P2N0 - Edition 37 - News And Views On The Drive Towards Net-Zero GHG Emissions

Welcome to Edition 37 of P2N0 covering the drive to avoid, reduce and remove greenhouse gas (GHG) emissions to progress to net-zero GHG emissions (NZE).

P2N0 covers significant news items globally, reporting on them in short form, focusing on policy settings and legal and project developments and trends.

This Edition 37 covers key news items arising during the period commencing October 16, 2025, through November 9, 2025.

Edition 38 will cover COP-30 to be held between November 10, 2025, and November 21, 2025.

As previously, P2N0 will not cover news items about M&A activity, or that are negative.

Access previous editions of P2N0 at bakerbotts.com.

KEY NEWS ITEMS FROM OCTOBER 16 TO NOVEMBER 9, 2025

• Thirtieth Conference of Parties of the United Nations Convention on Climate Change (COP 30) – 10 years and counting ...

As noted above, COP 30 is to take place between November 10, 2025, and November 21, 2025, in Belém, Brazil. For daily reports on COP 30 see https://unfccc.int/ unfccc.int, https://photos.unfccc.int/?_gl=1*d98xc4*_ga*MTY1MDM0MDgxNS4xNzYxODc4NTM5*_ga_7ZZWT14N79*czE3NjI3NDI0MjEkbzIkZzEkdDE3NjI3NDI0MzIkajQ5JGwwJGgw Daily Photo Highlights.

Ahead of November 10, 2025, the following issues and news are noteworthy:

• On November 7, 2025, at the COP 30 Leaders' Summit, United Nations Climate Change Executive Secretary, Simon Stiell, issued a call "for faster, fairer delivery of climate action and finance". The Climate Change Executive Secretary reflected that in while in 2024 ... "two trillion dollars flows into renewables – twice as much as fossil fuels ... [with 90%] of new power capacity worldwide ... renewable ", increased and accelerated climate plans and climate finance" are needed. (See the full text of the speech at https://unfccc.int/news/paris-agreement-proves-that-global-cooperation-is-delivering-progress-but-must-work-faster-and unfccc.int, Paris Agreement proves that global cooperation is delivering progress but must work faster and fairer for everyone.)
• On November 5, 2025, EU Climate Ministers agreed a 2040 GHG emissions reduction target, which provides for a reduction of 90% of GHG emissions by 2040 compared to 1990. In a move away from the position outlined in proposed legislation on July 2, 2025¹, the EU Climate Ministers agreed to allow EU Member States to purchase carbon credits from countries outside the EU to match up to 5% of the 2040 emission target of a 90% reduction. The effect of this is that EU Member States may be regarded as having domestic obligations to reduce GHG emissions by 85% in fact, with 5% to be achieved through offsetting.

A good deal of comment has flowed from the agreement to allow this offset, most of it stating that this will weaken the EU GHG emission reduction target. This will not be the case if each carbon credit represents one metric tonne of CO2-e removed from the climate system. In the context of the continued finalization of Article 6.4 of the Paris Agreement, this may be regarded as good news. In passing, it is noted that the EU offset policy setting is consistent with that of Singapore's.

By way of reminder: As stated in https://www.bakerbotts.com/thought-leadership/publications/2025/october/p2n0---edition-36---news-and-views-on-the-drive-towards-net-zero-ghg-emissions Edition 36 of P2N0: "

At the core of the concept of the creation of any carbon credit is that:

• the carbon credit represents one tonne of CO2-e of GHG emissions (avoided, reduced or removed from the climate system though a mitigation activity); and
• the carbon credit can be used to offset one tonne of CO2-e of GHG emissions, and that corporations or other organizations place value on "high-integrity" carbon credits that allow this offset."

Logically, this requires additionality, i.e., the mitigation activity giving rise to the avoidance, reduction or removal is in addition to "business-as-usual", and the avoidance, reduction or removal must be permanent. This may be regarded as current orthodoxy.

