In November 2024, global climate negotiators gathered in Baku, Azerbaijan, for COP29, the latest in the series of annual UN climate summits. While headlines largely focused on climate finance, the implications for fossil fuels were more nuanced.
One of the most significant outcomes of the summit was the agreement to establish a new global climate finance target. Known as the New Collective Quantified Goal (NCQG), this commitment sets a minimum benchmark of USD 300 billion per year by 2035, more than tripling the previous $100 billion pledge made in 2009. The funds are intended to support climate mitigation and adaptation efforts in developing countries. Although the delivery mechanisms are still being shaped, the volume of capital now being mobilised could eventually accelerate the build-out of renewable infrastructure in regions that are currently net importers of fossil fuels.
The question of how to approach fossil fuel use remained a complex and closely watched topic at COP29. While delegates were unable to agree on a formal commitment to phase out fossil fuels, the final text retained language on reducing fossil fuel use, reflecting ongoing efforts to find common ground. The continued presence of this issue on the agenda underscores its relevance and signals that discussions around the future role of oil and gas will remain active across policy, finance, and energy planning circles.
Another notable development was the operationalisation of the Loss and Damage Fund, originally announced at COP27 and reaffirmed at COP28. This mechanism is designed to channel support to countries suffering the most severe impacts of climate change. In the months following COP29, the United States announced its withdrawal from the Fund’s board, a decision that has prompted discussions about the Fund’s governance and the implications for its long-term stability and funding commitments.
For oil traders, COP29 did not deliver immediate regulatory disruption. There was no direct policy action that alters the short-term outlook for crude markets. However, the broader themes—growing climate finance, persistent pressure on fossil fuels, and increased institutional focus on transition pathways—are shaping the environment in which long-term trading strategies are made.
Even in the absence of a global fossil fuel exit timeline, investors and counterparties are increasingly assessing exposure through the lens of climate risk. Understanding how public sentiment, capital flows, and policy frameworks evolve in the post-COP29 world will be key to maintaining resilience in the years ahead.
Sources:
Carbon Brief. “COP29: Key Outcomes Agreed at the UN Climate Talks in Baku – Carbon Brief.” Carbon Brief, 24 Nov. 2024, www.carbonbrief.org/cop29-key-outcomes-agreed-at-the-un-climate-talks-in-baku/.
Lo, Joe. “Fossil Fuel Transition Talks Rescued from Brink of Collapse at COP29.” Climate Home News, 18 Nov. 2024, www.climatechangenews.com/2024/11/18/fossil-fuel-transition-talks-rescued-from-brink-of-collapse-at-cop29/.
Abnett, Kate, and Virginia Furness. “United States Quits Board of UN Climate Damage Fund, Letter Shows.” Reuters, 7 Mar. 2025, www.reuters.com/world/us/united-states-quits-board-un-climate-damage-fund-letter-shows-2025-03-07/.
Calma, Dean. Outside Passage Leading to the Delegate Offices at the United Nations Climate Change Conference UNCCC COP29 Held in Baku, Azerbaijan., www.flickr.com/photos/iaea_imagebank/54157180158.
While oil continues to dominate the global energy mix, it’s impossible to ignore the pace of innovation within the renewables space in 2025. Two technologies in particular—perovskite solar cells and green hydrogen—have gained momentum, attracting both capital and policy support. For energy companies like us, understanding these developments is increasingly part of staying commercially aware.
Perovskites—named for their distinctive crystal structure—have emerged as one of the most promising upgrades to traditional silicon solar panels. In April 2025, a Chinese manufacturer achieved a certified power conversion efficiency of 34.85% for a two-terminal tandem perovskite-silicon solar cell. These cells are not only more efficient but also offer advantages in terms of flexibility and lightweight design, making them suitable for a variety of applications, including building-integrated photovoltaics and portable power sources. Manufacturers are racing to solve durability and scalability issues, but the direction of travel is clear: lighter, more adaptable solar tech is coming.
Green hydrogen, produced via electrolysis powered by renewable energy, is also gaining attention as a clean fuel alternative. While the technology holds promise, high production costs remain a significant barrier. However, projections suggest that costs could decrease by 60-80% by 2030, potentially achieving cost parity with grey hydrogen in many regions. In the UK, a consortium of businesses has proposed a £6.5 billion project to build one gigawatt of green hydrogen production capacity by 2030, aiming to deliver hydrogen at a competitive price.
For oil companies, it’s not about jumping ship—but staying informed on the technologies that are reshaping power generation economics and starting to impact policy direction. While neither perovskites nor green hydrogen will displace fossil fuels overnight, both are worth watching closely in 2025.
Sources:
Shaw, Vincent. “Longi Achieves 34.85% Efficiency for Two-Terminal Tandem Perovskite Solar Cell.” Pv Magazine International, 18 Apr. 2025, www.pv-magazine.com/2025/04/18/longi-achieves-34-85-efficiency-for-two-terminal-tandem-perovskite-solar-cell/.
Research and Markets. “Green Hydrogen Costs to Drop 60-80% by 2030 as Industry Shifts towards Sustainable Energy – New Global Hydrogen Market Report 2025 Released.” GlobeNewswire News Room, Research and Markets, 6 Mar. 2025, www.globenewswire.com/news-release/2025/03/06/3037977/28124/en/Green-Hydrogen-Costs-to-Drop-60-80-by-2030-as-Industry-Shifts-Towards-Sustainable-Energy-New-Global-Hydrogen-Market-Report-2025-Released.html
Gill, Oliver. “UK Businesses Plan £6.5bn Project to Raise Hydrogen Production.” Thetimes.com, The Sunday Times, 12 Apr. 2025, www.thetimes.com/business-money/companies/article/uk-businesses-plan-65bn-project-to-raise-hydrogen-production-08zh8ghf3
In the first quarter of 2025, sanctions enforcement has taken centre stage in the oil trading world. The regulatory landscape has grown more aggressive, with authorities in the US, UK, and EU signalling that compliance lapses—intentional or otherwise—will not be tolerated.
