Azerbaijan’s President Ilham Aliyev didn’t particularly win over many hearts at COP29 when he said that oil and gas are a ‘gift of God’ and nations ‘should not be blamed’ for having fossil fuel reserves. There were rumours of high-level fossil fuel related discussions, and an Azerbaijan offer to sell gas to central European nations when a Russian supply route through Ukraine is cut off at the end of this month.

The Sunday Times claimed that lack of sufficient pipeline capacity to send significant volumes of gas from Azerbaijan to Europe, meant Russian gas would simply be rebadged as coming from Azerbaijan (a close ally) and the flow from Gazprom would continue.

This story did not sit well with COP29 delegates, whose ranks were already depleted by the absence of several world leaders, a walkout by Austria, and the shadow of US President-Elect Donald Trump’s threat to pull the US out of the Paris Climate Agreement.

 
Nevertheless, there was some good news.

What good news has come out of COP so far?
After days of intensive discussions, the COP29 team managed to reach agreement on the standards of Article 6.4 and adopted Article 6.8 to introduce a ‘non-market approach’ towards international cooperation on adaptation and resilience. ‘These are critical steps towards concluding Article 6 negotiations,’ said COP29 President Mukhtar Babayev. Only parts of Article 6.2 and 6.4 remain to be agreed.

Work was also underway to secure the Loss and Damage Fund. And the Baku Work Programme of the Local Communities and Indigenous Peoples’ Platform was also established.

Nevertheless, there were concerns that the participating parties were not moving towards each other quickly enough. Babayev remarked: ‘It’s time for them to move faster.’ To accelerate the process, ministerial representation was appointed across a wide range of issues. Brazil and the UK, in particular, were invited to ensure and deliver a ‘high ambition and balanced package of negotiated outcomes’ at Baku.

The co-chairs are also in detailed talks with parties to develop the draft text of the New Collective Quantified Goal (NCQG) on climate finance. But here again, a senior delegate admits ‘there is still a long way to go… though there is a workable basis for discussion’.

In his address on the third day, President Aliyev emphasised that the voices of Small Island Developing States (SIDS) [like Samoa, Grenada and Tonga] must be heard on the global stage, ‘to provide tangible financial and technical support to small island states so that they can protect their countries from climate change’.

Building momentum on a raft of declarations is key to the COP29 Presidency’s Action Agenda. However, there was acknowledgment that the current G20 meeting being held in Brazil needed to send ‘a positive signal’ to COP29 of their commitment to address climate change – given that the G20 accounts for 85% of global GDP and 80% of emissions.

According to Reuters: ‘Diplomatic tensions over global warming spilled over into the G20 summit negotiations in Brazil, with 20 major economies reaching a “fragile consensus” on climate finance that seemed to elude UN talks in Azerbaijan.’ COP29 has a goal to mobilise hundreds of billions of dollars (up to $1tn/y) to combat climate change. And there was discussion about the need to include contributors from some of the richer developing nations, such as China, India and Middle Eastern oil producers. But so far, negotiators who have agreed a text mentioning developing nations making ‘voluntary contributions’ to climate finance, have stopped short of calling them ‘obligations’, notes Reuters.

The centrepiece of next year’s COP30 strategy is ‘Mission 1.5’ in a drive to keep the Paris Agreement target of limiting global warming to 1.5°C compared to pre-industrial levels. However, the UN estimates that current national targets could cause temperatures to climb to 2.6°C at least.

On the plus side, 11 countries have submitted their Biennial Transparency Reports (BTRs) ahead of the 31 December 2024 deadline. These include Andorra, Germany, Guyana, Japan, Kazakhstan, the Maldives, the Netherlands, Panama, Singapore, Spain and Turkey. The BTRs are considered to be essential to build trust and confidence among the parties and cover progress on climate plans, climate change impacts and adaptation measures. An Enhanced Transparency Framework has been designed to build mutual trust and promote effective implementation of the Paris Agreement.

Meanwhile, the Baku initiative on Human Development for Climate Resilience was adopted to enhance cooperation between UN agencies, multilateral development banks and multilateral climate funds.

What are the Baku Priority International Actions?
As part of the Breakthrough Agenda at COP29, comprising 61 governments representing 80% of global emissions and over half of GDP, a detailed agenda of ‘Baku Priority International Actions’ to support major decarbonisation initiatives was launched. The actions tackle high emission sectors including power and hydrogen.

Peter Bakker, President and CEO of the World Business Council for Sustainable Development, commented that: ‘The launch of the Baku Priority International Actions is a crucial milestone in advancing the public-private sector cooperation needed to achieve our shared climate goals.’

Key actions include the need to strengthen demand for clean hydrogen, and providing more robust support to help emerging markets and developing economies (EMDEs). In line with the latter, the UK and Federal Republic of Germany have jointly pledged over $420mn to be channelled to the Climate Investment Fund’s Industry Decarbonisation Programme, which plans to deploy up to $1bn in total funding.

