Latest news with #AseanCommonCarbonFramework
Business Times
11-07-2025
- Business
- Business Times
Singapore aims to ink carbon credits transfer agreement with first Asean country by end-2025
[BANGKOK] Singapore is aiming to finalise carbon credit negotiations and ink its first transfer agreement with an Asean country by the end of this year, said Benedict Chia, director-general for climate change at Singapore's National Climate Change Secretariat on Wednesday (Jul 9). 'We hope that within the next few months, within this year, we will have more Asean countries being able to collaborate with Singapore. We are in advanced discussions with a number of them, including Thailand. So hopefully things can progress,' said Chia, who was speaking at a panel during the Asia Climate Summit organised by the International Emissions Trading Association. Singapore has signed memorandums of understanding (MOUs) with five Asean countries – Vietnam, Cambodia, Laos, the Philippines and most recently Malaysia – to collaborate on carbon credits. However, none of these MOUs have resulted in the signing of a carbon credits transfer agreement yet. It is only when these agreements are signed can the city-state buy carbon credits from the host countries and use them to meet its climate targets, according to Article 6 of the Paris Agreement. They set out legally binding frameworks and processes for the generation and international transfer of carbon credits. A NEWSLETTER FOR YOU Friday, 12.30 pm ESG Insights An exclusive weekly report on the latest environmental, social and governance issues. Sign Up Sign Up Thus far, Singapore has only inked carbon credit transfer agreements with seven countries – Papua New Guinea, Ghana, Bhutan, Peru, Chile, Rwanda and Paraguay. Unified system for carbon credit trading While there are no government-to-government agreements yet between Asean countries, industry players in the region are looking to advance regional cooperation on carbon markets, with the establishment of the Asean Common Carbon Framework at the end of last year. The framework aims to create a unified system for carbon credit trading in South-east Asia, and steps have been taken to finalise governance structures, discuss methodologies and formulate an implementation road map. Five carbon market associations from Indonesia, Malaysia, Singapore and Thailand are participating in this initiative. When discussing with potential host countries to collaborate on carbon credits, Chia said that Singapore focuses on three factors: projects that are aligned with the national interest of the host country; the involvement of local partners and businesses; as well as ensuring the local communities benefit.
Business Times
18-05-2025
- Business
- Business Times
Harmonised framework within Asean will attract investors: global carbon trading body
[SINGAPORE] A harmonised carbon trading framework across all South-east Asian markets will help boost private sector investments, said Dirk Forrister, chief executive officer of the International Emissions Trading Association, a non-profit organisation representing businesses committed to effective carbon markets. While the ideal scenario will be for Asean to develop an integrated carbon market, having harmonised policies on carbon integrity standards, verification processes and project requirements will help reduce the friction that buyers and sellers of carbon credits typically face in the region. 'It's inefficient to have a different rule book every place you go. It's just adds cost and delay,' said Forrister in an interview with The Business Times. 'If they are harmonised and the policy or the procedures are familiar everywhere, the benchmarks are set in a way that you know there's equal stringency across the programme, so that there's strength in the targets. I think that can attract investment, because it will make it a lot easier for a market participant in any of those economies to sell their stuff or to buy from each other,' he added. While an integrated market is not likely to happen anytime soon, five carbon market associations from the region are partnering each other to support the Asean Common Carbon Framework. The framework aims to create a unified system for carbon credit trading in South-east Asia; and steps have been taken to finalise governance structures, discuss methodologies and formulate an implementation road map. A NEWSLETTER FOR YOU Friday, 12.30 pm ESG Insights An exclusive weekly report on the latest environmental, social and governance issues. Sign Up Sign Up If a unified carbon framework in Asean does come to pass, this could potentially mean – for example – that a corporate buyer from Switzerland who is already buying carbon credits from a carbon project in Thailand need not renegotiate another deal from scratch if he wants to purchase carbon credits from another developer in Indonesia. 'The patchwork quilt of regulation is something you want to avoid because you don't want the hesitation of not understanding if you feel... programmes are too different. So I think it's a wise move to continue the efforts to harmonise, even with the knowledge that you can use (Article) 6.4 (of the Paris Agreement),' said Forrister. The adoption of Article 6.4 at last year's United Nations' COP29 climate change conference – nine years after the international treaty to limit global warming entered into force – established a global carbon trading mechanism that could help governments meet their climate targets as emissions reductions can now be transferred across national borders through the buying and selling or carbon credits. While it has been described by carbon market participants as a watershed moment for the industry, the nuts and bolts of how it will be implemented – including the setting up of a global carbon registry – has yet to be sorted out. But before that falls in place, Forrister said, Asean can get things going by developing its own registry systems that are harmonised across the region. These registries should be able to contain accurate carbon market data that can be tracked and updated in real time after every transaction. This would help enhance transparency and ensure that there is no double counting of carbon credits. This means that each carbon credit that is being used to offset emissions would not be counted more than once. Besides setting up carbon registries, Forrister also noted that more Asean governments should develop a compliance regime to drive up domestic demand for carbon credits as this will give investors more confidence on how serious these policymakers are about developing their carbon markets. This would be unlike the previous global carbon trading regime under the Kyoto Protocol – the predecessor of the Paris Agreement – where developing countries, which make up most of Asean, are mainly just sellers of carbon credits. Compliance regimes in Asean Several Asean markets already have a compliance regime in place, or are beginning to put one in place. Singapore currently has a carbon tax of S$25 per tonne of carbon dioxide equivalent. It will increase to S$45 next year with an aim of landing somewhere between S$50 and S$80 by 2030. Companies that have to pay a carbon tax are able to offset 5 per cent of their taxable emissions through carbon credits. Indonesia has an emissions trading systems just for its power sector, but is planning to expand it to include other high-emitting sectors, including cement, fertilisers and steel. Thailand is in the process of establishing an emissions trading system by 2030, where businesses may be allowed to meet up to 15 per cent of their compliance obligations using carbon credits. Malaysia announced it is going to introduce a carbon tax by 2026 on certain high-emitting sectors, and is exploring the setting up of an emissions trading scheme. 'All of a sudden, it's like, if you're not in the club, you look bad, right? You're not living up to the regional expectation,' said Forrister. 'So I... think that this is incredibly healthy broadly across Asia and Asean. It's just that we've got to get them over the line,' he added. While there is a lot of pressure on the financial sector to provide the capital needed for decarbonisation, Forrister said what financiers can do is ultimately contained within the government framework that has been set out. When asked what he hopes to see at the next annual climate change conference that will take place in Belem, Brazil, this year, he said that the industry hopes for 'a show of force from countries that they intend to use markets to achieve higher ambition, to drive more finance and tap into nature'. 'The business community isn't just going to pony up the cash, just to get criticised for it. It has to be something that you feel is a business reason to do,' he added.
The Star
15-05-2025
- Business
- The Star
Harmonising carbon market governance across Asean
AS climate ambition intensifies globally, Asean stands at a critical juncture, one where the decisions we make today on carbon pricing and markets will shape the resilience and prosperity of our region for decades to come. With mounting pressure to decarbonise amid diverse economic realities, the Asean Common Carbon Framework (ACCF) offers a timely and strategic opportunity to align our collective efforts. It is more than a technical framework; it is a platform for climate collaboration, economic integration, and environmental integrity.
