Carbon markets enter reality – Article 6 and the end of CDM

Opening of the 30th Conference of the Parties (COP30) – photo by Raimundo Paccó/COP30

Forests, finance and nature-based solutions: new chances for long-term investment

Social dimensions, gender and just transitions – climate action beyond carbon

Sonia Guajajara, Minister for Indigenous Peoples of Brazil cries with a indigenous woman Angela Kaxuyana as they participate a signing ceremony for the delimitation of lands with National Foundation of Indigenous Peoples and the celebration of the declaration and homologation decrees for indigenous lands, at the 30th Conference of the Parties (COP30) – photo by Ueslei Marcelino/COP30

One of the more important shifts at COP30 was the stronger recognition of the social and human dimensions of climate action. Reducing emissions is no longer enough: climate strategies must be inclusive and sensitive to community realities. A new Gender Action Plan (2026-2034) paves the way for more inclusive participation of women and girls in climate projects. At the same time, the expanded concept of “Just Transition” acknowledges that sectors and regions dependent on fossil fuels or vulnerable to change need targeted support, whether through job creation, social safeguards, and/or capacity building.

What COP30 means for companies, projects and climate investors

Building Bridges: Collaborative Climate Action under the Mutirão Spirit of COP30 – photo Rafa Neddermeyer/COP30 Brasil Amazônia/PR

COP30 did not deliver the grand breakthroughs some expected. There was no collective fossil-fuel phase-out roadmap, and no binding global commitment to end deforestation. Instead, the COP delivered something subtler: the architecture for action, finance, markets, and implementation. For businesses and climate-finance actors, this new landscape presents several opportunities:

• First, carbon markets under Article 6 are opening. Those who engage early, build strong baselines, ensure environmental and social integrity, and commit to transparency may help shape standards for years to come.
• Second, nature-based solutions are still in the spotlight. Long-term funds for forest protection, ecosystem restoration, and sustainable land use, including agroecology and regenerative agriculture, are likely to expand.
• Third, adaptation and social dimensions are becoming integral. Projects that combine mitigation, adaptation, community benefits, and gender-social inclusion are likely to stand out as especially valuable and future-proof.
• Finally, implementation matters more than ever. Reporting, verification, cooperation, and capacity-building – all become part of the climate-action toolkit. Delivering results will matter more than announcing intentions.

A new phase begins – welcoming the era of delivery

COP30 President Andre Correa do Lago during closing plenary meeting of the 30th Conference of the Parties (COP30) – photo by Ueslei Marcelino/COP30

COP30 may not have produced sweeping fossil-fuel phase-out commitments or global deforestation bans. But by closing the negotiation cycle and opening the implementation phase, it laid down a foundation for the next years. For Volkswagen ClimatePartner and our partners, project developers and investors, this is a moment to rise to the challenge: to design high-integrity carbon projects, support nature-based solutions, ensure social justice, and embed transparency and impact at every step.

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We would like to reiterate that Volkswagen ClimatePartner works closely with its project partners, Carbon Solve and SftFTZ, who are responsible for developing and managing the LMRCP.

Volkswagen ClimatePartner takes MISA’s concerns very seriously and believes that constructive dialogue can only be achieved through direct and meaningful participation of those affected, in a setting that allows for this, with the involvement of the project developer and the communities.

Following online and in-person meetings in Germany, it is now time to meet in Tanzania. We have invited MISA several times to meet in Tanzania and are awaiting their response.

We are convinced that holding another meeting in Germany would result in sensitive local matters being discussed without the input of those most affected, despite their voices being central to the issue.

Our offer of a joint meeting with MISA in Tanzania remains open. We are keen to engage in an exchange of views within a framework that ensures the participation of all relevant stakeholders and leads to practical solutions.

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We deeply respect the history, resilience, and challenges of the Maasai people. Our involvement in the Longido and Monduli Rangelands Carbon Project (LMRCP), implemented by our project partners Soils for the Future Tanzania (SftFTZ, the project implementing entity) and CarbonSolve LLC, is grounded in a commitment to improving rangeland health, supporting Maasai livelihoods, and promoting climate resilience through carbon finance. The project is designed to balance traditional pastoralist land use with sustainable land management while ensuring that Maasai communities retain full control over their land and benefit from participation.

In the following section, we would like to clarify several key points in response to the claims made in the MISA report:

1. Land Ownership and Rights

• SftFTZ does not acquire or control any land within the project area. All land titles remain entirely under the ownership of the Maasai villages, in accordance with Tanzanian law.
• The project does not involve land sales, leases, encumbrances or transfers to foreign or Tanzanian entities or individuals.
• Maasai communities will continue to exercise full rights over their land and maintain their traditional grazing practices.

