Singapore and Vietnam sign Implementation Agreement on carbon credits collaboration : Allen & Gledhill

23 October 2025

On 16 September 2025, Singapore and Vietnam signed an Implementation Agreement on carbon credits collaboration under Article 6 of the Paris Agreement (“Article 6”), affirming their shared commitment to international carbon market cooperation and to making a substantive contribution to global efforts to tackle climate change. The Implementation Agreement was signed virtually by Singapore’s Minister for Sustainability and the Environment and Minister-in-Charge of Trade Relations Grace Fu and Vietnam’s Acting Minister of Agriculture and Environment Tran Duc Thang.

The Implementation Agreement establishes a legally binding bilateral framework for the generation and transfer of carbon credits from carbon mitigation projects aligned with Article 6. The framework provides the foundation for Vietnamese organisations and businesses to register greenhouse gas (“GHG”) emission reduction projects and generate carbon credits, with the results recognised and transferred to Singapore.

Singapore’s Ministry of Trade and Industry (“MTI”) states that Singapore is committed to channelling the value equivalent to 5% share of proceeds from authorised carbon credits towards climate adaptation measures in Vietnam. Singapore is also committed to having 2% of the correspondingly adjusted carbon credits authorised under this Implementation Agreement cancelled at first issuance. The carbon credits that are cancelled cannot be sold, traded or counted towards any country’s emission targets, and serves as a contribution towards a net reduction of global emissions. Cooperation under the Implementation Agreement will be guided by Vietnam’s climate priorities and support Vietnam's mitigation efforts.

Vietnam’s Ministry of Agriculture and Environment (“MAE”) notes that the deal, a first of its kind for Vietnam, will enable the creation and transfer of high-quality carbon credits, opening new avenues for climate finance and investment in sustainable development.

Vietnam’s Acting Minister Thang noted that the Implementation Agreement “marks a significant step forward in climate cooperation between our two nations, affirming Vietnam and Singapore’s role and responsibility in promoting the exchange of greenhouse gas emission reduction outcomes and carbon credits”. He also said that the Implementation Agreement will allow Vietnam businesses to unlock new climate finance sources, encouraging investment in advanced technology, and fostering sustainable agriculture and a circular economy. Acting Minister Thang expressed his hope that Singapore enterprises will actively cooperate and invest in projects in Vietnam to create high-quality carbon credits, noting that this collaboration will help shape a regional carbon market where both Vietnam and Singapore play a leading and connecting role.

Singapore’s Minister Fu stated that the partnership “will catalyse the development of climate change mitigation activities that reduce emissions, foster more regional cooperation to address the pressing challenges of climate change, and open up additional pathways towards sustainable development”.

The MAE notes that cooperation between Vietnam and Singapore is expected to promote GHG emission reduction activities and attract international capital to Vietnam, bringing practical benefits to local communities, such as creating jobs and improving access to clean water, while also helping Vietnam enhance its energy security, reduce environmental pollution, and achieve sustainable development.