Unravelling the voluntary carbon market in Southeast Asia

The voluntary carbon market (VCM) stands as one of the most dynamic arenas in the global effort to combat climate change, with its potential for growth and impact becoming increasingly evident. Industry data reveals that the VCM traded nearly 111 million tons CO₂e of carbon credits in 2023. These volumes highlight significant investments by major companies in carbon compensation initiatives and reflect how organisations are integrating these credits into their net zero strategies.

In this report, we explore the characteristics of the VCM market, focusing on the  developments in Southeast Asia, market challenges, key players, project types, and attributes of different credits. Our analysis also highlights critical considerations for organisations looking to participate in the VCM, emphasising the need for a strategic, well-planned approach to navigate this complex and rapidly evolving landscape.

Integrity in the carbon market is critical concern in today's landscape. Challenges across the market value chain underscore the need for proper due diligence. One major risk is "over crediting," where credits may not reflect to actual emissions reductions, exposing buyers to accusations of greenwashing. To mitigate these reputational risks, it is important to implement rigorous processes that ensure purchased credits align with verifiable reductions.

Efforts to strengthen integrity are already underway, with initiatives such as Singapore’s push for greater transparency in carbon markets. As newer standards evolve, such platforms offer a unified source of credibility, which is vital for increasing market participation. For stakeholders, it is imperative to adhere to both international and domestic regulations, meticulously screen project methodologies, and align with internal policies.