2. Contract Duration and Flexibility

• There is a scientific consensus that soil restoration takes time. The 40-year duration of the project contracts is needed to support the reality that degraded grasslands, such as those in Northern Tanzania, can take several decades to recover.
• This long-term commitment ensures sustainable land regeneration and stable economic benefits for communities. The project agreements can be reviewed to reflect on experience with implementation. If one side does not meet its core obligations, the other side has the right to terminate the agreement through a defined process.

3. Free, Prior, and Informed Consent (FPIC) Process

• Volkswagen ClimatePartner places a strong emphasis on FPIC, ensuring that all participating communities fully understand the project’s terms, benefits, and implications.
• The FPIC process begins with an early engagement to introduce the project, explain its broad concepts and its progression from introduction to implementation. This process includes, initially, the Memorandum of Understanding (MoU) and results in the two project agreements, namely the Carbon Rights Assignment Agreement and the Benefit Sharing Agreement.
• Engagement includes women, youth, and village elders, with all agreements requiring final approval from the village assembly before implementation.
• Dedicated Maasai team members within SftFTZ lead consultations to ensure cultural sensitivity, inclusivity, and transparency.
• An independent data management consultancy tracks all FPIC-related activities to document engagement and ensure full transparency.

4. Pastoralist Traditions and Grazing Practices

• The project is not designed to restrict Maasai traditions but rather to support sustainable pastoralism by preventing overgrazing and land degradation.
• The project does not disrupt traditional grazing but rather supports it with financial benefits, ensuring its sustainability while focusing specifically on preventing overgrazing.
• The project ensures flexible yet secure governance of grazing activities. While villages commit to core grazing principles, each village grazing committee designs a specific management plan that is agreed upon by participants. This plan can be adjusted over time to respond to changing conditions, emergencies, and community needs.

5. Fair Benefit-Sharing Mechanism and Initial Project Payments

• The project follows the Tanzanian legal framework on carbon trading, ensuring that revenues are distributed fairly among stakeholders.
• Benefit sharing is guided by the Tanzanian legal framework as further negotiated between the villages and SftFTZ with oversight from the district.
• Initial project payments are used to support project preparation. The payments are made after the Benefit Sharing Agreements have been signed and after the Rapid Rotational Grazing Plans have been developed.

6. Scientific Basis and Environmental Impact

• There is a broad consensus among the scientific community and global institutions, such as the Intergovernmental Panel on Climate Change (IPCC), that tackling soil and land degradation—including soil carbon enhancements—is vital for combating climate change. Carbon crediting serves as an additional tool to achieve these impacts.
• The project methodology applies a peer-reviewed soil carbon model, which has been approved by VERRA for use in relevant contexts, including arid and semi-arid regions of East Africa.
• The methodology requires ex-post soil sampling to determine the actual accumulation of soil carbon over time to avoid over-crediting.

Volkswagen ClimatePartner is committed to ensuring that our climate initiatives respect land rights, promote sustainable development, and create real benefits for communities. We are committed to ongoing engagement with Maasai communities, independent experts, and regulatory bodies.

For further inquiries, please contact:

Volkswagen ClimatePartner

communications@volkswagen-climatepartner.de

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Photo: UN Climate Change – Kiara Worth

We must balance ambition and reality in climate finance

One of the key outcomes was the New Collective Quantified Goal on Climate Finance (NCQG), which commits richer countries to $300 billion per year by 2035. While this figure is a step in the right direction, it is not enough to truly empower vulnerable countries. Instead, all parties must drive innovation and high-quality projects that complement adaptation efforts, especially in regions where funding gaps remain. Joint efforts can amplify the impact of existing funds by prioritising high-impact, community-based solutions.

After years of debate, new decisions regarding Article 6

COP29 has delivered a breakthrough on Article 6, able to accelerate the potential of the carbon markets to reduce emissions and benefit people and the planet. Article 6 of the Paris Agreement outlines how nations can trade mitigation units in voluntary collaboration to achieve their climate goals. Under this article, the Paris Agreement Crediting Mechanism (PACM) is a carbon credit trading system governed by the United Nations (UN) where private and public actors can buy and sell carbon credits. After years of negotiation, the rules for operationalising this system are now in place. The aim is to establish a system that involves high-quality and effective climate projects. Efforts have focused on simplifying approval and tracking processes to reduce complexity and ensure transparency, making the system more accessible and credible for countries and businesses.

