COP29 and Its Implications for Carbon Capture and Storage Technology

By Reza Maddahi, PhD Researcher

The 29th Conference of the Parties (COP29) to the United Nations Framework Convention on Climate Change (UNFCCC) concluded in November 2024 in Baku, Azerbaijan. Billed as a ‘technical COP’, this conference focused primarily on solidifying financial mechanisms and technical rules within the Paris Agreement framework. Key outcomes included the establishment of the ‘new collective quantified goal’ (NCQG) for climate finance, updates on nationally determined contributions (NDCs), progress on international carbon markets, and a slew of thematic pledges. These developments are particularly consequential for Carbon Capture and Storage (CCS) technology, which stands at the intersection of emissions reduction and sustainable development.  
This blog examines the COP29 outcomes with a focus on how they could shape the CCS landscape. By analyzing the conference’s decisions on climate finance, carbon markets, and other pledges, the blog explores the opportunities and challenges for advancing CCS technology globally.

What happened at COP29?

Key goals

The conference aimed to advance two main agenda items:

Increasing ambition: Countries were urged to submit more ambitious NDCs by 2025 to align with the 1.5°C global warming target.

Establishing a New Climate Finance Goal: Negotiations focused on replacing the $100 billion annual climate finance target with the NCQG, expected to mobilize $1.3 trillion per year starting in 2035.

Other important discussions included finalizing rules under Article 6 of the Paris Agreement for international carbon markets, building on frameworks established in COP28 for adaptation and loss and damage financing, and advancing sectoral decarbonization initiatives.

Major outcomes

After two weeks of intense negotiations, COP29 ended with the following major outcomes:  

The New Climate Finance Goal: COP29 culminated in the ‘Baku finance goal’, an aspirational commitment of $1.3 trillion annually by 2035. At the same time, a mandatory baseline of $300 billion per year from developed nations was agreed upon. A significant portion of these funds will likely depend on private sector contributions, potentially through mechanisms like green bonds and offset credits.

Market-based cooperative approaches under Article 6: A breakthrough was achieved with the operationalization of the international carbon market, including provisions for trading carbon allowances between countries and the establishment of UN-sanctioned carbon projects.

National commitments and pledges: Several nations, such as the UK, announced enhanced NDCs, targeting higher emission reductions by 2035. Notably, 61 countries signed the ‘Baku priority international actions’, focusing on decarbonizing high-emission sectors like transport and energy.

Implications of COP29 decisions for CCS technology

Climate finance and CCS

CCS is a capital-intensive technology that requires substantial upfront investment for infrastructure development, operation, and maintenance. The NCQG provides an avenue for integrating CCS projects into climate finance initiatives, particularly under mechanisms that blend public and private funding.

Leveraging private sector contributions is important. The emphasis on private investments aligns with the needs of CCS projects, which often attract private capital through mechanisms like carbon credits or public-private partnerships.

The NCQG will also support the CCS deployment in developing countries, which, while facing acute financing gaps, could utilize NCQG funds to integrate CCS into their mitigation strategies, especially for industrial decarbonization.

However, many challenges for the CCS deployment remain. The $300 billion baseline falls short of the projected $1 trillion annual need for developing countries, creating uncertainty about CCS financing. Moreover, loans, a significant component of public climate finance, may increase debt burdens, making CCS less appealing to low-income countries.

Carbon markets and CCS

The finalization of rules under Article 6 opens new opportunities for CCS technologies to contribute to international carbon markets. CCS projects can generate high-quality carbon credits under Article 6.4, potentially increasing their attractiveness to investors. Article 6.2, in its turn, allows countries to count CCS-based emissions reductions toward their NDCs through bilateral trading mechanisms. The mechanisms under Article 6 act as a bridge, allowing developing nations to adopt advanced technologies like CCS by providing them with funding opportunities, partnerships, and access to global carbon credit markets. This fosters their involvement in global climate action while addressing financial and technological barriers.

Yet, COP29’s limited rigor in standard-setting for Article 6 drew criticism. Concerns remain about ensuring that CCS projects meet high environmental standards and avoid double counting emissions reductions.

NDCs and CCS

Countries are expected to submit updated NDCs by 2025, with a focus on aligning with 1.5°C warming pathways. For CCS, this represents an opportunity to gain recognition as a critical mitigation tool: Many nations are adopting aggressive decarbonization goals, creating a demand for CCS to address emissions from hard-to-abate sectors like cement and steel production. Countries with explicit CCS targets in their NDCs, such as Vietnam and the UK, demonstrate how international commitments can incentivize domestic CCS deployment.

Challenges for CCS post-COP29

Despite the potential opportunities, several hurdles persist:

Limited financial support: The modest baseline of the NCQG and reliance on private sector contributions create uncertainty for CCS, particularly in developing economies.

Technical and policy gaps: Many countries lack the regulatory frameworks needed to support CCS deployment at scale. Moreover, insufficient attention to storage monitoring and accountability could undermine its efficacy.

Public perception and equity concerns: Civil society groups have raised concerns about CCS’s role in perpetuating fossil fuel extraction, advocating instead for renewable energy transitions. Addressing these perceptions is vital for broader acceptance.

The path ahead: COP30 and beyond

COP30 to be held in November 2025 in Belém, Brazil, labeled the ‘Nature COP’, promises a stronger focus on integrating climate and biodiversity objectives. For CCS, this could mean:

Nature-based CCS solutions: Exploring synergies between carbon sequestration and ecosystem restoration, such as bioenergy with carbon capture and storage (BECCS).

Increased funding ambition: The ‘Baku to Belém roadmap’ outlines plans to scale up finance ahead of COP30. Stronger financial commitments could bolster CCS projects globally.

Enhanced policy coordination: A more integrated approach to adaptation, mitigation, and finance under the Global Goal on Adaptation (GGA) could include CCS as a component of holistic climate resilience strategies.

COP29 delivered significant, though imperfect, progress on climate action. For CCS, the conference underscored both the opportunities and challenges of scaling this critical technology. While the NCQG and carbon market mechanisms offer promising avenues for funding and integration, gaps in ambition, financing, and public support remain critical barriers.

As the global community looks toward COP30, it is imperative to build on COP29’s outcomes by addressing these challenges and positioning CCS as an indispensable tool in achieving the Paris Agreement’s goals. Through innovative financing, robust policy frameworks, and greater international collaboration, CCS can emerge as a cornerstone of the global response to climate change.