In a groundbreaking move for regional climate cooperation, Singapore and Thailand have signed a landmark bilateral Implementation Agreement on carbon credits under Article 6 of the Paris Agreement. Formalized on August 19, 2025, during the 9th Singapore Regional Business Forum in Bangkok, this legally binding pact marks Singapore’s first such agreement with an Association of Southeast Asian Nations (ASEAN) member state. It sets a powerful precedent for collaborative climate action in a region grappling with the dual challenges of economic growth and environmental sustainability.
A Milestone in ASEAN Climate Collaboration
The agreement, signed by Singapore’s Minister for Manpower and Minister-in-charge of Energy and Science & Technology, Dr. Tan See Leng, and Thailand’s Minister of Natural Resources and Environment, Mr. Chalermchai Sri-on, paves the way for the generation and transfer of high-integrity carbon credits from Thailand to Singapore. These credits, aligned with international standards, will support projects in Thailand that promise both environmental and socio-economic benefits, ranging from clean energy and zero-emission transport to forestry and waste management. Dr. Tan stated that the agreement will be “the first between two ASEAN member states” and that it marked “a significant milestone in our bilateral climate cooperation”.
Dr. Tan underscored the broader significance of this partnership, noting that it reflects a shared commitment to tackling global challenges. He also highlighted the symbolic timing of the agreement, coinciding with the 60th anniversary of diplomatic relations between Singapore and Thailand. Meanwhile, Mr. Chalermchai emphasized the deal as a testament to ASEAN’s potential to drive credible greenhouse gas mitigation, positioning Thailand as an aspiring regional hub for carbon credit initiatives. 
This pact is not merely a bilateral achievement but a signal of intent for Southeast Asia, a region often criticized for lagging in unified climate strategies despite its vulnerability to rising sea levels, deforestation, and extreme weather events. By establishing a framework for carbon credit transfers, Singapore and Thailand are laying the groundwork for a trusted carbon market that could inspire similar collaborations across ASEAN. Dr. Tan said “I am confident that our collaborations on this front will serve as a pathfinder for the region, by demonstrating how countries can work together to achieve both economic and environmental good outcomes.”
Unlocking Climate Finance for Thailand
Under the agreement, Singapore will channel financing into Thai projects designed to deliver tangible environmental outcomes. These initiatives include renewable energy developments, sustainable forest management, and innovations in waste reduction. “This Agreement will unlock additional climate finance and catalyse and uplift investments into credible carbon projects in Thailand, such as in forestry and e-mobility” Dr. Tan told the forum. A portion of the proceeds from carbon credits will also be allocated to bolster climate adaptation efforts in Thailand, such as flood resilience programs—an urgent priority given the country’s history of devastating floods, including the 2011 disaster that caused damages estimated at over 1.4 trillion Thai Baht (~US$46 billion at the time).
This financial mechanism aligns with the Paris Agreement’s Article 6, which encourages international cooperation to achieve emissions reduction targets through market-based approaches. For Singapore, a city-state with limited land for large-scale renewable projects, purchasing carbon credits from Thailand offers a practical way to offset emissions while supporting regional sustainability. For Thailand, the influx of climate finance provides a much-needed boost to green infrastructure and community resilience projects.
Environmental analysts view this as a critical step toward unlocking climate finance in Southeast Asia, where funding gaps often hinder ambitious green policies. The agreement could serve as a model for other ASEAN nations, many of which possess significant potential for carbon offset projects but lack the capital or technical expertise to implement them at scale.
Thailand’s Ambition: A Regional Carbon Market Hub
Thailand’s aspirations extend beyond this bilateral deal. The country is positioning itself as a leader in carbon market development within ASEAN, a vision supported by recent collaborations between The Stock Exchange of Thailand (SET) and the Intercontinental Exchange (ICE). In February 2025, the two entities signed a Memorandum of Understanding to advance Thailand’s carbon market infrastructure, leveraging ICE’s expertise in global energy and environmental markets alongside SET’s regional influence.
