After nearly a decade of negotiations, COP29 in Baku, Azerbaijan, marked a breakthrough with the adoption of Article 6 of the Paris Agreement. This long-awaited development establishes a framework for global carbon trading, offering clarity and optimism for the future of climate finance.

But this milestone is more than a bureaucratic win. For the negotiators in Baku, it was the culmination of years of stop-start talks, long nights, and tough compromises. For carbon market participants, it’s the beginning of a new chapter—one filled with both opportunity and responsibility.

What does Article 6 achieve?

This clause of the Paris Agreement operationalises two key mechanisms:

Article 6.2: A decentralised framework allowing countries to trade carbon credits bilaterally.
Article 6.4: A UN-regulated global carbon market open to both governments and private participants.

Together, these systems promise to unlock billions in climate finance. According to the International Emissions Trading Association (IETA), Article 6 could save countries $250 billion annually by 2030 towards achieving their climate goals.

Yet, as the ink dries on the agreement, one question looms large: will this system deliver the integrity, equity, and ambition needed to tackle the climate crisis?

A step forward—but is it enough?

For many at COP29, the adoption of Article 6 was a moment of relief. For others, like Opna’s CEO & Founder Shilpika Gautam, the announcement is bittersweet. As she reflected in her post-COP29 thoughts:

"Can we truly applaud incremental progress when the stakes are this high?"

The operationalisation of Article 6 is undoubtedly a milestone. It has the potential to mobilise much-needed climate finance, particularly for developing nations. Yet the applause for these achievements must not obscure the deeper issues.

The equity gap: Countries in the Global South, already bearing the brunt of climate impacts, still lack adequate resources for loss and damage. Without targeted support, how can they achieve a just transition to decarbonisation?

The reliance on fossil fuels: Can we celebrate carbon market mechanisms while the world continues to invest in the very systems that caused the crisis?

The quality of credits: If old, low-integrity credits from the Clean Development Mechanism (CDM) are allowed to flood the market, will the promise of Article 6 be undermined?

For Article 6 to succeed, it must go beyond incrementalism. It must deliver a system that prioritises ambition, equity, and transformation.

Opportunities and challenges for carbon markets

The adoption of Article 6 has profound implications for buyers, developers, and policymakers. It promises new opportunities but also raises pressing challenges.

Opportunities

Clarity and confidence: The framework provides a clearer structure for global carbon markets, boosting participation and investment.
A surge in CDR projects: More high-quality carbon dioxide removal (CDR) projects are expected, offering buyers access to credible removal credits.
Multiple applications: Article 6 credits (e.g., A6.4ERs) can be used for compliance markets, national targets, and voluntary net-zero commitments.
Market convergence: The integration of Article 6 credits with voluntary carbon markets should reduce fragmentation and create a unified system.

Challenges

But with these opportunities come significant challenges:

Ensuring integrity: Without robust oversight, there’s a risk of “cowboy carbon markets” undermining trust in the system.
Premium pricing: Correspondingly adjusted Article 6 credits are likely to command higher prices than voluntary market credits.
- An IETA survey revealed 83% of buyers are willing to pay this premium, but it could exclude smaller participants.
Delays in implementation: The first Article 6.4 credits are not expected until mid-2025, creating uncertainty for early adopters.
Supply constraints: Limited issuance capacity could lead to oversupply of Letters of Authorisation (LoAs), increasing revocation risk for buyers.

For buyers and market participants, navigating these dynamics will require vigilance and a focus on high-quality projects.

What does this mean for buyers of CDR?

For buyers in the carbon markets, the operationalisation of Article 6 brings both clarity and complexity. On one hand, the new framework offers access to high-integrity credits and the potential for corresponding adjustments, which ensure that carbon reductions are accounted for only once—boosting credibility and alignment with compliance needs. On the other hand, it introduces new challenges such as premium pricing for Article 6 credits, supply constraints, and the continued necessity for rigorous due diligence.

Buyers now have an opportunity to demonstrate leadership by investing in projects authorised under Article 6, particularly those focused on carbon dioxide removal (CDR) and community-centred solutions. However, this will require strategic planning to navigate price premiums and ensure alignment with their broader climate goals. Ultimately, Article 6 presents a pathway to align voluntary and compliance market ambitions, giving buyers a stronger position to meet net-zero commitments while supporting global decarbonisation efforts.

A defining moment—or just the beginning?

As the world looks beyond COP29, the focus shifts to the practicalities of implementation. Governments and market participants must roll out Article 6 mechanisms with transparency and integrity. Standards and methodologies listed under Article 6.4 will need refinement, particularly for nature-based solutions and community engagement. And finally, civil society oversight will be crucial to prevent abuses and ensure that the system delivers meaningful climate benefits.

The adoption of Article 6 at COP29 represents a turning point for carbon markets. For the first time, the world has a unified framework for international carbon trading, with the potential to unlock billions in climate finance and drive significant emissions reductions.

For buyers, developers, and policymakers, the challenge now is to ensure that Article 6 lives up to its promise. That means prioritising integrity, focusing on high-quality projects, and pushing for deeper ambition. Carbon markets have the potential to be a tool for transformation—if we demand nothing less.

Learn more about how we help buyers with their sustainability portfolios or contact us at hi@opna.earth.