THIMPHU: Bhutan and Singapore have launched four innovative climate projects under Article 6 co-operation to develop Bhutan’s carbon market and low-carbon pathway.
The projects, announced by the Department of Energy and Climate Change (DECC) under the Ministry of Energy and Natural Resources (MoENR) include a nationwide clean cooking initiative, an integrated cooking and space heating mitigation programme, the Bhutan Rural Biogas Initiative, and the Thimphu Biogas and Bio-fertiliser Initiative.
During a three-day programme titled “From Agreement to Action: Bhutan–Singapore Article 6 – Capacity Building for Carbon Projects,” which concluded Thursday (Mar 5), various discussions were held to bring in more projects.
Nearly 100 participants from the public, corporate, and private sectors took part in the programme, which was jointly organised by the MoENR and TERRAMA PTE. Limited from Singapore.
Globally, Article 6 of the Paris Agreement is opening new pathways for high-integrity, government-backed carbon markets.
In Bhutan, the Clean Cooking Initiative aims to distribute energy-efficient, induction-based cookstoves across 20 dzongkhags (districts), reducing emissions from traditional cooking practices while improving rural livelihoods.
The Integrated Cooking and Space Heating Carbon Mitigation Programme combines efficient cooking and heating solutions to cut greenhouse gas emissions in both urban and rural households.
Meanwhile, the Bhutan Rural Biogas Initiative will promote biogas technology to convert organic waste into energy, supporting rural energy access.
In Thimphu, the Biogas and Bio-fertiliser Initiative will turn urban organic waste into renewable energy and fertiliser, creating a low-carbon urban solution with direct community benefits.
These projects mark the first tangible steps under the Singapore–Bhutan Implementation Agreement, signed on February 28, 2025.
Carbon market
Bhutan’s carbon market, built on robust governance and transparency, ensures that only verified, additional, and real emission reductions are traded.
The Bhutan National Carbon Registry now tracks every carbon credit from issuance to retirement or cancellation. Each credit carries a unique serial number with details such as country, sector, and project year, making the system fully transparent.
An Analyst at Druk Holding and Investments Limited, Zeerie Chhodeon, explained that the registry allows every carbon unit to be tracked. “This ensures transparency, integrity, and efficient management of Bhutan’s carbon market.”
The Bhutan Carbon Fund (BCF), she said, provides financing and oversight for eligible activities aligned with Bhutan’s Nationally Determined Contributions (NDCs).
“Renewable energy, energy efficiency, low-carbon transport, sustainable agriculture, forestry restoration, and livestock management are among the sectors supported,” Zerrie Chhodeon added.
The framework ensures that local communities and ecosystems receive equitable benefits, reinforcing Bhutan’s commitment to sustainable development alongside climate action.
Article 6
Article 6 of the Paris Agreement opens pathways for high-integrity, government-backed carbon markets. It allows Bhutan to trade Internationally Transferred Mitigation Outcomes (ITMOs) and mobilise climate finance while supporting low-carbon development.
The Chairperson of the Royal Civil Service Commission and former Director General of DECC, Tashi Pem, highlighted the significance of Article 6 for Bhutan.
“Participation under Article 6 offers pathways to mobilise climate finance, accelerate low-carbon development, support rural livelihoods, strengthen biodiversity conservation, enhance ecosystem resilience, and safeguard national climate commitments,” she said.
According to the fee structure under Article 6, it balances administrative and environmental considerations.
Administrative fees cover account creation, project registration, entity identification, ITMO listing, and authorisation of Letters of Approval and Letters of Intent.
Corresponding adjustment fees, set at U$5 to US$25 per tonne of carbon dioxide equivalent, reflect the opportunity cost to Bhutan’s NDC.
Additionally, two percent of issued ITMOs are cancelled to support global mitigation, and five percent contribute to Bhutan’s national adaptation fund through the BCF.
Investments
An Assistant Vice President at GenZero, Puar Si Liang, said that investment decisions consider political and economic stability, NDC commitments, carbon pricing, and carbon market readiness.
“Project-specific risks, such as credit demand, climate impact, methodology, delivery, and integrity risks, are also assessed,” he said. “Partnerships with credible entities that have strong track records and stakeholder relationships are crucial.”
Singapore, constrained by its 735.7-square-kilometre land area compared to Bhutan’s 38,394 square kilometres, depends heavily on international cooperation to meet its 2030 and 2035 NDCs and net-zero target by 2050. Its estimated carbon credit demand for 2030 is 25.1 million tonnes, according to the 2024 Biennial Transparency Report.
The Bhutan–Singapore corridor thus represents a strategic partnership for both nations.
Moreover, DECC officials said that Bhutan is also exploring carbon trading opportunities with Korea, Sweden, and other European and Asian countries.
Climate challenges
Bhutan remains the world’s first carbon-negative country and has pledged to maintain carbon neutrality in its NDC. Forests cover approximately 69.71 percent of its land, exceeding the constitutional minimum of 60 per cent.
Bhutan is highly vulnerable to climate change and faces significant adaptation costs estimated at US$ 14 billion, across sectors including water, agriculture, energy, health, settlements, climate services, and disaster risk reduction.
The Third Nationally Determined Contribution (NDC 3.0) projects a cumulative mitigation potential of up to 53,865.6 gigagrams (Gg) of carbon dioxide equivalent (CO₂e) until 2035, with potential interventions across energy, transport, agriculture, forestry, and waste.
Bhutan’s net emissions were negative 9.7 million metric tonnes of CO₂e in 2022, maintaining its carbon-negative status.
Bhutan faces multiple challenges, including climate-induced hazards such as floods, glacial lake outburst floods, landslides, and extreme weather. Energy and water security, biodiversity loss, human–wildlife conflict, pollution, and waste management pressures also pose significant risks. Limited access to climate finance, technology, and technical capacity further complicates mitigation and adaptation efforts.
Bhutan’s carbon market offers opportunities across sectors, from forestry and renewable energy to low-carbon transport and waste management. The country has gained international recognition as the world’s first carbon-negative nation and remains steadfast in its commitment to carbon neutrality.
The Deputy Chief of DECC, Langa Dorji, highlighted that Bhutan faces significant climate-related challenges.
“Highly vulnerable to climate change, the country is exposed to hazards such as floods, landslides, glacial lake outburst floods, and extreme weather events, which threaten lives, infrastructure, and livelihoods,” he said.
Bhutan’s environmental governance is guided by a robust legal and policy framework. The Middle Path – National Environment Strategy 2020 aims to minimise environmental impacts from development, while the Environment Assessment Act 2000 and National Environment Protection Act 2007 provide the legal mechanisms to assess, prevent, and mitigate environmental harm.
“These frameworks ensure that development is not just economically beneficial but also environmentally sustainable. Principles such as the precautionary approach, the polluter pays principle, and intergenerational equity guide our decision-making,” Langa Dorji said.
An Assistant Environment Officer at DECC, Dechen Dorji, presented Bhutan’s NDC 3.0, outlining the country’s potential to reduce emissions across sectors including energy, transport, agriculture, forestry, and waste management.
“Our cumulative mitigation potential is estimated at over 53,000 Gg CO₂e by 2035. Achieving this requires international climate finance to support implementation while maintaining our carbon neutrality,” Dechen Dorji said.
To mobilise climate finance, Bhutan established the Bhutan Carbon Market. This market allows the country to generate high-quality carbon credits while ensuring transparency, environmental integrity, and equitable benefit-sharing.
“The overall turnaround time depends on how proactively both parties engage in the process,” Dechen Dorji added. - Kuensel/ANN
