Bhutan and Singapore advance carbon credit cooperation with new project proposals

2026-03-02 - 08:25

In order to advance Bhutan’s carbon market agenda, the Department of Energy & Climate Change (DECC), Ministry of Energy and Natural Resources (MoENR) revealed that currently the nation has finalized four project proposals in collaboration with Singapore. According to the United Nations Framwork Convention on Climate Change (UNFCCC), Article 6 of the Paris Agreement enables international cooperation to tackle climate change and to unlock financial support for developing countries. The Singapore-Bhutan Implementation Agreement was signed on 28th February 2025. Currently, the technical teams from Bhutan and Singapore are working on finalizing the administrative forms and templates required for the operationalization of the agreement. These administrative forms will guide project applicants and developers in the design and implementation of carbon projects in Bhutan, as well as in the sale of their carbon credits. An official from DECC said that they are pursuing opportunities for carbon trading with other European and Asian countries, such as Korea and Sweden. Since the opening of the call, MoENR has received four project proposals under the bilateral cooperation framework. It includes one clean cooking initiative focusing on the nationwide distribution of energy-efficient induction-based cookstoves across all 20 dzongkhags, one Integrated Cooking and Space Heating Carbon Mitigation Program, and two project proposals: the Bhutan Rural Biogas Initiative, and the Thimphu Biogas and Bio-fertilizer Initiative. “These projects are currently in the development phase and will subsequently move to implementation and credit generation,” said a DECC official. The forms include Stage A (Application Form), Stage B (Authorization), Stage C (Internationally Transferred Mitigation Outcomes {ITMOs}). In addition, the technical teams are also working on the development of fee structures, methodologies, and arrangements for joint committee meetings. The DECC said, “Bhutan is also conducting a mitigation potential assessment across various sectors.” “This assessment will provide estimates of the quantity and volume of carbon credits that can be generated and sold through the initiation of sector-specific projects,” the department added. Bhutan’s forests sequester over 6.8 million tonnes of CO2 while the nation emits only over 2.2 million tonnes each year. This provides an opportunity for Bhutan to not only generate revenue for climate finance but also help countries achieve climate goals. Additionally, the Bhutan Climate Fund (BCF), to be managed within DECC, MoENR, will facilitate the aggregation and management of carbon credits generated from Bhutan’s carbon projects. The DECC said that Bhutan’s National Carbon Registry is now fully operational, serving as an essential platform for tracking, recording, and tracing carbon credits. The registry features both tracking and transaction capabilities and is integrated with the Climate Action Data Trust, which will be imperative in supporting the project pipelines. All generated revenue and charges from the projects will be deposited directly into the BCF and reinvested in climate-related initiatives in Bhutan. The DECC said, “For example, under the Singapore-Bhutan Implementation Arrangement (IA), 5 percent of the credits generated, along with the Corresponding Adjustment Fees approved by the Royal Government of Bhutan, will be used for adaptation to climate change.”