Dr Linkham Douangsavanh and Ms Grace Fu display the newly signed carbon-credit agreement during a virtual signing ceremony.  --Photo Agriculture and Environment News

Laos, Singapore open new carbon market opportunities

The governments of Laos and Singapore have agreed to create a carbon-credit framework that could bring new climate finance and sustainable development opportunities to Laos.
Laos’ Minister of Agriculture and Environment, Dr Linkham Douangsavanh, and Singapore’s Minister for Sustainability and the Environment and Minister-in-charge of Trade Relations, Ms Grace Fu, signed the agreement via video link on Monday, according to Singapore’s Ministry of Trade and Industry.
The agreement creates a legally binding framework for developing and transferring high-quality carbon credits from projects in Laos under Article 6 of the Paris Agreement.
It could open a new source of finance for projects that cut greenhouse gas emissions while supporting environmental protection and economic opportunities in Laos.
One of the key benefits is Singapore’s commitment to channel 5 percent of proceeds from authorised carbon credits into climate adaptation measures in Laos.
This means carbon-credit projects could generate funds not only for emissions reduction but also for communities and activities that need to adapt to the effects of climate change.
Dr Linkham said the agreement would take the long-standing partnership between Laos and Singapore to a new level.
“It gives us a transparent, high-integrity framework to develop carbon credit projects that create jobs, protect our environment, and channel climate finance towards adaptation in Laos,” he was quoted as saying.
The agreement could also create opportunities for businesses and project developers to develop carbon projects that meet international standards.
Eligible projects could generate carbon credits that are transferred to Singapore for use in areas such as corporate emissions obligations and international climate commitments.
Singapore allows eligible international carbon credits to be used to offset up to 5 percent of a company’s taxable emissions under its carbon pricing system.
The agreement also includes safeguards to ensure carbon trading contributes to an overall reduction in global emissions.
Singapore has committed to cancel 2 percent of the carbon credits authorised under the agreement when they are first issued. These credits cannot be sold, traded or counted towards any country’s emissions targets.
Ms Fu said the agreement would create new opportunities for businesses and communities while strengthening climate cooperation between the two ASEAN members.
She said Singapore and Laos could work together to support a low-carbon future that delivers practical benefits across the region.
The agreement is Singapore’s 12th carbon-credit agreement with another country and its fourth with an ASEAN member state, following agreements with Thailand, the Philippines and Vietnam.
The two sides will later announce the process for approving carbon-credit projects and the eligible methods for measuring emissions reductions.
For Laos, the agreement provides a pathway to attract more climate finance while encouraging projects that protect natural resources, reduce pollution and create employment.
It also gives Lao project developers a clearer route to participate in the growing international carbon market, provided their projects meet the standards and requirements agreed by both countries.

By Times Reporters
 (Latest Update September 8, 2026)