Singapore and Thailand Launch Cross-Border Carbon Credit Scheme Under Paris Agreement

Singapore and Thailand have begun accepting applications for carbon credit projects under their bilateral implementation agreement, the two governments announced on Tuesday, marking Singapore's fifth such project call and its first with an Association of Southeast Asian Nations (ASEAN) member.

The two countries signed the implementation agreement on carbon credits cooperation, aligned with Article 6 of the Paris Agreement, in August last year.

The agreement establishes a legally binding framework for the cross-border transfer of high-integrity, correspondingly adjusted carbon credits, a mechanism designed to prevent double counting of emissions reductions in both countries' national inventories.

Eligible projects may draw on methodologies under internationally recognized standards including Gold Standard, Verra, the Global Carbon Council (GCC), and REDD+ programs, spanning sectors from agriculture and renewable energy to waste management.

The generated carbon credits may be eligible for use by Singapore-based, carbon tax-liable companies to offset up to 5% of their taxable emissions under Singapore's International Carbon Credit framework. Credits may also be used to help fulfill binding national climate commitments.

Beyond emissions reductions, authorized projects are expected to advance sustainable development in Thailand, including job creation and reduced environmental pollution, according to the announcement.

Applications will be jointly reviewed by both governments on a rolling basis. The process involves three stages: an initial concept note, a full project design document validated by a third-party auditor, and a final step for corresponding adjustments once carbon credits are issued.

As part of its commitment to net emissions reductions, Singapore will cancel 2% of the correspondingly adjusted carbon credits authorized under the agreement at first issuance, meaning those units cannot be sold, traded, or counted toward any country's climate targets.

Singapore has now signed implementation agreements with ten countries, including Papua New Guinea, Ghana, Bhutan, Chile, Peru, Rwanda, Paraguay, Vietnam, and Mongolia, in addition to Thailand.

The city-state, described as an 'alternative-energy disadvantaged country with limited domestic mitigation potential', views international carbon market cooperation as central to its goal of reaching net zero emissions by 2050.