Photo: UN Climate Change – Kamran Guliyev

Broader acceptance and support by the UN for carbon trading, transparency, and safeguards

In addition to progress on Article 6.4, advancements were made on Article 6.2, enabling countries to meet their climate targets through bilateral or multilateral cooperation. This approach enables direct country-to-country trading of credits to reduce emissions, known as Internationally Transferred Mitigation Outcomes (ITMOs). The United Nations will officially recognise these trades, ensuring they are transparent and properly reported. To protect all parties involved, such as local communities, the agreement includes safeguards, including detailed disclosure about where the carbon credits come from, how they are monitored and used. Importantly, the agreement acknowledges the role of Indigenous Peoples and ensures their representatives are involved in the process. It also includes agreements on how to address any inconsistencies in project documentation and technical reviews, aiming to establish a reliable market with consistent quality standards. However, because countries have different views on issues like transparency and how credits should be used, further discussions are needed to fine-tune this framework. These frameworks will also significantly shape corporate carbon strategies and compliance, marking a crucial step in leveraging carbon markets to combat climate change effectively.

Photo: UN Climate Change – Kamran Guliyev

What does this mean for us?

COP29 reaffirmed the importance of technology-driven and nature-based solutions. While some Article 6.4 methodologies may require longer timelines to operationalise, other areas, such as sustainable agriculture and afforestation, are gaining momentum. Those are all areas that align with our expertise and potential for significant impact, so we keep putting our efforts into those. In addition, the focus on methane mitigation aligns with our mission to deliver high-impact projects. Tackling methane emissions is one of the fastest ways to slow down climate change. By exploring projects in this area, we can contribute to rapid and measurable climate benefits.

COP29 and VCP: A shared vision for climate action

COP29 highlighted the interconnectedness of finance, accountability, and innovation in tackling the climate crisis. For us, the conference was a call to action – a moment to reaffirm our commitment to delivering effective climate solutions. We used COP29 not only as an opportunity to engage with global stakeholders but also to refine our strategies in response to a rapidly changing marketplace. While we recognise that global efforts such as the $300 billion climate finance target are not yet enough, we remain optimistic about the transformative potential of mechanisms such as Article 6. These instruments can drive meaningful change, especially when combined with our focus on high-quality projects and innovative approaches.

Since we are dedicated to initiating and supporting high-quality climate protection projects worldwide, our commitment extends beyond strategic planning; we actively provide financial backing to ensure these initiatives are successfully launched and sustained. Our approach aligns with the broader goals discussed during COP29, emphasising the importance of actionable and financially supported climate solutions. While we are committed to making meaningful contributions, we remain mindful of setting realistic expectations within the Voluntary Carbon Market (VCM) community. Our focus is on delivering tangible results through carefully selected and well-supported projects, ensuring that our efforts lead to measurable climate benefits.

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Why healthy habitats matter

Natural habitats are home to a wide range of plants, animals, and micro-organisms. They provide essential resources such as food, water, and shelter, allowing all kinds of species to survive and thrive. They contain rich biodiversity, including different ecosystems such as forests, oceans, and wetlands, a variety of animal and plant species, and genetic variation within these species. In addition, diverse ecosystems provide services such as nutrient cycling, water purification, and climate regulation. Unfortunately, these natural habitats are under threat from human activities such as deforestation, urbanisation, agriculture, and pollution, as well as natural risks such as global warming and geological events. This is dangerous because biodiversity is a key indicator of ecosystem health. The higher the level of biodiversity, the more resilient the ecosystem. A more resilient ecosystem is better able to support natural carbon sequestration processes.

What is the link between carbon sequestration and biodiversity?

Carbon sequestration and biodiversity are highly connected. This is because natural habitats such as forests, grasslands, and wetlands act as important carbon sinks. They naturally remove carbon dioxide from the atmosphere through photosynthesis and store it in biomass and soil. The healthier biodiverse ecosystems are, the better they can adapt to climate change since biodiverse ecosystems tend to sequester more carbon. This is because healthy ecosystems have a greater diversity of species that can respond differently to environmental stress and help maintain ecosystem stability. For example, planting a variety of tree species allows each tree or plant to take up carbon at a different rate. This diversity maximises carbon sequestration and promotes ecological balance, resulting in self-sustaining systems that require less human intervention to maintain their carbon storage capacity. Protecting ecosystems therefore not only helps to store more carbon but also supports the habitats that sustain different species, which in turn supports biodiversity.

How are we protecting natural habitats?

All climate projects we engage in support global conservation efforts, such as those outlined in the Kunming-Montreal Global Biodiversity Framework. This framework aims to protect 30% of the world’s land and marine areas by 2030. The projects focus on protecting forests, planting new trees, and restoring wetlands, all of which help to safeguard important ecosystems. Many of these efforts take place in biodiversity hotspots such as tropical forests and wetlands.

