Singapore, Indonesia sign MOU on carbon credit cooperation

By Romel S. Gurky

Singapore and Indonesia have signed a memorandum of understanding to develop cooperation on carbon credits under Article 6 of the Paris Agreement, paving the way for cross border carbon market collaboration and climate finance projects.

The agreement was signed during the Singapore Indonesia Leaders' Retreat by Singapore Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong and Indonesia's Environment Minister and Head of the Environmental Control Agency Mohammad Jumhur Hidayat.

Under the MOU, the two countries will exchange information and technical expertise on carbon markets, work toward an implementation agreement aligned with Article 6 of the Paris Agreement, and identify high integrity carbon credit projects.

The projects are expected to contribute to both countries' Nationally Determined Contributions (NDCs) while creating jobs, generating income and supporting environmental protection for local and indigenous communities in Indonesia.

Gan said the MOU reflects the two countries' intention to establish a framework that channels climate finance into projects such as forest conservation, coastal ecosystem restoration and clean technology deployment.

He said the projects are intended to reduce emissions while providing direct economic benefits to communities affected by climate change.

Jumhur said the agreement marks an important step in advancing high integrity carbon market cooperation and is expected to mobilize investment for emissions reductions, biodiversity conservation and ecosystem restoration.

The MOU forms part of broader agreements reached during the annual leaders' retreat, where Singapore and Indonesia agreed to strengthen cooperation in renewable energy, digital infrastructure and the green economy.

Konservasi Indonesia welcomed the agreement, saying expanded cooperation under Article 6 would support high integrity carbon projects that reduce emissions, protect biodiversity and improve livelihoods for communities living near forests, mangroves and coastal ecosystems.

Climate Impact X Chief Executive Officer Choo Oi Yee said Indonesia offers significant opportunities for carbon projects while Singapore provides market infrastructure that can connect those projects with global buyers. She added that Climate Impact X will continue working with IDX Carbon and Indonesian project developers to support the development of a regional carbon market and the ASEAN Common Carbon Framework.

Editing by Alexander Ginting