Laos and Singapore sign carbon credit agreement

Laos and Singapore have signed a legally binding agreement to establish a framework for the generation and transfer of carbon credits under the Paris Agreement. This partnership aims to turn emissions reductions from Laos’ forests and agricultural projects into a source of foreign investment and climate funding.

Under the agreement, Laos intends to use these credits to meet national climate targets, including a 60 percent reduction in emissions by 2030 and reaching net zero by 2050. To prevent double counting, both nations will apply corresponding adjustments to their greenhouse gas inventories.

Singapore will direct 5 percent of proceeds from authorized transactions toward climate adaptation in Laos and will cancel 2 percent of authorized credits upon issuance. Laos will retain a portion of the credits generated through international projects, with at least 10 percent of credits from international cooperation required to remain in the country under 2025 rules. All transactions must be processed through the Bank of Laos or commercial banks.