What NDCs 3.0 Are (and Aren’t) Saying About Fossil Fuel Production

The Paris Agreement was designed so that countries submit national climate plans known as nationally determined contributions (NDCs) every 5 years. Subsequently, a collective assessment of progress known as the global stocktake reviews the NDCs for their consistency with Paris Agreement goals. The outcome of the global stocktake feeds into the next generation of NDCs.

The first global stocktake resulted in a landmark agreement at COP 28 in 2023 on “transitioning away from fossil fuels in energy systems, in a just, orderly and equitable manner.” This deal was especially welcome given that meeting Paris Agreement goals requires governments to plan for a managed phase-out of fossil fuel production. In 1.5°C-aligned scenarios, coal production declines by 95% by 2050, and oil and gas production declines by at least 65% by 2050 and up to 100% in some pathways.

This year marks a pivotal moment in climate action, as countries are meant to submit their third-generation NDCs (NDCs 3.0). So far, 24 countries have already done so. These new NDCs 3.0 should respond to the outcomes of the global stocktake—but are they rising to the challenge? Specifically, do the submitted NDCs confront the imperative to transition away from fossil fuels, particularly as it relates to fossil fuel production? We focus on production here due to the imperative to reduce production to meet Paris Agreement goals, but demand reduction and substitution are equally important to include in NDCs.

Reducing emissions from production is not enough

The good news first: 10 out of the 16 fossil fuel-producing countries who have submitted their NDC 3.0 mention fossil fuel production—a clear majority. In addition, three countries that do not produce fossil fuels mention fossil fuel production: the Marshall Islands, Moldova, and Uruguay (which has oil and gas exploration). Acknowledging the central cause of climate change is a good start. 

The bad news: Most references to fossil fuel production—7 countries out of 10— focus on reducing emissions from production (e.g., during extraction or processing), rather than phasing down production itself. In addition, one country, Ecuador, highlights measures to adapt fossil fuel production infrastructure to a changing climate, such as putting pipelines underground to avoid landslides. The United Arab Emirates’ NDC goes into detail on how its oil and gas sector will use carbon capture, utilization and storage technology, end routine flaring, reduce methane emissions, and electrify operations to mitigate emissions. The United States’ NDC, similarly, mentions regulations to reduce methane emissions in the oil and gas sector. 

While reducing production emissions is important, it does nothing to address Scope 3 emissions—those resulting from the downstream combustion of the fuel, which are by far the largest component of fossil fuel emissions. A better approach would be to set quantitative targets for reducing fossil fuel production altogether.

No new licences, no new public financing

There are some good examples that countries can emulate. The United Kingdom’s NDC states that it will undertake consultation on halting new oil and gas licences to explore new fields. The science is clear that there is no room for new oil and gas fields, or new coal mines, in a 1.5°C world. Ending the issuance of new exploration licences is a critical step toward ending new fields altogether. 

Another good example is the reference in Canada’s NDC to its ending of new direct public support for the international unabated fossil fuel energy sector. Ending international public finance for fossil fuels is essential to transitioning away from fossil fuels.  Canada is a member of the Clean Energy Transition Partnership, signatories of which have reduced their fossil fuel international public finance by two thirds.

Economic diversification and just transition

Other good examples countries can draw on relate to economic diversification and just transition to reduce fossil fuel dependency. Canada’s NDC, for example, references its Canadian Sustainable Jobs Act and Sustainable Jobs Training Fund, which aim to ensure that workers and communities have the necessary tools and support to thrive in a net-zero economy. Similarly, the United Kingdom’s NDC says the government will accelerate the delivery of an Energy Skills Passport to support oil and gas workers in transitioning to renewable energy. The United Arab Emirates’ NDC notes that the country has prioritized economic diversification, with the non-oil sector’s share of GDP increasing from 30%–40% in the 1970s to around 75% today, including hospitality, real estate, industry, construction, and transportation. 

International cooperation

Perhaps the most interesting examples of discussion of fossil fuel production in NDCs relate to international cooperation. Kenya’s NDC states that to forego “the benefits of exploiting her fossil fuel resources,” “significant compensatory international support will be required.” 

International alliances are also mentioned. The Marshall Islands notes its membership in the Beyond Oil and Gas Alliance and the Powering Past Coal Alliance, while calling on fossil fuel producers “to act with the same ambition” and “collectively plan a just, fair and orderly transition away from fossil fuels.” 

Finally, Brazil’s NDC states that Brazil would “welcome the launching of international work for the definition of schedules for transitioning away from fossil fuels,” with “developed countries taking the lead.” Could this be a clue as to what Brazil is aiming for at COP 30? Brazil’s NDC is notably less forthcoming on how the country itself plans to transition away from fossil fuel production, however.

What’s next? 

NDCs 3.0 are a timely opportunity for fossil fuel-producing countries to include information and commitments relating to fossil fuel production. This can increase the transparency and clarity of their targets, as well as catalyze international momentum toward policies and support schemes to limit or wind down fossil fuel production. With more than 100 NDCs 3.0 still to come by the end of the year, countries should not let this chance pass them by.

At minimum, countries should commit to no new exploration licences for coal, oil, and gas, and to phase out fossil fuel subsidies. They should also put forward quantitative targets to reduce or phase out fossil fuel production and use, with countries that have the highest capacity to transition taking the lead in line with common but differentiated responsibilities and respective capabilities. 

Finally, NDCs should provide a pathway for ending public financial support for fossil fuels, including production. Subsidizing fossil fuels and other forms of public financial support is the opposite of “transitioning away.” Only 4 of the NDCs 3.0 mention fossil fuel subsidy reform. All NDCs need to include a roadmap for aligning public spending with the phase down of fossil fuels: anything less is insufficient to truly transition away from fossil fuels.

Correction: The original article stated that 3 of the NDCs 3.0 mention fossil fuel subsidy reform. The correct number is 4.