As the UN Global Climate Talks Lose Momentum, a Smaller Coalition Eyes a Fossil Fuel Exit

Climate talks fossil fuel: UN process stalls as 11-nation coalition drafts exit treaty

Muhammad Asghar | GlobalBeat

UN climate negotiations in Bonn limped to a close Friday with zero progress on phasing out coal, oil and gas as Denmark and 10 partners prepare to launch a separate fossil-fuel non-proliferation treaty.

The splinter group, led by Denmark and Tuvalu, will open the treaty for signature at the UN General Assembly in September after two years of stalled talks within the official UNFCCC process,丹麦气候部长Lars Aagaard told reporters.

The move marks the first time since the 2015 Paris Agreement that countries have sought to craft climate rules outside the UN framework. Current UN texts still refuse to name fossil fuels as the driver of warming, despite global emissions hitting a record 37.4 billion tonnes of CO₂ last year.

“We cannot wait for consensus among 198 countries when the top 10 oil producers block every mention of coal, oil or gas,” Aagaard said after the Bonn session ended. “The treaty will create a parallel legal home for states that want out.”

The Danish-led coalition includes Costa Rica, Kenya, Vanuatu, Ireland, France, Finland, Slovenia, Antigua, New Zealand and Australia. Together they represent 8% of global fossil-fuel production but 24% of renewable electricity generation, according to latest BP data.

Saudi Arabia, Russia and Iraq led opposition inside the UN talks to any wording that would “target specific energy sources,” delegates said. The final Bonn decision again limits itself to calling for “accelerated efforts towards low-emission energy systems,” the same phrase used since 2021.

Climate advocates walked out of the closing plenary in protest. “This is Groundhog Day,” said Tasneem Essop of Climate Action Network. “Every year the science gets sharper, the floods get worse, and the text gets weaker.”

The 11-nation group began drafting the treaty in 2023 after the COP28 summit in Dubai failed to commit to an actual phase-out, opting instead for a “transition away” from fossil fuels. Their draft now contains three binding pillars: cease new exploration, phase out existing production, and finance a fair shift for producing states.

France has pledged €500 million to the treaty’s envisioned just-transition fund, while Australia promised $100 million. Denmark, which ended new North Sea licensing in 2020, will host the secretariat in Copenhagen.

Oil exporters dismissed the initiative. “You cannot just decide to leave hydrocarbons in the ground and expect the market to follow,” Saudi negotiator Ahmad Al-Salowm said. “Energy security still runs on oil.”

Yet even some OPEC members signaled quiet interest. “Algeria will study the treaty once the legal text is public,” environment minister Samia Moualfi told reporters, noting that gas-rich Algeria faces mounting heat waves that have topped 49°C twice this year.

Investors are already pricing in tighter supply. Brent crude jumped 2.3% to $84.60 after Aagaard’s announcement, while shares in European oil majors slipped. Analysts at Goldman Sachs warned clients that “fragmented climate regimes raise stranded-asset risk.”

The treaty camp insists their goal is complementary, not hostile, to the UN process. “We still need the UN for emissions targets, but you don’t need consensus to stop drilling,” said Tzeporah Berman, chair of the Fossil Fuel Non-Proliferation Treaty Initiative. “Nuclear weapons were curbed by a minority of states first, then became global law.”

Background

The UN Framework Convention on Climate Change, signed in 1992, requires consensus among all 198 parties for decisions. That veto power has allowed a handful of fossil-fuel exporters to block every COP attempt to name coal, oil and gas as the problem, even as scientific reports make the link explicit.

Parallel treaties have shaped global policy before. The 1997 Mine Ban Treaty was drafted by Canada and 121 states after UN disarmament talks stalled; today 164 countries are party to it, though major powers like the US remain outside. The 2003 Framework Convention on Tobacco Control likewise began with only 40 signatories but now covers 90% of the world’s population.

What’s Next

The Danish coalition will publish the full treaty text on July 15, open it for signature at the UN in New York on September 23, and seek 50 ratifications by COP30 in Belém, Brazil next November to bring it into force. If they succeed, the first review conference is penciled for 2027, when members must table national phase-out schedules.

The bigger test is whether big emitters like Germany, Japan or even California join. Without the US or China the treaty covers less than 15% of global production, but backers argue that early entrants can wield market leverage by denying new export infrastructure and finance. “Every pipeline, every LNG terminal now faces a legal minefield,” Berman said. “The exit door is open.”