At the COP29 climate conference in Baku, the European Commission and EU member states took a leading role in securing an agreement to align global financial flows with the goals of the Paris Agreement. A new collective quantitative climate financing goal (NCQG ) was adopted, expanding the base of contributors to climate finance. The NCQG ensures that more countries contribute based on their emissions and economic weight. The agreement also strengthens the role of multilateral development banks (MDBs) in maximizing the leverage of public funds and mobilizing private investment. Combined financing from these sources is expected to reach at least €1.3 trillion annually by 2035.
Developed countries committed to mobilizing €300 billion annually by 2035 for climate action in developing countries, with contributions from MDBs and other nations. This was a key demand from the EU to ensure fair contributions based on financial capacity. No specific share of this contribution is assigned to the EU, and decisions on how to reach these goals will be made by member states and the EU through national budgets and the Multiannual Financial Framework (MFF). The EU also successfully negotiated new rules to enhance environmental integrity, transparency, and accountability in international carbon markets under Article 6 of the Paris Agreement. A new standard carbon offsets will be set, and new rules for monitoring and registering international carbon transfers will bring transparency to bilateral agreements.
The EU joined ambitious countries in announcing its intention to present an NDC aligned with 1.5°C next year, setting the stage for other nations. Additionally, the EU and the Beyond Oil and Gas Alliance launched a partnership on fossil fuel transition, and the Commission unveiled a new methane reduction roadmap with partners to accelerate emission cuts in the fossil fuel sector. Moreover, the EU published its first Biennial Transparency Report (BTR), marking a significant milestone in the implementation of the Paris Agreement, reinforcing accountability and global collaboration in the fight against climate change.
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Under the 2015 Paris Agreement, 194 countries committed to keeping global temperature rise well below 2°C and pursuing efforts to limit it to 1.5°C by the end of the century. The EU has already reduced its greenhouse gas emissions by 37% since 1990 while growing its economy by nearly 70%. The EU is also preparing its new NDC with a proposal for a 90% emissions reduction by 2040, as part of its Climate Law, which aims for climate neutrality by 2050. In 2023, the EU provided €28.6 billion in public climate finance and mobilized an additional €7.2 billion in private finance for developing countries. The EU’s Green Deal, adopted in 2019, includes a binding climate law with a 55% emissions reduction target for 2030.