The US has ramped up its use of secondary sanctions, with a sharper focus on oil flows connected to sanctioned jurisdictions. Executive Order 14245 introduced in March threatens trade retaliation against countries indirectly supporting sanctioned energy markets. For trading companies, this adds a new layer of exposure—extending risk well beyond direct transactions.
At sea, the increasing reliance on so-called “shadow fleets” has further complicated operations. The industry has seen a rise in ship-to-ship transfers in international waters to obscure cargo origin, often involving older vessels with unclear ownership and expired insurance. These movements are under growing scrutiny. In April, the US Treasury updated its maritime advisory on sanctions evasion tactics, cautioning companies against indirect facilitation of prohibited trades.
Meanwhile, the UK and EU have also widened their enforcement scope. Recent measures included new designations of individuals, companies, and vessels linked to the movement of sanctioned oil. These additions have already prompted many shipowners and insurers to reassess exposure, particularly where vessels may have interacted with restricted cargoes in the past.
The message to the trading community is clear: compliance can no longer be reactive. Firms are expected to conduct thorough due diligence across the supply chain, including vessel tracking, counterparty risk assessments, and documentation review. With enforcement actions becoming more frequent and fines increasing, the cost of falling behind is growing.
The second half of 2025 is likely to bring more of the same—heightened vigilance from regulators and increased pressure on market participants to adapt. For oil traders, agility and robust internal controls are no longer optional—they are essential.
Sources:
“Executive Order 14245—Imposing Tariffs on Countries Importing Venezuelan Oil | the American Presidency Project.” Ucsb.edu, 2025, www.presidency.ucsb.edu/documents/executive-order-14245-imposing-tariffs-countries-importing-venezuelan-oil.
Liu, Siyi. “Russian Arctic Oil Exports to China Jump Helped by STS Transfers, Sources Say.” Reuters, 17 Apr. 2025, www.reuters.com/business/energy/exports-sanctioned-russian-arctic-oil-china-set-rise-april-sources-say-2025-04-17/.
Psaledakis, Daphne. “US Issues New Sanctions Targeting Chinese Importers of Iranian Oil.” Reuters, 16 Apr. 2025, www.reuters.com/world/us-issues-new-sanctions-targeting-chinese-importers-iranian-oil-2025-04-16/.
The biggest climate conference ever held was the 28th annual United Nations Climate Change Conference, commonly called COP28, that took place in Dubai over 30 November to 13 December 2023. More than 190 countries were represented, with King Charles of the United Kingdom giving the opening address.
There was, of course, some controversy: the president of COP28 was Sultan al-Jaber, head of the Abu Dhabi National Oil Company. Climate campaigners considered this inappropriate and illogical, but in his own words, “not having oil and gas and high-emitting industries on the same table is not the right thing to do. We need to reimagine this relationship between producers and consumers. We need this integrated approach.” In fact, around 2,400 delegates connected to the coal, oil, and gas industries were in attendance, a number that has quadrupled from COP27.
For the first time, countries agreed on the need to start “transitioning away from fossil fuels in energy systems, in a just, orderly and equitable manner, accelerating action in this critical decade, so as to achieve net zero by 2050 in keeping with the science”.
At the meeting, a landmark deal was also made to commit US$700m to the loss and damage fund to rehabilitate vulnerable countries affected by the climate crisis. This fund was agreed at COP27 with the idea that wealthier countries pay poorer countries. For decades, richer nations have been veering away from paying for their historic carbon emissions. The US, for instance, wanted to make clear that its contribution to the fund was not compensation for past emissions.
Although its critics accuse the conference of letting business and governments promote climate credentials and policies without actually implementing the, the COP summits are important. They offer the potential for global agreements, such as the 1.5C warming limit which was agreed on at COP21.
At the end of the day, it is up to the world to put into practice the resolutions of COP28 and future COPs.
Sources:
Poynting, Mark. “What Was Agreed on Climate Change at COP28 in Dubai?” BBC News, BBC, 13 Dec. 2023, www.bbc.co.uk/news/science-environment-67143989.
McGrath, Matt. “COP28: Record Number of Fossil Fuel Delegates at Climate Talks.” BBC News, BBC, 5 Dec. 2023, www.bbc.co.uk/news/science-environment-67607289.
McGrath, Matt. “Poor Countries Win Fight for Climate Cash at Cop28.” BBC News, BBC, 30 Nov. 2023, www.bbc.co.uk/news/science-environment-67581277.
“‘I Wasn’t the Obvious Choice’: Meet the Oil Man Tasked with Saving the Planet.” The Guardian, Guardian News and Media, 7 Oct. 2023, www.theguardian.com/environment/2023/oct/07/meet-the-oil-man-tasked-with-saving-the-planet-cop28.
“‘The Future Is Renewable’: How a Huge Gamble Sealed COP28 Deal.” The Guardian, Guardian News and Media, 15 Dec. 2023, www.theguardian.com/environment/2023/dec/15/fossil-fuels-how-a-huge-gamble-sealed-cop28-deal.