Singapore and Thailand Sign Landmark ASEAN Carbon Market Agreement

Singapore and Thailand have entered into a milestone agreement to cooperate on carbon markets under Article 6 of the Paris Agreement. Announced during the Singapore Regional Business Forum in Bangkok, the deal is Singapore’s eighth such partnership—and its first with a fellow ASEAN nation.

Water monitor lizard seen at the front of Lumphini Park, the green heart of Bangkok. AI generated picture.

The agreement establishes a binding framework for transferring correspondingly adjusted carbon credits under Article 6.2, setting the stage for cross-border collaboration on international carbon trading. The signing was officiated by Singapore’s Minister for Manpower and Minister-in-charge of Energy and Science and Technology, Tan See Leng, alongside Thailand’s Minister of Natural Resources and Environment, Chalermchai Sri-on.

‘This implementation agreement is a testament to our strong bilateral ties and collective resolve to implement the Paris Agreement in practical and impactful ways’, said Minister Tan. He emphasised the pact’s role as ‘a pathfinder for the region, demonstrating how Southeast Asia can develop and scale high-quality carbon credit projects that will drive meaningful emissions reductions, while unlocking new opportunities in the carbon market for businesses.’

Thailand expects the framework to boost financing for a wide range of Article 6-aligned initiatives, including forestry, renewable energy, and zero-emission transport. ‘We value Singapore's partnership in unlocking climate finance and advancing credible carbon credit projects in Thailand—from forestry and clean energy to zero-emission transport—that deliver environmental, economic, and social benefits for our people’, Minister Chalermchai noted.

Under the deal, Singapore-based companies can use the credits to offset up to 5% of their taxable emissions through the city-state’s International Carbon Credits (ICC) scheme. The credits may also contribute toward national climate pledges (NDCs) or be used by airlines under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).

In addition, Singapore pledged to channel 5% of proceeds from credit sales into climate adaptation projects in Thailand, such as flood resilience, forest management, and water resource programs. A further 2% of credits will be cancelled upon issuance to ensure a tangible global emissions reduction.

While this is the first Article 6 agreement between Singapore and an ASEAN partner, Singapore has already signed similar deals with Papua New Guinea, Ghana, Bhutan, Peru, Chile, Rwanda, and Paraguay.