Representatives from Asian carbon market associations today signed an agreement to collaborate on a Common Carbon Framework (ACCF) between Asean countries, at the UN Cop 29 climate summit in Baku, Azerbaijan.
Representatives from the Malaysia Carbon Market Association, Asean Alliance on Carbon Market, Singapore Sustainable Finance Association, Thailand Carbon Market Club and Indonesia Carbon Trade Association signed a two-year agreement aimed at unlocking the potential of carbon project opportunities in Asean and promoting regional collaboration to reduce the costs of implementing carbon initiatives. Asean countries include Brunei Darussalam, Malaysia, Vietnam, Singapore, Cambodia, Indonesia, Lao PDR, Myanmar, Philippines, Thailand and Vietnam.
The framework is also aimed at fostering interoperability among the Asean carbon markets to increase market liquidity. This comprehensive carbon framework will serve as a catalyst for discourse, said Malaysia's minister of natural resources and environmental sustainability Nik Nazmi Nik Ahmad. It is an important step in achieving carbon market growth across Asean, to achieve a unified approach in establish an integrated carbon market and accelerate low-carbon investments, he added.
Malaysian exchange Bursa Malaysia introduced the concept of the ACCF last month at the Asean Carbon Forum, stating that the framework aspires to unlock projects unique to the southeast Asian region and create a stronger demand signal by creating interoperable carbon markets in the region to create a bigger market of supply and demand.
A number of southeast Asian countries, in particular Singapore, Malaysia, Indonesia and Thailand have been working on developing carbon markets. One aspect to explore under this framework is establishing areas mutual recognition on carbon methodologies, said Renard Siew, president of the Malaysia Carbon Market Association. If the framework proves to be successful, it will also catalyse the development of a pool of validators and verification bodies, he added. Leveraging on the Asean carbon market associations will also help in capacity building across the region.
The framework needs to be an effective market signalling vehicle to show the region is applying the highest integrity when developing carbon projects, said Natalia Rialucky Marsudi, deputy chair for intra-Asean Affairs at the Asean Alliance on Carbon Market. It will also advocate for a methodology that is "Asean-specific," and address the challenge of how to develop more trust in southeast Asian methodologies, she added.
