Ecobiz.asia — Singapore and Indonesia have signed a bilateral agreement to develop cross-border carbon credit trading under Article 6 of the Paris Agreement, marking a significant step toward operationalizing international carbon markets between the two countries.
The Memorandum of Understanding (MoU) for Collaboration on Carbon Credits under Article 6 of the Paris Agreement was signed by Indonesia’s Minister of Environment Mohammad Jumhur Hidayat and Singapore’s Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong during the annual Leaders’ Retreat in Jakarta on Monday (July 6, 2026).
The signing was witnessed by Indonesian President Prabowo Subianto and Singaporean Prime Minister Lawrence Wong as part of a broader package of bilateral agreements.
According to press release by Indonesia’s Ministry of Environment, the two governments will now negotiate an Implementation Agreement that will establish the operational framework for authorizing, verifying, and transferring Internationally Transferred Mitigation Outcomes (ITMOs) under Article 6.
The agreement will also define the corresponding adjustment mechanism, a key safeguard under the Paris Agreement that prevents double counting of greenhouse gas emission reductions by ensuring that only one country claims the mitigation outcome toward its climate targets.
Gan Kim Yong said Singapore is committed to being a trusted partner in developing a carbon market that is credible, transparent, and mutually beneficial.
He said the agreement would provide a framework for channeling climate finance into high-integrity carbon projects, including forest conservation, coastal ecosystem restoration, and other low-carbon initiatives that create economic opportunities while delivering benefits to local and Indigenous communities.
The carbon credit agreement builds on growing climate cooperation between the two countries. During the same occasion, Singapore and Indonesia also announced a Memorandum of Understanding on Bilateral Partnership for Environmental Cooperation, previously signed by Minister Jumhur Hidayat and Singapore’s Minister for Sustainability and the Environment Grace Fu, to strengthen collaboration on environmental protection and climate action. ***