The partnership aims to establish a transparent carbon trading platform, a move seen as essential for Thai and Asian businesses transitioning to a low-carbon economy. SET President Asadej Kongsiri described carbon credit trading as a cornerstone of the exchange’s 2025 corporate strategy, aligning with Thailand’s national policy framework, including the forthcoming Climate Change Act. This legislation is expected to introduce carbon taxation, emissions trading, and carbon credits as key pricing mechanisms to incentivize reductions in greenhouse gas emissions.
The SET is actively exploring options to develop the necessary trading infrastructure to ensure fairness, transparency, and reliability in carbon markets. By integrating ICE’s market expertise with SET’s policy alignment, the collaboration seeks to create a comprehensive ecosystem that supports Thailand’s Nationally Determined Contribution (NDC) under the Paris Agreement while opening new opportunities for businesses and investors.
Broader Implications for Southeast Asia
The Singapore-Thailand agreement arrives at a pivotal moment for ASEAN, as member states face mounting pressure to meet their Paris Agreement commitments amid rapid industrialization and urbanization. The region contributes approximately 7% of global greenhouse gas emissions, with significant contributions from deforestation, coal-heavy energy grids, and agricultural practices. Yet, funding and technological barriers have historically slowed progress toward net-zero targets.
Carbon credit markets offer a potential solution by incentivizing emissions reductions through financial mechanisms. However, their success hinges on credibility and transparency—issues that have plagued earlier carbon offset schemes globally. The emphasis on “high-integrity” credits in the Singapore-Thailand pact suggests a commitment to rigorous standards, potentially addressing past criticisms of carbon markets as mere greenwashing tools.
Moreover, the agreement could catalyze similar partnerships within ASEAN. Countries like Indonesia and Malaysia, with vast forest resources and renewable energy potential, stand to benefit from carbon credit frameworks if trust and accountability are prioritized. Singapore, often seen as a financial and technological hub in the region, is well-positioned to lead such initiatives, offering expertise and investment to neighbors with complementary strengths.
Challenges and Opportunities Ahead
Despite the optimism surrounding the agreement, challenges remain. Establishing a functional carbon market requires robust monitoring, reporting, and verification systems to ensure that credited projects genuinely reduce emissions. Thailand’s diverse landscape—from urban centers like Bangkok to rural forest communities—presents logistical hurdles in implementing and auditing these initiatives. Additionally, equitable distribution of benefits must be prioritized to avoid exacerbating social inequalities, a concern often raised in climate finance discussions.
For Singapore, the agreement underscores its pragmatic approach to climate action. With limited domestic capacity for emissions reductions due to its small size, the city-state relies on international cooperation to meet its ambitious target of net-zero emissions by 2050. Partnerships like this one with Thailand allow Singapore to offset its carbon footprint while fostering regional goodwill—a dual benefit in a geopolitically complex region.
The collaboration also highlights the evolving role of ASEAN in global climate governance. While the bloc has often been sidelined in international climate talks compared to larger emitters like China or the United States, initiatives like the Singapore-Thailand pact demonstrate that smaller nations can drive meaningful change through innovative partnerships. If successful, this agreement could elevate ASEAN’s voice on the world stage, advocating for tailored climate solutions that reflect the region’s unique challenges and opportunities.
A Forward-Looking Partnership
As Southeast Asia navigates the urgent demands of climate change, the Singapore-Thailand carbon credits agreement stands as a beacon of hope and a test case for regional cooperation. “It is through all of us working together, Singapore and Thailand, alongside with the rest of ASEAN, we can prevail by turning challenges into opportunities” Dr. Tan said. It bridges economic imperatives with environmental stewardship, offering a blueprint for how ASEAN nations can work together to address one of the defining challenges of our time.
Yet, the true impact of this pact will depend on execution. Can Thailand translate climate finance into measurable emissions reductions and community benefits? Will Singapore’s investment inspire broader trust in carbon markets across the region? As both nations move forward, their partnership may well shape the future of climate action in Southeast Asia, proving that even in a region of diverse priorities, unity on shared goals is not just possible but essential.
