Singapore and Philippines Sign Implementation Agreement to Advance Cross-Border Carbon Credit Markets

MANILA, May 3, 2026 – Singapore and Philippines have signed a landmark Implementation Agreement (IA) on carbon credits collaboration under Article 6 of the Paris Agreement, marking a significant step towards scaling cross-border carbon markets in Southeast Asia.

The agreement, signed during ASEAN Climate Week in Manila, establishes a formal framework for both countries to cooperate in the generation, transfer and use of carbon credits aligned with international standards.

From cooperation to implementation

The agreement builds on earlier collaboration between the two countries, including a Memorandum of Understanding signed in 2024, and represents a shift from intent to execution in bilateral carbon market development.

Under Article 6 of the Paris Agreement, countries can voluntarily cooperate to meet their climate targets by transferring carbon credits generated through emissions reduction projects. The Implementation Agreement provides the legal and operational foundation for such transfers, including provisions for authorisation and corresponding adjustments to ensure environmental integrity.

For Singapore, the agreement is part of a broader strategy to secure access to high-quality international carbon credits to complement domestic decarbonisation efforts. For the Philippines, it opens up new avenues to attract climate finance into projects such as renewable energy, nature-based solutions and industrial transition initiatives.

Strengthening regional carbon market infrastructure

The Singapore–Philippines agreement reflects a growing trend across Asia-Pacific to build structured and credible carbon market ecosystems.

Singapore has been actively expanding its network of Article 6 implementation agreements with multiple countries, positioning itself as a regional hub for carbon services and cross-border credit flows. These agreements are designed to ensure that carbon credits meet stringent environmental integrity standards and can be used by companies to offset a portion of their emissions under Singapore’s carbon tax framework.

At the same time, countries like the Philippines are leveraging their natural and industrial potential to generate carbon credits, particularly in areas such as forestry, renewable energy and transition projects. The collaboration is expected to facilitate the development of projects that deliver both emissions reductions and broader sustainable development benefits.

Earlier agreements and initiatives have highlighted the potential for projects such as early coal plant retirement and ecosystem restoration to generate carbon credits while supporting local communities and economic development.

Unlocking climate finance and project pipelines

A key outcome of the agreement is the expected mobilisation of climate finance. By providing a clear framework for credit generation and transfer, the IA reduces uncertainty for investors and project developers, enabling the scaling of carbon credit projects across sectors. This is particularly relevant for emerging markets like the Philippines, where access to international capital can accelerate climate mitigation efforts.

The agreement is also expected to support the development of project pipelines that align with both countries’ nationally determined contributions under the Paris Agreement, while ensuring that emissions reductions are measurable, verifiable and additional.

Implications for businesses and carbon markets

For companies operating in Singapore, the agreement expands the pool of eligible international carbon credits that may be used to offset emissions, subject to regulatory limits and quality criteria.

This is particularly important as businesses face increasing pressure to decarbonise while managing costs, with carbon credits emerging as a complementary tool alongside operational emissions reductions.

For the broader region, the agreement signals a maturing of carbon markets, where bilateral cooperation is becoming a key mechanism for scaling supply and ensuring credibility.

The Singapore–Philippines Implementation Agreement underscores a broader shift in climate policy across Asia-Pacific, where countries are moving beyond voluntary commitments towards structured, market-based mechanisms.

As more bilateral agreements are signed and operationalised, the region is expected to see greater integration of carbon markets, increased cross-border capital flows, and a growing pipeline of high-integrity carbon projects.

In this evolving landscape, partnerships such as this are likely to play a central role in shaping how carbon markets contribute to both climate goals and economic development across Southeast Asia.