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Consensus was achieved at the COP29 summit on providing USD 300 billion per year in financial assistance to the poorer and most vulnerable countries and rolling out a global carbon market, alongside a series of declarations. But they still fall short of required climate targets.

Negotiators traditionally went into overtime at the United Nations Climate Change Conference COP29 – and churned out the Baku Climate Unity Pact. It includes the New Collective Quantified Goal (NCQG) for Climate Finance. It will also be known as the Baku Climate Finance Goal.

The talks were expectedly tense. At one point, representatives of island states and other countries imperiled by climate change left the table. Eventually, the most vulnerable group accepted a pledge to get at least USD 300 billion a year in financial assistance until 2035. It is USD 50 billion more than in the draft.

Developed countries only recently delivered on the commitment to provide USD 100 billion per year. But the vulnerable part of the world actually needs more than USD 1 trillion every year.

While rich countries are racing to decarbonize by mid-century or earlier, others are in thirst, some literally, for the basics. They face devastating heat, drought, wildfires and flooding. Rising sea levels may soon wipe out countless inhabited islands and alter the world’s coastlines. Jeopardized regions also require funding for renewables, mechanisms to protect lives, livelihoods and nature and to adapt agriculture and infrastructure.

Biden sees climate finance as tool to sell US products

With a one-and-a-half-day delay, envoys agreed as well on a broader package of USD 1.3 trillion per year. The USD 300 billion sum is based on grants and subsidized loans, while private financing and climate taxation dominate the rest.

“It will help mobilize the level of finance – from all sources – that developing countries need to accelerate the transition to clean, sustainable economies, while opening up new markets for American-made electric vehicles, batteries, and other products… While some may seek to deny or delay the clean energy revolution that’s underway in America and around the world, nobody can reverse it — nobody,” outgoing United States President Joe Biden pointed out.

Private investments and commercial loans are likely to dominate the sum of USD 1.3 trillion per year pledged for poor and most vulnerable countries

Multilateral development banks (MDBs) announced projections for their contributions to climate action as USD 170 billion per year by 2030, of which USD 120 billion for low- and middle-income countries.

For instance, China is active overseas through climate finance development agencies, multilateral development banks, climate funds, export credits and bilateral loans. The country avoided specifying figures and purposes and opted to participate on a voluntary basis.

Notably, the USD 300 billion level wouldn’t be adjusted for inflation.

“The Baku Finance Goal represents the best possible deal we could reach,” COP29 President Mukhtar Babayev claimed. He is Azerbaijan’s minister of ecology and natural resources.

The Loss and Damage Fund is becoming operational as early as next year. The idea behind it is to mitigate the consequences of climate disasters and bolster adaptation in vulnerable regions. But the war chest amounts to a mere USD 730 million, for now.

Saudi Arabia stifles fossil fuel phaseout hawks

Slovenia’s Minister of Environment, Climate and Energy Bojan Kumer warned that existing agreements and policies wouldn’t curb global warming at less than three degrees Celsius by the end of the century. Scientists prevalently see the level as catastrophic, with irreversible consequences.

The consensus is that the rise needs to be limited to 1.5 degrees. Global temperatures already surpass the threshold regularly on daily, monthly and even annual scales. However, some still believe the long-term average can be returned below the critical point.

At the same time, Saudi Arabia managed to sideline the efforts to phase out fossil fuels, according to climate diplomats. The goal is not even mentioned by name in the final document, diluting the initiative. The Conference of the Parties of the UN Framework Convention on Climate Change (UNFCCC), which is the international body’s official name, only reaffirmed the conclusions from COP28.

Kumer expressed disappointment at the lack of concrete commitments for a faster reduction of greenhouse gas emissions and the gradual elimination of fossil fuels. Nevertheless, he emphasized the importance of continued cooperation with countries within the so-called High Ambition Coalition.

The conference also approved a document on gender equality, calling for greater assistance to girls and women in the climate crisis, Kumer’s ministry said. Unfortunately, the language regarding gender equality and human rights was not sufficiently included in the other texts of the decisions, as the European Union sought, it added.

