Several carbon market associations from ASEAN countries have agreed to initiate a dialogue on carbon methodologies, although comprehensive cooperation across all areas, including trading, remains a long-term objective.
The first step is likely to be mutual recognition of carbon methodologies, which could accelerate climate action by allowing a carbon project in one country to apply methods developed in another, said Wei-nee Chen, Head of Carbon Markets at Bursa Malaysia.
ASEAN member countries include Brunei Darussalam, Myanmar, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.
To date, Indonesia, Malaysia, and Thailand have each developed or announced plans to create national carbon methodologies tailored to their own projects. Other ASEAN countries have opted to collaborate with international registries like Verra or Gold Standard.
Additionally, several ASEAN nations have sought to establish themselves as hubs for carbon credit trading, raising concerns that markets could become fragmented without a unified benchmark, resulting in split liquidity.
“We don’t have the time to reinvent the wheel for each country,” said Suhaini Haron, Senior Director of Corporate Strategy at the Malaysia Forest Fund.
“Every ASEAN country should identify its strengths, focus on those, and engage in mutual cooperation to recognize each other’s status.”
“For example, Thailand already has well-developed methodologies for waste management or renewable energy. Malaysia, then, could focus on forestry credits, as could Indonesia, given its extensive forests that are suitable for carbon offsetting,” she concluded.
The initiative, known as the ASEAN Common Carbon Framework, also aims to establish a shared resource pool, especially for Validation and Verification Bodies (VVBs), which are essential actors in carbon project development but remain scarce across Southeast Asia.
Formal connections among the region’s emissions trading schemes may come at a later stage.
The following associations have agreed to cooperate:
- Indonesia Carbon Trade Association;
- Malaysia Carbon Market Association;
- Singapore Sustainable Finance Association; and
- Thailand Carbon Markets Club.
It is expected that a formal Memorandum of Understanding is likely to be signed at COP29 in Baku next month.
