emissions have not submitted their NDCs, resulting in a reliance on earlier NDCs to inform policy discussions. The absence of the US from COP30 is another hurdle, threatening multilateral climate programmes.

There are also strong tailwinds for progress. Around 83 carbon regimes are operational, with a further 52 under development. In our base case outlook over the next decade, net new capacity installations of wind, solar and energy storage outpace gas-fired power capacity, while EVs are expected to be 25% of the global vehicle stock.

2. Implementing Article 6 rests on several key variables

Article 6 is intended to create carbon markets attracting investment in nature-based solutions, zero-carbon power and carbon sequestration. COP29 established the framework for international carbon markets, with 89% of Paris Agreement countries planning to use Article 6 to reach their NDCs.

For Article 6.2, which permits government emissions trading, implementation focuses on the International Registry and national platforms managing Internationally Transferred Mitigation Outcomes. For Article 6.4, enabling private sector participation, COP30 must address carbon accounting standards under the Paris Agreement Crediting Mechanism.

We also expect Belém to prioritise nature-based offsets. Brazil's Tropical Forests Forever Facility (TFFF), launched at COP28, provides revenue streams based on forest area. Ten partner countries are developing TFFF with World Bank management. Brazil's COP30 leadership expects that TFFF could generate US$4 billion in revenue per year.

3. China's new climate targets: a floor, not a ceiling, for renewable power

At the UN Climate Summit in 2025, China's President Xi Jinping unveiled new national climate commitments that target a 7-10% reduction in emissions by 2035 from peak levels, make EVs the mainstream of new automobile sales and expand wind and solar capacity sixfold over 2020 levels.

Likely to be the core of China's next NDC, these goals represent a floor of what’s possible, not the ceiling. China has a track record of beating expectations, achieving its last NDC for renewable power around six years early. We believe China is set to outperform again: between 2020 and 2035 we expect around 1,000 GW more renewable capacity than China's new targets.

While China's pledges provide important signals, its supply chain investments will have a larger impact on the global energy sector. Between 2025 and 2035, we expect investment in China's energy sector to expand dramatically. Across wind, solar and battery storage, China will be the dominant supplier through 2035. 

4. The US: out of Paris, but not out of decarbonisation

President Trump's Paris withdrawal marked a seismic federal policy shift but doesn't end US decarbonisation efforts. Far from it. We expect states and private companies to maintain focus on decarbonisation policies.

Several of the largest states in the US are expected to participate in COP30, using the platform to communicate energy policies, procurement goals and clean energy investment plans. The US Climate Alliance has historically sent delegations that have included California, New York and Washington state to COP. The 24 member states across the alliance have outpaced the national average in net emissions reductions by 8% between 2005 and 2023, according to its figures.

As AI power loads risk higher energy prices for consumers, expect US states to reiterate renewable commitments at COP30. According to our Lens Power & Renewables platform, the US will need GW scale investments new solar and wind capacity through 2035. In an era of rising power prices, renewable power is still the lowest-cost option to meet power demand.

5. Brazil will champion sustainable fuels at COP30, but will still spend big on upstream

Brazil faces a fundamental contradiction as it prepares to host COP30: leading the world in sustainable fuels while simultaneously planning an expansion of its upstream sector. This tension reflects the complex realities facing large energy markets and companies.

Brazil's latest NDC targets 59% net greenhouse gas emissions reduction by 2035. Petrobras plans US$11 billion in low-carbon energy from 2025 to 2029, with US$8 billion in biofuels.

At COP30, watch for The Belém Commitment for Sustainable Fuels (Belém 4x), intended to quadruple the production and use of sustainable fuels, including hydrogen and its derivatives, biogases, biofuels and synthetic fuels by 2035. Brazil is a global leader in sustainable drop-in fuels that lower the carbon emissions of combustible fuels, such as gasoline and diesel, and is the second-largest global market for biofuels, behind the US.

The elephant in the room is Brazil's burgeoning upstream sector. Petrobras committed US$77 billion to double domestic production by 2030 – seven times larger than its low-carbon budget. Even with low-carbon investments, we expect Brazil's domestic economy to remain at least 70% hydrocarbon in 2035.

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