The challenge with many nature-based solutions (N-B Ss) is that they are not permanent – for example, in the case of CO2 captured by afforestation or reforestation, while the mitigation is additional, it is not permanent because on death of a tree, GHG emissions will be emitted as organic matter decomposes².

This is the core of the debate about permanence. This debate (and each issue related to it) is not new.

Note: The following is text taken from presentations given by the author since 2019, including in the context of explaining the long-term role of carbon capture and storage as a permanent technology, rather than as a bridging technology only as framed under the European Union CCS Directive³.

Ahead of speaking at the IICCS Conference in Jakarta, Indonesia, October 7 and 8, 2025, the author had cause to reflect that the issue of permanence remains the same, as does the conceptual solution.

Corporations and other organizations acquire carbon credits so as to avoid having to avoid, reduce or remove GHG emissions here and now. From a policy setting perspective, corporations and other organizations should acquire carbon credits at a point in time where they are no longer able to avoid, reduce or remove GHG emissions by adopting low, lower and no carbon technologies. In this context, the carbon credits must be permanent, or the basis of the accounting for them must recognize if they are not permanent, and provide a basis for continued avoidance, reduction or removal [arguably in respect of both the GHG emissions arising from the continued activities giving rise to GHG emissions and the GHG emissions arising from the decomposition of the organic matter].

If a corporation or other organization acquires a carbon credit to defer the timing of investment to adopt a lower, low or no carbon technology, the issue of permanence is different because the corporation or organization should not be seeking to account for avoidance, reduction or removal on a permanent basis.

In short, this issue of permanence is neither an "either or" nor a "one sizes fits all" answer."

• In the lead up to COP 30 many and varied views have been expressed relating to expectations. Set out below may be regarded as the top four:
• Each contracting state under the Paris Agreement is required⁴ to prepare and to communicate its third nationally determined contribution (NDC 3.0) during 2025. The scheme of the Paris Agreement is that all NDCs, taken together, will be consistent with "holding the increase in global average temperatures to well below 2OC above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5OC above pre-industrial levels".

As things stand, the common consensus is that all NDCs, taken together, will not be sufficient to achieve the objective of the Paris Agreement (the Reduction Gap). On this basis, it is hoped that COP30 will agree on how best to address the Reduction Gap.

This may be regarded as the most pressing issue. It is noted that as of the end of October 2025 64 (out of 195) countries had submitted their NDC 3.0s. Stating the obvious, absent two-thirds of NDC 3.0s it is difficult to determine the Reduction Gap, suffice it to say, the Gap is material.

• Each contracting state under the Paris Agreement is required⁵, as appropriate, to have a National Adaptation Plan (NAP). While countries have NAPs the implementation of those NAPs be regarded as limited. It is expected (and hoped) that the COP 30 will provide impetus from planning to implementation.

For these purposes, it is expected that the Global Goal on Adaptation (GGA) will be one of the key agenda items at COP 30. The GGA is intended to guide progress globally, providing a clear or clearer basis for planning and implementation. Edition 38 of P2N0 will report on progress towards a coherent GGA.

• Article 9 of the Paris Agreement provides that: "Developed country Parties shall provide financial resources to assist developing country Parties with respect [both to] mitigation adaptation in continuation of their existing obligations under the [IPCCC]⁶".

It is fair to say that one of the most contentious issues is the commitment of financing from developed country Parties to developing country Parties to allow developing country Parties to implement mitigation and adaptation measures.

While at COP 29 the New Collective Quantified Goal (NCQG) was agreed, the commitments from developed countries is below the estimated level of commitment of USD 1.3 trillion required to allow developing countries to address climate change (funding gap). The presidents of COP 29 and COP 30 are working together to develop a plan to outline how to close the funding gap (Funding Gap Plan).

It is expected and hoped that the Funding Gap Plan, and that actions will be agreed to progress the Funding Gap Plan to a point at which it can be negotiated and agreed.

