The Philippines and Singapore have struck their first Article 6 carbon credit deal, setting up a legal framework for trading emissions cuts between the two countries nearly two years after talks began. But observers say it will only deliver high‑integrity climate benefits if it is backed by a fully developed Article 6 rulebook for measuring and approving those cuts.
The Article 6 implementation agreement sets out the legal rules for how the two countries can generate and trade carbon credits under the mechanism.
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Singapore will retire 2 per cent of the carbon credits it gets under the deal so that this portion helps reduce global emissions instead of being used by any country or company. It will also set aside 5 per cent of its earnings from these credits to fund climate adaptation projects in the Philippines.
Philippine environment secretary Juan Miguel Cuna said the pact could help draw investments including those in renewable energy and waste management, as his Singaporean counterpart Grace Fu said it would be able to channel climate finance towards “impactful projects” in the Philippines.
While the carbon credits might accelerate the deployment of climate mitigation, observers say the signed legal agreement needs to be complemented by a “fully mature Article 6 rulebook”, which follows officially approved ways to calculate emissions cuts to sell credits into Article 6‑aligned markets.
“[The signed agreement] does not automatically cover all sectors. Only the forestry and energy sectors are ready [for carbon markets trading] at this time. Other sectors such as agriculture, transport and industry still need to have approved methodologies, monitoring systems, and more importantly authorisation procedures including corresponding adjustment rules,” said Jonathan Joson, a nature-based solutions advocate who heads the Philippine operations of Kennemer Eco Solutions, a Singapore-headquartered carbon solutions firm.
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Only the forestry and energy sectors are ready [for carbon markets trading] at this time. Other sectors such as agriculture, transport and industry still need to have authorisation procedures including corresponding adjustment rules.
Jonathan Joson, Philippine country manager, Kennemer Eco Solutions
With authorisation procedures, the government formally decides which projects or programmes are allowed to generate credits that can be transferred abroad, while corresponding adjustment rules are guidelines for how the country’s emissions inventory and nationally determined contributions accounting are adjusted when it exports those credits. This is designed to ensure that emissions reductions are not counted twice by both the seller and buyer country.
Forestry and grid‑connected energy projects often sit inside existing monitoring, reporting, and verification (MRV) systems which measure greenhouse gas emissions, report them transparently, and have them verified by an independent party. However, agriculture, with its smallholder farmers and dispersed practices, and transport, which has many actors like fuels and vehicles, as well as the industrial sector’s complex processes tend to have patchier data and weaker verification regimes, making high‑integrity credits harder to guarantee, according to researchers.
Singapore minister for sustainability and the environment Grace Fu (left) and Philippines environment secretary Juan Miguel Cuna (right) sign the Article 6.2 Implementation Agreement in an online briefing on 30 April at the Asean Climate Week. Image: DENR
Joel Chester Pagulayan, climate justice portfolio manager of nonprofit Oxfam Pilipinas, warned that the lack of a national framework for carbon markets in the country may allow rich countries and corporations to exploit the implementation agreement and use it as an “excuse” to reduce their carbon emissions at the expense of community rights and welfare.
The agreement includes the transfer of Internationally Transferred Mitigation Outcomes (ITMOs), which are carbon credits created by cutting emissions in one country that can be sold or transferred to another country to help meet its climate targets.
Under this agreement, for example, a renewable energy or forest project in the Philippines can generate carbon credits that Singapore can buy and use toward its own climate goals, while the Philippines receives climate finance and investment, he said.
“The absence of an overarching framework with appropriate environmental and social safeguards, rooted in climate justice and equity by the Philippines will pose risks of exploitation from richer countries and expose host communities and impacted sectors from reaping the benefits they deserve from carbon credit projects,” said Pagulayan.
He cited cases from United Nations-backed Reducing Emissions from Deforestation and Forest Degradation (REDD+) framework, where Indigenous and local community rights have been sidelined or violated, especially around land, consent, and benefit‑sharing. The initiative aims to generate positive incentives for curbing deforestation in developing countries by raising funds through carbon markets.
The Philippines is not the only Southeast Asian country without a national carbon market that has a bilateral agreement with Singapore. Vietnam, whose carbon market trading is planned to be fully operational around 2028, inked a deal with Singapore last year that allows projects in the socialist republic to generate carbon credits that can be transferred to the city-state. Thailand operates voluntary crediting schemes and is exploring an emissions trading system but has not yet implemented a nationwide compliance carbon market despite becoming first Southeast Asian nation to forge an Article 6 pact with Singapore last year.
Most Southeast Asian countries still lack a full-fledged legally operational national carbon market. Only Indonesia and Singapore have clear national‑level systems in place, while others are at various early or voluntary stages.
Indonesia is actively advancing Article 6 bilateral deals to support its climate goals, primarily collaborating with Norway, Japan, and South Korea, focused heavily on forest and land‑use credits. Singapore signed its first Article 6 implementation agreement with Papua New Guinea in 2023, followed by Ghana in 2024. It significantly ramped up its agreements last year, signing with Bhutan, Peru, Chile, Rwanda, Paraguay, and Mongolia.