Global CO2 market nearing launch

One major breakthrough at COP29 was the new framework for a global carbon market under UN supervision. It allows countries and companies to purchase and trade certified emissions allowances. Article 6 of the 2015 Paris Agreement facilitated the mechanism. Technical details remain.

Financial flows from compliant carbon markets could reach USD 1 trillion per year by 2050, the COP29 Presidency said. They also have the potential to reduce the cost of implementing national climate plans by USD 250 billion per year, it added.

The summit’s leadership urged the parties-governments to reinvest the savings in scaling their climate ambitions.

COP29 operationalized an international carbon credit scheme to direct financial flows to the developing world and reduce the cost of implementing national climate plans.

After a decade of talks, envoys operationalized the carbon credit scheme to direct financial flows to the developing world and reduce the cost of implementing national climate plans.

Article 6.4 standards define reliable and transparent carbon markets. Among other points, a deal on 6.8 facilitates international cooperation through non-market approaches.

Trust in provisional international and bilateral carbon dioxide certificates has deteriorated. There have been cases of major fraud while some emission offsetting technologies and methods proved to be unreliable or ineffective. Skeptics are pointing the finger at the fossil fuel industry and arguing that planting trees and capturing emissions are excuses for companies to maintain business as usual.

A global mechanism could create an asset category out of preserving rainforests, national parks and ecosystems. Delivery and effects are anyone’s guess, though.

New climate, decarbonization initiatives

With endorsers from over 50 countries, the COP29 Declaration on Water for Climate Action calls for an integrated approach to combating the causes and impacts of climate change on water basins and water-related ecosystems. It advocates integrating water-related mitigation and adaptation measures in national climate policies.

More than 50 maritime shipping industry actors agreed to accelerate zero and near-zero emission fuels by 2030.

As part of a USD 193 million package for clean energy endeavors, the United Kingdom supported clean cooking for 10 million people across Sub-Saharan Africa, South Asia and the Indo-Pacific, to leave coal and wood cooking behind.

All G20 countries now have net zero targets

Twenty five countries and the EU indicated they would commit to a policy of no new unabated coal power plants. The initiative is to include the decision in their nationally determined contributions before COP30.

The group includes 13 EU member states: Austria, Belgium, Cyprus, Czech Republic, Denmark, France, Germany, Italy, Malta, the Netherlands, Slovakia, Slovenia and Sweden, as well as Norway and the UK.

Over 50 countries endorsed the Reducing Methane from Organic Waste Declaration. Eight are among the world’s largest organic waste methane emitters and represent 51% of global methane emissions from organic waste.

Mexico vowed to eliminate net greenhouse gas emissions by 2050, meaning all members of the Group of Twenty (G20) have committed to a net zero target.

The European Parliament voted in Ursula von der Leyen’s second European Commission, with a mandate until 2029. Much of her team, including Executive Vice President Teresa Ribera and European Commissioner for Energy and Housing Dan Jørgensen, is tasked with the green transition and climate policy.

The European Union wants to maintain the rapid pace of decarbonization while enabling affordable energy prices for the industry and households. The new top officials aren’t enthusiastic about funding nuclear energy projects, but Jørgensen did confirm support for research including for small modular reactors.

Innovation, decarbonization and security (with energy security) – European Commission President Ursula von der Leyen presented the pillars of the policy framework for the new College of Commissioners. The European Parliament voted for the lineup at a plenary session in Strasbourg with 370 lawmakers in favor, 282 against and 36 abstentions.

The first major initiative is the Competitiveness Compass, Von der Leyen revealed. She explained the EU needs to close the innovation gap with the United States and China. Another priority is a joint plan for decarbonization and competitiveness, and the third is increasing security and reducing dependencies.

The EU has some of the most ambitious goals for the green transition in the world. After already stretching its finances in the previous mandate to overcome the impact of the pandemic and work on economic resilience, the 27-member bloc is struggling to maintain the pace.