Furthermore, there is seen to be a need for common principles for defining low and near-zero emissions in the steel and cement/concrete sectors, through the work of the Climate Club.

In addition, there is a need to accelerate the adoption of zero emissions vehicles (ZEV) in emerging market and developing economies (EMDEs) through global assistance and support packages, guided by the annual update of the Global ZEV Transition Roadmap. COP29 also made a pledge on creation of Green Energy Zones and Corridors and Global Energy Storage and Grids – where clean green electricity will play a pivotal role in combatting climate change and delivery of pledges under the Breakthrough Agenda.

The Breakthrough Agenda has been developed by the International Energy Agency and UN Climate Change High-Level Champions. What’s more, ‘the UK endorsed the Baku Priority International Actions for 2025 to help drive the global transition,’ according to Ed Milliband, UK Secretary of State for Energy Security and Net Zero.

Other COP news
Saudi Arabia’s ACWA Power signed an implementation agreement with the Uzbek Ministry for Energy for up to 2 GWh of battery energy systems capacity.

Abu Dhabi Future Energy company PJSC-Masdar, Azerbaijan’s SOCAR Green and ACWA Power signed a memorandum of understanding to explore development of 3.5 GW of offshore wind projects in Azerbaijan’s section of the Caspian Sea.

The European Bank for Reconstruction and Development (EBRD) has financed two utility-scale solar projects alongside the Asian Development Bank and the Asian Infrastructure Bank in Azerbaijan. Each multilateral bank will provide $160mn to support construction of two solar plants in Azerbaijan with a capacity of 760 MW.

Tree Energy Solutions and SOCAR signed a joint study agreement to explore development of electric natural gas (e-NG), that could potentially deliver the e-fuel via the existing gas network.

There were about 1,800 delegates from fossil fuel companies at COP29 – with debate in some corners by NGOs and environmental lobbyists, proposing to bar them from future COP summits. However, this seems unlikely given that COP30 is in Brazil and the fuel oil sector has yet to abandon renewable investments as part of its portfolios, though there has been backsliding. What’s more, BP, Equinor, Shell and TotalEnergies have joined forces to support energy access in Sub-Saharan Africa, South and Southeast Asia, with $500mn of committed capital for ‘promising, high impact projects to help achieve UN SDG7 by 2030’. The aim is to help millions of people in under-served communities gain access to electricity and improved cooking conditions, while also generating jobs and improving health.

A UN-related High-Level Expert Group on Climate Finance co-chaired by Nicholas Stern and Vera Songure recommended that wealthy nations should pledge to provide $300bn a year by 2035, to unlock a further $1tn from other sources of finance. The group said that total finance will need to increase more than fourfold by 2030 if the Paris Agreement is to be delivered, ‘as delayed action means we will need to mobilise even larger sums in shorter timeframes’.

Nations are expected to clash over the new finance goal. Although there is a general consensus that wealthy nations should provide more. UN Secretary General António Guterres called for nations to reframe their perception of climate finance, saying: ‘Climate finance is not a charity, it is an investment.’

The COP29 Global Energy Storage and Grids pledge aims to commit to a collective goal of deploying 1,500 GW of energy storage globally by 2030 – more than six times the capacity of 2022, and also aims to install or refurbish 25mn km of grid infrastructure globally by that date.

UNIDO and the Climate Club launched the Global Matchmaking Platform for industrial decarbonisation of heavy emitting industries.

The International Renewable Energy Agency (IRENA) and Azerbaijan’s Minister of Energy launched the Accelerated Partnership for Renewable Energy in Central Asia (APRECA), as a framework for regional cooperation and acceleration of investments in renewable energy deployment and trade in Kazakhstan, Kyrgyz Republic, Tajikstan, Turkmenistan and Uzbekistan.

During the summit, a panel was hosted by the UK government in partnership with POWERful Women, exploring what it takes to maintain gender equality into energy policy and building a low-carbon economy. The panel featured Rt Hon Annelise Dodds MP and Energy Institute Chief Executive Nick Wayth FEI, who described the benefits of the STEP programme, which challenges companies ‘to go faster and do better’ to improve diversity and inclusion, in line with the 40% goal by 2030.

The Asian Development Bank announced $3.5bn of funding for a new programme to help countries counter the impact of melting glaciers.

The Azerbaijan banking sector allocated $1.2bn to green projects through to 2030.

And Sweden announced a $730mn contribution to the UN Green Climate Fund.

Leaders in business, finance and philanthropic communities are still expected to unite for the first time to accelerate the deployment of private capital into climate markets. Maybe there is cause for some optimism by the close of play of COP29 next week.

• Further reading: ‘Can COP29 live up to expectations?’ Given this year’s extreme weather, volatile geopolitics, and continuing global conflicts and economic challenges, can COP29 in Baku, Azerbaijan, deliver on its ambitions? This is the key question, given the main theme of the ‘Finance COP’, focused on securing increasing contributions from wealthier nations to mitigate climate change and balance the global north-south divide.
• Find out how Donald Trump’s election could reshape US energy policy and hinder global climate action.