Bhutan and Singapore have formalized a landmark partnership under Article 6 of the Paris Agreement, marking Bhutan’s official entry into international carbon markets. Signed on February 28, 2025, the Implementation Agreement leverages Bhutan’s status as the world’s first carbon-negative country—where 72% of the land is covered by forests acting as significant carbon sinks—while connecting it to Singapore’s robust financial infrastructure, regulatory clarity, and advanced carbon trading ecosystem. The collaboration aims to channel high-integrity carbon credits from Bhutan to global buyers, supported by the World Bank’s facilitation of investment dialogues such as the recent Investor Roundtable on the Bhutan Climate Fund.

Bhutan has established a comprehensive Carbon Markets Policy Framework, launched a national carbon registry linked to the Climate Action Data Trust, and strengthened institutional capacity through targeted training. Efforts are also underway to aggregate credits from projects across nine sectors, creating scalable investment opportunities. These steps position Bhutan to attract climate finance aligned with its Nationally Determined Contributions and carbon-neutral economy vision.

Singapore, in turn, brings experience in building rules-based markets, digital MRV solutions, and transaction platforms that foster trust and transparency. The partnership exemplifies how a country with high-quality carbon supply and another with market connectivity can jointly drive climate innovation, enabling cross-border financing that supports low-carbon development across Asia and contributes to global decarbonization goals.

Link: https://blogs.worldbank.org/en/transport/Advancing_Carbon_Market_Innovation_through_Partnership