It is jeopardized by deindustrialization, with high energy prices among the major factors. Therefore, there is a tough tradeoff between climate goals and competitiveness.

Von der Leyen: Success in green transition depends on strengthening people, businesses

The European Commission will start by unlocking the financing needed for the green, digital and social transition, according to Von der Leyen. Everyone in the team will contribute to achieving the main goals, she pointed out. The head of the EU’s executive arm also highlighted the plan to publish the Clean Industrial Deal within the first 100 days.

“We must and will stay the course on the goals of the European Green Deal. But if we want to be successful in this transition, we must be more agile and better accompany people and business along the way. And we need to play to our traditional strengths – our industries and SMEs, our innovators and our workers,” Von der Leyen told European parliamentarians.

At least a third of the new commission is directly responsible for the green transition and climate policy, but its chief stressed the need for everyone to contribute

At least a third of the new commission is directly responsible for the green transition and climate policy. It includes Executive Vice President for Clean, Just and Competitive Transition and Commissioner for Competitiveness Teresa Ribera, and European Commissioner for Energy and Housing Dan Jørgensen.

“We have done a lot to respond to Russia’s energy blackmail and the high inflation that followed. But the price of energy has to go down further. And this is what Dan Jørgensen will be working on, building on his previous experience. To bring down costs for households and companies. To invest in clean energy. And to replace Russian LNG imports,” Von der Leyen stressed.

Energy policy is at core of all challenges in Europe

At his confirmation hearing, Jørgensen said energy policy is at the core of all the challenges Europe currently faces – on competitiveness, jobs, growth, security with the war in Ukraine, climate change and social justice.

European companies pay two to three times more for energy than their competitors in the US and China while 10% of Europeans are not able to heat their homes adequately during winter, he added. Jørgensen vowed to lower the prices for the industry and people as a top priority.

Companies pay two to three times more for energy in the EU than in the US and China, Jørgensen warned

He also pledged to boost the deployment of renewables via faster permitting procedures, expand energy grids, develop interconnectors, boost carbon capture and storage (CCS), energy storage technologies and power-to-X or PtX solutions.

Southeastern Europe is, notably, suffering the most from energy price volatility and is in urgent need of more interconnection and storage capacities.

The new energy commissioner promised to come up with a strategy on geothermal energy. As for green hydrogen, he acknowledged a lot of work remains to establish an actual market. “We cannot afford to not have a 100 percent focus on speeding this up,” Jørgensen underscored.

Ribera highlighted water resilience, just transition among main tasks

In light of the devastating floods in Valencia and much of Spain, the European Commission’s Executive Vice President Teresa Ribera told members of the European Parliament before confirmation that it is necessary to do more on the EU’s resilience to extreme weather events. She put an emphasis on early warning systems and the response ability.

At her hearing, she promised a new European Climate Adaptation Plan to address those issues. Ribera also committed to making water resilience a priority.

Support is underway for industrial decarbonisation and a just transition including housing and quality jobs, she asserted.

Dependence on Russian nuclear fuel hindering energy security

The new top officials noted that the EU plans to cut greenhouse gas emissions by 90% from the 1990 level by 2040. It is a key milestone toward achieving carbon neutrality by mid-century.

While the EU formally supports the expansion in the nuclear energy segment, they showed little enthusiasm about funding, especially the projects based on conventional technology.

The new commissioner advised the nuclear energy industry to lean on private financing

In Jørgensen’s opinion, it is best to back a surge in private funding. “I don’t see it as the role of the European Union … to fund the building of a nuclear power plant,” he has told MEPs.

On the other hand, he confirmed support for scientific research. Jørgensen is also tasked with facilitating the development of small modular reactors (SMRs).

He warned against increasing Europe’s dependence on the nuclear industry and fuels-related foreign supply chains, notably Russia. The then-commissioner-designate said the issue would be addressed in an upcoming SMR strategy.

