The Azerbaijan COP29 presidency scrapped the launch of a new climate fund with expected contributions from fossil fuel producers during the summit as the initiative risked interfering with negotiations over the post-2025 climate finance goal.

The COP29 hosts had planned to unveil the Climate Finance Action Fund (CFAF) – one of their most controversial flagship initiatives – at a “high level” event to coincide with the conference’s finance day on Thursday.

But the presidency quietly dropped the event while putting the initiative on hold until the end of COP29.

A source near the COP presidency told Climate Home News that the fund was deprioritised due to risks that it would interfere with negotiations on the new climate finance goal – the main outcome of the summit.

When Climate Home asked Azerbaijan’s lead negotiator Yalchin Rafiyev about it, he said that the COP hosts have established a working group to “work out a concept that would be workable and acceptable” for donor countries interested in joining the initiative.

He added that it is “a very complex process to establish a new fund” but that they have seen “a great interest” by the potential contributors from developing and developed countries.

‘Getting tangled up’ with NCQG

A COP29 source who did not want to be named told Climate Home that the presidency decided to deprioritise the initiative temporarily as it was getting tangled up with the negotiations over the new collective quantified goal (NCQG).

Governments are locked in tense discussions over a host of issues, including the size of the goal and who should be contributing towards it.

The source said that potential donors from developing countries were particularly worried that pitching money into Azerbaijan’s fund now would be seen as a precedent that could be used to push them to contribute to the NCQG as well. On top of this, developed countries might have counted any contributions into the CFA