But how are we protecting these ecosystems threatened through risks such as deforestation? Our solutions include implementing regenerative agriculture, forest conservation, restoring ecosystems, or supporting ecosystem services. Many nature-based solutions (NbS) focus on establishing corridors that have been separated or fragmented. This allows animals and plants to move more easily between these areas. When species can move freely, they are better able to adapt to changes in their environment, such as climate change or habitat loss. Reconnecting these habitats helps to create a more stable and diverse ecosystem.

While we focus on biodiversity, we cannot ignore social benefits. We ensure that local communities are involved in our conservation efforts. Their involvement is essential as they bring traditional knowledge and sustainable practices that enhance the effectiveness of these projects.

Bringing climate action to life: the Manoa project in Brazil

One example of our commitment to biodiversity is the Manoa Project in Brazil, which focuses on protecting 74.000 hectares of tropical rainforest. The project is in one of the regions with the highest deforestation pressure globally. It helps with carbon sequestration, and avoidance of emissions and aligns with several targets of the Global Biodiversity Framework such as habitat protection of one of the few global Important Bird and Biodiversity Areas (IBA).

Like all projects we supprt, the Manoa project contributes to various of the UN’s Sustainable Development Goals (SDGs). One of these goals is SDG 4, which addresses quality education by providing access to environmental training to local communities and Manoa employees including topics like firefighting but also first aid. Further, the Manoa Project is progressing toward climate and ecosystem health through a local partnership in Cujubim, Brazil.

In July 2024, the Project donated 35m³ of wood to support the town’s tree nursery, enabling the growth of seedlings for reforestation and the revitalisation of degraded land. This initiative contributed to SDG 13, which addresses urgent climate action, and SDG 15, which is dedicated to restoring ecosystems and promoting biodiversity. Since the project began, we have seen a significant increase in species diversity which highlights the effectiveness of our conservation strategies and reinforces the importance of community involvement in achieving biodiversity goals.

In summary, the link between climate change and biodiversity highlights the need for a comprehensive approach to environmental protection. At Volkswagen ClimatePartner, we are committed to integrating forest protection, carbon sequestration with biodiversity conservation to ensure a sustainable and resilient future for our planet. By valuing natural habitats and biodiversity, we can work together to mitigate climate change and preserve the wealth of life on Earth.

If you have any questions or are interested in partnering with us, feel free to contact us.

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Cultivating a strong team culture

Our journey began with a shared vision of a regenerative future. Throughout our first year, we built strong bonds of trust and developed a culture of continuous learning, drawing on the unique strengths of each team member. This collaborative spirit is the cornerstone of our success and drives our ongoing efforts to innovate and lead in our field.

Our regular offsites and team-building activities have been instrumental in shaping a culture founded on responsibility, solidarity, creativity, optimism, and fairness. These values have not only defined our internal interactions but have also laid the groundwork for further project development. Attending high-profile conferences and expanding our professional network has further solidified our presence in the industry, and we remain committed to attracting bright, dedicated individuals to join us in our mission.

Focus on nature-based solutions

Addressing the urgent need for effective climate projects, we have concentrated on nature-based solutions such as forest conservation, reforestation, and agroforestry. These initiatives, along with other land use management projects like grassland and agricultural interventions, form the core of our efforts, representing the majority of our project development.

Project highlights

In 2022, we successfully completed or made significant progress on 16 climate projects. Our portfolio included:

• 84% REDD+ Projects
• 5% Grassland Projects
• 8% Geothermal Projects
• 2% Biogas Projects

Commitment to quality and social impact

We are committed to a rigorous selection process, ensuring that only the highest quality projects are undertaken. Each climate project undergoes thorough due diligence and risk assessment, meeting stringent quality criteria and gaining verification from major voluntary offset crediting entities like VCS and Gold Standard. Our team’s geospatial analysis work plays a crucial role in validating emission reduction claims, and we prioritise projects that offer significant social benefits. By aligning our initiatives with the UN’s Sustainable Development Goals (SDGs) and incorporating socio-economic safeguards such as SD Vista or Social Carbon, we ensure that our projects contribute positively to local communities.

Looking ahead

Reflecting on our founding year, we are proud of our achievements and the strong foundation we have built. We remain focused on accelerating the transition towards sustainable ecosystems and are eager to continue this journey with our growing team and expanding project portfolio. Our commitment to excellence and innovation will guide us as we navigate the challenges and opportunities ahead.

By sharing our story and insights from our founding year, we hope to inspire others to join us in creating a sustainable and regenerative future!

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