While the EU will respect the energy mix in every country, nuclear energy will be needed to achieve the climate transition and will be part of the commission’s clean energy plans, Jørgensen clarified.

From this year, businesses in Croatia are required to submit sustainability reports. The first round covers 50 companies.

The Ministry of Finance, which is responsible for sustainability reporting in Croatia, has published a list of companies obligated to send documentation for the business year starting on or after January 1, 2024.

The rule was introduced by the Accounting Act, within which the country transposed the European Union’s Corporate Sustainability Reporting Directive (CSRD) into the national legislation, the Croatian Chamber of Economy (HGK) said.

Reporting is mandatory for all large public interest companies including parent companies of large groups designated as public interest entities, together with credit institutions and insurance or reinsurance companies with over 500 employees.

Utilities are exempted from the obligation to report in the first round

The ministry published an indicative list of firms for the second round of sustainability reporting. They will report in 2026 for the business year starting from January 1, 2025. They were included based on the data for the last day of the business year 2023 while the final list will be based on the last day of 2024.

Public utilities are exempted from the obligation to report in the first round, but they are joining the group next year.

HGK has introduced the Croatian ESG rating as a model for sustainable practices evaluation

Of note, the European Commission adopted the European Sustainability Reporting Standards (ESRS) in August 2023. But the rules were criticized for “watering down” the sustainability reporting requirements and paving the way for greenwashing.

HGK organizes ESG Academy workshops to prepare companies for sustainability reporting. It has also prepared an ESG guide where the firms can find all the key information on ESG factors, key regulation and strategic guidelines, sustainable financing, and ESG rating.

In July last year, the chamber introduced the Croatian ESG rating as a model for evaluating sustainable activities in the corporate sector.

HGK has called on companies to use the tool as part of preparations for the sustainability reporting.

The Montenegrin coal power plant Pljevlja should be shut down by 2041, according to the draft National Energy and Climate Plan.

The Ministry of Energy of Montenegro prepared and submitted the draft NECP to the Energy Community Secretariat for a review, Minister of Energy Saša Mujović said, as reported by Vijesti.

He pointed out that Montenegro needs EUR 1.1 billion to achieve all the goals set in NECP. It is a heavy financial burden for the government and makes 2030 goals unachievable, so it is asking for its obligations to be eased.

The Ministry of Energy has officially asked the secretariat in August to reconsider Montenegro’s 2030 climate and energy goals.

Electricity prices must reach 16-17 euro cents per kilowatt-hour

Montenegro is obliged to reduce greenhouse gas emissions by 55% to 2,400 kilotons of carbon dioxide equivalent, which means introducing strict measures in the electricity and transport sectors. It is necessary to build many renewable electricity plants, introduce electric cars, modernize public transport, and introduce a mandatory share of biofuels, the minister added.

Mujović explained that Montenegro suggested the 2041 deadline for TPP Pljevlja to secure time to install new power plants.

He announced that by the end of the year, the government would determine subsidies for the electricity sector to prevent price increases. However, according to Mujović, the price of electricity must rise by 2027 toward the EU average, which is 27-28 euro cents per kilowatt-hour.

The current price is around ten euro cents.

The price will increase to 16-17 euro cents and reach Croatia’s average, Mujović estimated, adding that socially vulnerable categories would be assisted.

The authorities have prepared a solution for the second cable of the submarine power link

The Ministry of Energy and the Montenegrin TSO CGES have prepared the final solution to unblock the laying of the second cable of the submarine power link between Montenegro and Italy, with a capacity of 1,000 MW. The project part of the Trans-Balkan Electricity Corridor.

He failed to reveal the details but promised that the issue would be solved by the end of the year.

Two major obstacles are the legal status of properties along the corridor route and the planning documentation for the Pljevlja – Bajina Bašta transmission line.

He recalled that a feasibility study is underway for electricity storage projects. The locations are within hydropower plant Perućica, the former Željezara Nikšić steel plant and the Pljevlja coal mine.