Bhutan and Singapore have launched the first call pertaining to applications for carbon credit projects under the bilateral Implementation Agreement (IA), marking a major step in operationalizing Article 6 of the Paris Agreement.
The announcement opens opportunities for project developers to seek authorization for initiatives that can generate high-integrity carbon credits while supporting sustainable development in Bhutan. The call follows the signing of the IA on February 28, 2025, which establishes the framework for the generation, transfer, and use of Internationally Transferred Mitigation Outcomes (ITMOs) between the two countries.
Beginning December 1, 2025, developers can submit applications for authorization, which will be reviewed jointly by both governments on a rolling basis. Bhutan will assess alignment with its Carbon Market Framework and national policies, while Singapore will evaluate compliance with its ICC Framework.
With this, Bhutan becomes the third country to join Singapore’s carbon project application calls, following similar cooperation with Ghana and Peru.
Meanwhile, the partnership is poised to mobilize substantial climate finance to accelerate Bhutan’s transition to a low-carbon economy while supporting Singapore’s efforts to achieve its national climate targets. Under the IA, project developers are expected to invest in activities within Bhutan that reduce or remove greenhouse gas emissions, producing high-quality, verifiable carbon credits.
To qualify for authorization, projects must demonstrate strong environmental integrity, align with Bhutan’s national climate policies, and generate tangible social and economic benefits for local communities. These benefits may include creating new jobs, improving access to clean water, enhancing public health, promoting sustainable forest and soil management, strengthening energy security, and reducing pollution.
Potential project areas are diverse and strategically significant, encompassing sustainable agriculture, renewable energy development, efficient waste management, and agroforestry initiatives. By combining climate action with socio-economic development, the partnership aims to create projects that not only mitigate emissions but also deliver lasting value to Bhutanese communities and ecosystems, exemplifying how international cooperation can drive both environmental and human development goals.
Bhutan remains a net carbon sink, with its forests absorbing approximately 6.8 million tonnes of carbon dioxide equivalent annually against emissions of about 2.2 million tonnes. This surplus enables participation in international carbon markets while maintaining the country’s carbon-neutral status.
For Singapore, the agreement supports its third Nationally Determined Contribution (NDC), which aims to cap emissions at 60 million metric tonnes of CO2 equivalent by 2030 and achieve net-zero by 2050. Under Article 6 of the Paris Agreement, higher-emission countries may offset emissions by purchasing carbon credits from lower-emission nations. Five percent of proceeds from carbon credit transactions will go to the Global Adaptation Fund, in line with Paris Agreement obligations.
Once authorized and verified, carbon credits generated in Bhutan may be transferred to Singapore as ITMOs. These credits may be used by Singapore-based carbon tax-liable companies to offset up to 5 percent of taxable emissions. Corresponding adjustments will be applied by Bhutan to ensure transparency and prevent double counting.
The application and authorization process consists of three stages corresponding to different phases of project development. The first two stages will require applicants to submit comprehensive information on project design and implementation plans in preparation for authorization. The final stage concerns ITMO issuance and the application of corresponding adjustments to the carbon credits generated, in accordance with Article 6 and Bhutan’s Carbon Market Framework.
Applications will be assessed on a rolling basis by both governments against their respective criteria. For Bhutan, all projects must meet the requirements of the national Carbon Market Framework.
Additionally, all projects must meet the eligibility criteria outlined in the Singapore-Bhutan Implementation Agreement. This includes adhering to the approved list of carbon crediting programmes and methodologies, which define the standards, procedures, and types of activities eligible for generating high-quality carbon credits. Compliance with these criteria ensures that projects maintain environmental integrity, transparency, and consistency with both countries’ climate commitments, while safeguarding the credibility of carbon credits that may be transferred and used under the Paris Agreement framework.
Meanwhile, the list of carbon crediting programmes and approved methodologies will be reviewed and updated regularly to ensure it remains relevant, effective, and aligned with the highest standards of environmental integrity. This ongoing review process helps guarantee that all projects authorized under the Singapore-Bhutan Implementation Agreement continue to deliver credible, verifiable, and high-quality carbon credits.
To support transparency and make information readily accessible to project developers and the public, the Ministry of Energy and Natural Resources and the National Environment Commission have provided detailed guidance, documentation, and updates on their official websites. These resources include instructions on the application process, eligibility criteria, and approved methodologies, ensuring that all stakeholders have the necessary information to participate confidently and responsibly in Bhutan’s carbon market initiatives.
Nidup Lhamo
FromThimphu