On October 30, 2025, it was reported widely that Brazil is seeking to secure increased funding commitments for developing countries. The https://www.unep.org/resources/adaptation-gap-report-2025 UN Adaptation Gap Report estimates that it will be necessary to provide considerably more funding to achieve adaptation because of climate change; it is estimated USD 310 billion a year is needed to adapt so as to respond to the impact of rising sea levels and the results of other climate change impacts.

The EU has committed that greatest amount to assist developing countries and is urging other countries to commit to greater levels of funding. The EU has invited China, the Gulf States and Singapore to make greater commitments. It is to be noted that in the absence of the US (having withdrawn from the Paris Agreement) if the levels of funding required are to be achieved, the EU and other countries will have to increase their commitments.

• The Advisory Opinion of the International Court of Justice or ICJ (handed down on July 23, 2025), among other things, provided the opinion of the ICJ on the possible liability of states for loss and damage resulting from non-compliance by states with their obligations under the Climate Change Treaties, for an internationally unlawful act⁷. While the basis for any claim by one state against another state for an internationally unlawful act may be regarded as theoretical only, loss and damage to the climate system is real.

Whether intended or not to avoid claims by one state against another state, the Fund for Responding to Loss and Damage (FRLD) is expected that at COP 30 momentum will arise to allow the FRLD to become operational. This will be facilitated at COP 30 by the launch of the process under which funding requests may be made. It is understood, that up to USD 250 million will be made available from the FRLD.

Footnotes

1 On July 12, 2025, the EU decided not to allow offsets until 2036 at the earliest: the stated policy driver for this was that lower, low and no carbon technologies should be maximized, and only those activities that could not be decarbonized should be able to offset.

2 Carbon Capture and Storage involves the capture of CO2 that would otherwise be emitted to the climate system and the storage of that CO2 (sequestration) permanently and securely in a geological formation. This avoids the emission of CO2 into the climate system. Carbon Capture and Use involves the capture of CO2 that would otherwise be emitted to the climate system, and the use of it for an industrial use, including to produce products that do not store CO2 permanently. Carbon Dioxide Removal or CDR involves the removal of CO2 that is already in the climate system (from the climate system) and the storage of the CO2 in a more stable form of carbon, which is not permanent. This removes CO2 emissions already in the climate system. N-Bs may be regarded as CDR.

3 Directive 2009/31/EC of the European Parliament and of the Council of 23 April 2009 on the geological storage of carbon dioxide and amending Council Directive 85/337/EEC, European Parliament and Council Directives 200/60/EC, 2001/80/EC, 2004/35/EC, 2006/12/EC, 2008/1/EC and Regulation (EC) No 1013/2006.

4 Article 3 of the Paris Agreement provides: "As nationally determined contributions to the response to climate change, all Parties are to undertake and to communicate ambitious efforts as defined in Articles 4, 7, 9, 10, 11 and 13 with a view to achieving the purpose of this Agreement as set out in Article 2. The efforts of all Parties will represent a progression over time, while recognizing the need to support developing country Parties for the effective implementation of this Agreement". Article 4.2 provides "Each Party shall prepare, communicated and maintain successive nationally determined contributions that it intends to achieve. Parties shall pursue domestic mitigation measures, with an aim of achieving the objectives of this Agreement. Article 4.3 provides that: "Each Party's successive nationally determined contribution will represent a progression beyond the Party's then current nationally determined contribution and reflect its highest possible ambition, reflecting its common but differentiated responsibilities and respective capabilities, in light of different national circumstances"

5 Article 7, paragraph 10 of the Paris Agreement provides: "Each Party should, as appropriate, submit and update periodically an adaptation communication, which may include its priorities, implementation and support needs, plans and actions, without creating any additional burden for developing country parties."

6 These obligations are: (a) for Parties to adopt measures with a view to mitigate and to adapt to climate change; (b) for developed countries to lead in combating climate change by limiting their GHG emissions and enhancing their sinks and reservoirs; and (c) for Parties to cooperate with each other to achieve the objectives of the UNFCCC, detailed in Article 2.

7 The ICJ defined the Climate Change Treaties as being the UNFCCC, the Kyoto Protocol and the Paris Agreement.

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