Singapore signs implementation agreement on carbon credits collaboration with Thailand

29 September 2025

On 19 August 2025, the Ministry of Trade and Industry (“MTI”) issued a press release announcing that Singapore and Thailand had signed an Implementation Agreement on carbon credits collaboration (“Agreement”) under Article 6 of the Paris Agreement (“Article 6”).

The Agreement establishes a legally binding bilateral framework for the generation and transfer of high-integrity carbon credits from projects in Thailand to Singapore, in line with Article 6 requirements. It sets out the process for authorising projects and providing the corresponding adjustments needed to prevent double counting of emissions reductions. Carbon credits authorised under the agreement may be used to offset up to 5% of a company’s taxable emissions under Singapore’s International Carbon Credits framework from 1 January 2024, subject to eligibility, and may also be used for compliance with binding international mitigation obligations such as Singapore’s Nationally Determined Contributions and the Carbon Offsetting and Reduction Scheme for International Aviation.

Singapore will contribute a value equivalent to a 5% share of proceeds from the authorised carbon credits to climate adaptation measures in Thailand, including areas such as sustainable forest management, flood resilience and water resources management. In addition, Singapore will cancel 2% of correspondingly adjusted carbon credits upon first issuance so that these credits cannot be sold, traded or used towards any emission targets, ensuring a net reduction in global emissions.

The Agreement aims to advance both countries’ climate ambitions by directing financing towards unlocking additional mitigation potential in Thailand. The carbon mitigation projects authorised under the Agreement will promote sustainable development and deliver tangible benefits to local communities, such as creation of jobs, improved waste management, enhanced energy efficiency, and reduction of environmental pollution.

This is Singapore’s eighth Implementation Agreement on carbon credits collaboration but its first with an ASEAN country.

Reference materials

The press release is available on the MTI website www.mti.gov.sg.