Voluntary carbon markets in South East Asian economies TABLE 4 Carbon registry and voluntary carbon market status Country Carbon credit projects Standards Progress to date Malaysia Host country for renewable energy certificates, technology-based and nature-based carbon credits.Adopted Verified Carbon Standard (VCS) from Verra and Gold Standard.Transacted ~17k Verra-registered carbon credits. Viet Nam In process of establishing voluntary domestic ASEAN Carbon Credit Exchange (CCTPA) with pilot in 2025 - expected to be operational by 2028. Currently trades on global carbon markets.- Thailand Host country for renewable energy certificates and nature-based carbon credits.Adopted local carbon standards verified by Thailand Voluntary Emission Reduction and other standards.Transacted ~ 1m carbon credits. Indonesia Host country for technology-based and nature-based carbon credits.Own standard (SRN) with mutual recognition agreements (MRAs) with JCM and Gold Standard.Transacted ~500k carbon credits from energy sector. Singapore Buyer of carbon credit projects from other host countries.Accepts credits verified by global standards such as Verra and Gold Standard.Transacted ~1m nature- based carbon credits. Source: Bain & Company et al.40 Strategic pathway for fully functional markets Emerging Asian markets are gradually improving frameworks and expanding carbon credit development, but they still face challenges in capturing full-abatement potential. To fully harness their capabilities, these countries must urgently address critical challenges to stimulate domestic demand, while enhancing a high-quality supply pipeline to satisfy increasing international demands. Actions could include the following: –Catalyse domestic demand to boost local carbon market activity: emerging economies must enhance carbon pricing tools to raise local demand. Clear credit-use policies across scopes 1, 2 and 3 emissions are needed to ensure corporate confidence. Incentives such as tax benefits and subsidies can further boost credit purchases. –Strengthen support for high-quality carbon credit projects: expanding high-quality supply requires clear standards and methodologies that explicitly distinguish between removal credits (e.g. forest carbon sinks, direct air capture) and avoidance credits (e.g. renewable energy substitution), as well as making carbon projects more bankable through long-term offtakes. Companies can co-develop or pre-finance high- quality projects to secure future offsets. Early- stage concessional finance and aggregated offtake models can help capital intensive projects to reach final investment decision (FID). –Develop collaborative infrastructure to improve integrity: investment in MRV systems and integrated registries is critical for trust and transparency. Domestic exchanges and a strong ecosystem of intermediaries will ensure market liquidity and integrity, allowing efficient and transparent trading. In addition to supplying growing local demand, these nations have the potential to become major carbon credit suppliers globally, leveraging their abundant natural assets for nature-based projects. Enhancing international connectivity and harmonizing global standards, with support from initiatives such as the Integrity Council for the Voluntary Carbon Market (ICVCM) and Article 6 of the Paris Agreement, are essential for them to capture this opportunity. These frameworks provide governments with established guidelines to align standards, verify credit integrity and facilitate cross- border recognition, strengthening their position in global carbon markets. Asia’s Carbon Markets: Strategic Imperatives for Corporations 19

Asia's Carbon Markets Strategic Imperatives for Corporations 2025