NOCs produce more than half of the world’s oil and gas output, yet they have remained largely absent from climate debates. Unlike international oil companies, they are state-owned actors that shape and are shaped by national policy. In the last COP cycles, however, their presence has grown.

At COP28, 34 NOCs signed the Oil & Gas Decarbonization Charter, pledging to cut operational emissions, end routine flaring and reduce methane intensity to 0.2 percent by 2030. The Charter, however, does not address emissions generated when the oil and gas they produce is burned, and many signatories continue approving new oil and gas projects, patterns inconsistent with the global stocktake’s call to transition away from fossil fuels.

Beyond COPs, climate interest in NOCs is growing. NRGI has received more invitations to speak at climate forums about NOCs and collaborate on the topic. Other organizations are also expanding work in this space, such as EDF on methane measurement and IISD on NOC transition pathways. Yet, despite this momentum, few governments are integrating NOCs into their climate policies.

Most national pledges overlook NOCs

Only ten countries mentioned their NOC in their NDC 2.0 (in any form, including just a passing reference): Azerbaijan, Cameroon, China, Colombia, Ecuador, Oman, Mexico, Qatar, the UAE and Venezuela. In the current wave of NDC 3.0 updates, only five countries have done so to date: Azerbaijan, Angola, Bangladesh, the UAE, and Venezuela.

As state-owned enterprises, NOCs embody the government’s direct influence—and responsibility—over an important source of emissions. For example, in Mexico the energy sector accounts for around 64 percent of national greenhouse gas emissions, and Pemex alone produces about 95 percent of the country’s hydrocarbons.

Countries that have not yet submitted their NDC 3.0 can still integrate them in this round; those that have can incorporate them into implementation frameworks so that climate commitments remain credible.

However, a mention is not a commitment to action. Below are core elements of robust NOC integration into NDCs. To date, only the first category appears in any NDCs.

• Set explicit carbon and methane reduction targets for the NOC.
  • Colombia’s NDC 2.0 mentions that “Ecopetrol committed in 2019 to reduce its emissions by 20% by 2030 in line with the country target defined in 2015.”
  • Qatar’s NDC 2.0 states that “Qatar Petroleum (QP) is committed to zero routine flaring by 2030, with a long-term goal to reduce flaring in onshore facilities to the absolute minimum.”
  • Mexico’s NDC 2.0 notes that “Petróleos Mexicanos has set a methane gas utilization target of 98%, considering the production of existing and new fields.”
  • The UAE’s NDC 3.0 mentions the NOC’s ambition “to achieve net zero by 2045” and “reduce carbon intensity by 25% by 2030,” and a target to “have methane intensity below 0.15% by 2025.”
• Express those targets in absolute terms, with defined baselines and reference years.
• Cover full value chain emissions—including Scope 3 emissions—associated with current, planned and projected operations, with clear milestones for national action on Scope 1 and 2.
• Disclose or estimate the NOC’s share of national emissions.
• Explicitly align NOC strategies and capital spending with national climate targets.
• Establish a framework for tracking NOC-specific emissions and progress.
• Acknowledge exposure to transition risks (economic, fiscal and market impacts from a long-term decline in oil and gas demand).
• Task the NOC with contributing to a just transition such as regional economic diversification, workforce reskilling and responsible infrastructure decommissioning.
• Involve NOC leadership and workers in the NDC drafting process.

Why stronger NOC targets could unlock climate finance

International lenders and climate finance institutions increasingly treat NDCs as investment plans. When NOCs are major emitters, they need NOC-specific targets and disclosures. Without this level of transparency, it is difficult to assess investment needs or align climate finance instruments.

Methane reduction is where climate finance can move fastest. Around 80 percent of oil and gas abatement options are cost-neutral or profitable. NOCs could lead the way. With targeted funding for leak detection, flaring reduction and monitoring, governments could secure rapid, measurable results.

For countries like Mexico or Nigeria, where regulations already exist but enforcement is weak, including these targets in NDCs could strengthen oversight and attract international support for implementation.

Climate planning around NOCs must also address just transition responsibilities

The UNFCCC has emphasized that this next round must include the social and economic plans that make emissions targets viable—and this just transition focus is set to increase at COP30. For countries with NOCs, such plans are impossible without them.

In many low- and middle-income countries, NOCs are major employers and fiscal pillars. NOCs also often safeguard national resources and ensure energy security. Their operations are tied to public services, regional development and politics, making them vital actors and potential obstacles to change. For example, Pemex has resisted methane regulation and enforcement efforts, shifted targets and limited independent oversight.

Global just transition agendas, including the UNFCCC’s Just Transition Work Programme, rarely mention NOCs. Recognizing their role is crucial to building just transition strategies that are socially inclusive and politically viable.

In Mexico, oil-dependent states of Campeche and Tabasco are already feeling the effects of declining production—from shrinking fiscal revenues to job losses. Mexico’s climate policy should incorporate explicit just transition measures linked to Pemex’s operations, focusing on regional economic diversification, workforce reskilling and responsible decommissioning of oil infrastructure.

How can COP30 advance the integration of NOCs in climate action?

Brazil—where Petrobras’s role continues to expose the tensions between climate ambition and fossil expansion—offers a key stage to keep NOCs in focus and advance their integration into national climate policies. This means embedding NOCs into national climate frameworks with measurable targets, transparent reporting and clear roles in just transition strategies.

