COP30 Green Finance & Project Development Ambitions – A Legal Perspective

This year’s COP30 arrived at a contentious time during which many states’ attention has been turned elsewhere, whether by warring neighbours or sluggish domestic economies. Nonetheless, COP30, hosted in Belém, Brazil, has continued to trend of fuelling commercial speculation. COP30, for the most part, saw parties reaffirm past commitments, making promises that this time the changes brought by incrementally ratcheting Nationally Determined Contributions (NDCs) shall make turn the tide of the climate crisis.  

Whilst the Belém Package bore no legally binding agreements, unlike the (in)famous 2015 Paris Agreement, the conference appeared to offer direction for green financial markets through a series of voluntary targets, roadmaps, and mechanisms.  Should state parties align with the vision offered by these initiatives, one can expect abundant commercial and legal implications.  

A Stronger Direction of Travel

The New Collective Quantified Goal (NCQG) constitutes the most significant development in the climate finance space. This political commitment sees developed countries lead a threefold increase in public climate finance to at least USD 300 billion per year by 2035.These finances, should they operate under further frameworks presented at COP30 may be subject to scrutinous allocation filters, bearing legal and regulatory implications.  Notably, China remains omitted from this consortium of developed countries – as it is still considered developing under the United Nations Framework Convention on Climate Change (UNFCCC) – despite its extensive involvement in public-private partnerships over the past decade.  

The Mutirão Decision punctuated the conference, reaffirming the USD 1.3 trillion target established at COP 29 in Baku, whilst emphasising a concerted push to satisfy this goal. The Baku to Belém Roadmap, the key document detailing these targets was adopted across both COP 29 (Baku), and COP30, with the intention of operationalising the NCQG in addition to outlining mechanisms to mobilise all sources of finance to achieve its greater USD 1.3 trillion target.  Critically, the Roadmap does not consider private finance as an assessed contribution for states, posing issues with regards to accounting and accrediting these funds within the state-led context of the UNFCCC.  

Implications for Renewable Project Development

The cumulative effects of the Mutirão Decision, the Baku to Belém Roadmap, and the NCQG are currently intangible, yet they promise to reshape the financial conditions under which energy projects are brought to market. The most immediate implications are therefore commercial in nature, though they carry significant legal consequences through regulatory exposure and risk allocation.  

Post-COP30 financial architecture promises to be increasingly facilitative for renewable energy projects. The scaling of public climate finance, coupled with an explicit reliance on private capital mobilisation, increases the availability of blended finance, concessional lending, and climate labelled debt instruments. Renewable projects are particularly well positioned to access taxonomy aligned instruments, such as green bonds and green loans, where the use of proceeds finances activities classified as environmentally sustainable under applicable taxonomies. Alignment with such frameworks is becoming an increasingly common prerequisite by multilateral lenders and certain activist investors.

Naturally, any proliferation of taxonomy alignment would introduce greater legal complexity. Classification systems are detailed and technically prescriptive, and their criteria frequently evolve over time. For long lived energy assets, this raises the risk that a project initially considered taxonomy aligned may later fall outside eligibility thresholds – this bares substantial implications for wind farm operators, many of whom shall be seeking concessions to revitalise aged first-generation assets. From a legal perspective, greater exposure emerges surrounding disclosure accuracy and evolving compliance obligations. Financing documentation for renewable projects is therefore becoming more detailed, to align with increasingly stringent covenants and verification requirements.  

What does this Mean for Oil & Gas?

The implications for oil and gas projects are more restrictive, though not prohibitive. COP30 did not introduce binding fossil fuel phase out obligations, preserving legal space for continued hydrocarbon development. Nevertheless, the emphasis on taxonomy alignment and climate labelled finance significantly narrows the availability of preferential capital for upstream oil and gas projects. Such projects are generally excluded from green finance classifications and may struggle to attract investors subject to sustainable finance disclosure regimes.

Where financing remains available, it is increasingly framed as transition finance, often structured through loan facilities rather than green taxonomy aligned instruments. Oil and gas sponsors may therefore be required to commit contractually to emissions intensity reductions, methane abatement, or carbon capture integration. The absence of universally agreed transition criteria further exacerbates legal uncertainty, though provides scope for transition finance to be directed towards ‘low carbon’ fossil fuels – a flashpoint that shall persist, at the very least, until COP31 to be held in Antalya.

All in All

Across both renewable and fossil fuel projects, COP30’s emphasis on mobilising private finance without treating it as an assessed state contribution introduces governance and regulatory risk. States are incentivised to create attractive investment conditions while retaining policy flexibility, increasing the likelihood of regulatory change. For energy projects with long development and operational horizons, this heightens the importance of change in law protections, stabilisation clauses, and political risk mitigation mechanisms.

COP30 has not altered the formal legality of energy projects but it has materially altered their financing environment. Renewable energy projects still stand to benefit from expanded access to climate aligned capital but face heightened legal and compliance expectations. Oil and gas projects remain lawful but can expect to encounter growing financial friction and transition related conditionality within their mid/long-term horizon. Of course, this is ultimately contingent upon state parties’ enthusiasm to engage with the presented initiatives which, as the past five years have demonstrated, is no guarantee.  

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