If the right framing and direction are set, COP30 can help governments, investors and climate advocates to embed NOCs into the architecture of climate governance—ensuring that the actors most central to the fossil economy become equally central to its transformation.

President Claudia Sheinbaum has pledged that Mexico will reach net-zero emissions by 2050. To achieve this, the country’s updated NDC must go beyond technical greenhouse gas (GHG) reduction targets. It should provide a clear roadmap that links climate action to real improvements in people’s lives, including more stable jobs, stronger communities, and a future-ready economy.

In this context, Pemex must play a central role. The energy sector accounts for 64% of the country’s GHG emissions, and Pemex is responsible for 95% of hydrocarbon production and the bulk of associated infrastructure. In Mexico, to talk about hydrocarbons is essentially to talk about Pemex.

Why Pemex?

International experience shows that state-owned oil companies are still unprepared for the challenges of the energy transition, including declining oil demand. Governments have a decisive role to play. By setting clear policy signals and creating financing mechanisms, they can help these companies shift toward new business models.

The Mexican state holds a particularly strong influence over Pemex, given the company’s heavy reliance on government support. In 2025 and 2026 alone, Pemex faces debt maturities of US$24 billion, while the proposed 2026 budget allocates MXN 263.5 billion for debt servicing. That figure is double the 2025 allocation, equivalent to half of the resources earmarked for senior citizens’ pensions and six times the proposed environmental budget.

A stronger, more decisive commitment from Pemex would send a powerful signal that Mexico is willing to align its state-owned company with its decarbonization and just transition goals. Such a step would not only reinforce national climate ambition but also build confidence among the international community, the financial sector and the public.

Integrating Pemex into Mexico’s NDC 3.0: three priorities

1. Reduce methane emissions

Methane is 25 to 80 times more potent than CO₂ and poses serious health risks to communities living near oil facilities. Between 2012 and 2021, Pemex’s largest emission increases came from this gas.

Between 2021 and 2024, Pemex’s methane emissions fell by 29 percent. The company launched its first sustainability plan and voiced its commitment to the World Bank’s Zero Routine Flaring by 2030 initiative. However, Pemex’s methane output remains higher than a decade ago and above that of its international peers. Cutting these emissions is both urgent and strategic, as proven technological solutions exist and, in many cases, are cost-effective. The updated NDC offers the right framework for Pemex to adopt absolute, phased reduction targets, improve measurement and transparency, and join the Oil & Gas Methane Partnership (OGMP 2.0). Doing so would position Mexico as a global leader in methane mitigation.

2. Manage transition risks

Pemex ranks 11th among 58 state-owned oil companies most exposed to transition risks, according to a recent NRGI analysis. Up to US$10 billion in assets could become uneconomic under the International Energy Agency’s Announced Pledges Scenario, posing major risks for public revenues, jobs, and communities tied to the oil industry.

Mexico's updated NDC should respond by promoting transparent risk assessments, redirecting investments toward lower-carbon, higher-return projects, encouraging business diversification, and fostering joint ventures with the Federal Electricity Commission (CFE). It should also establish stronger corporate governance mechanisms under the Ministry of Energy’s (SENER) oversight to ensure planning is consistent with sustainability goals.

3. Just transition plans for oil-producing regions

States such as Campeche and Tabasco, heavily dependent on oil revenues, are already experiencing the impacts of declining production. To ensure no one is left behind, Mexico’s NDC should include just transition plans and the responsible decommissioning of infrastructure. This roadmap should prioritize economic diversification, workforce retraining, tailored educational programs, and greater transparency on environmental and health impacts.

These measures are in line with the outcomes of Mexico’s Local Conference of Youth proposals (2025 LCOY) and the Ministry of the Environment and Natural Resources’ (SEMARNAT) agenda for NDC 3.0, can foster a transition that delivers tangible benefits to the communities most dependent on oil.

Pemex at the center of Mexico’s climate action

The NDC gives Mexico a critical chance to raise its climate ambition, demonstrate international leadership, and put Pemex on a sustainable path. Explicitly including the company would send a clear signal of commitment to a just and orderly transition, in step with the global call to move beyond fossil fuels.

For decades, Pemex has been at the center of Mexico’s energy policy. It must now be at the heart of its climate response. This is the moment to show that commitment and accelerate progress toward net-zero emissions by 2050, building a more equitable, transparent future that delivers for all Mexicans.

Last week, Claudia Sheinbaum started her six-year term as Mexico’s president. Among great expectations for change, many are puzzling over how she might honour her background as a climate scientist while also upholding the legacy of her predecessor and ally Andrés Manuel López Obrador.

His administration doubled down on fossil fuel production and unconditionally picked up the tab for Pemex – Mexico’s national oil company – despite its debts exceeding $100 billion dollars, about 6 percent of Mexico’s gross domestic product.

 In her inauguration speech to Congress last Tuesday, Sheinbaum said: “National consumption will continue to be the fundamental objective of Pemex’s oil production, limited to production of 1.8 million barrels per day. We will promote energy efficiency and the transition to renewable energy sources to meet the growth in energy demand.” Can she and Mexico have their cake and eat it too?...