At the first ASEAN-EU Ministerial Dialogue on Environment and Climate Change, the European Union and the Association of Southeast Asian Nations (ASEAN) convened a high-level side event to reinforce collaboration on carbon pricing and market mechanisms
This meeting highlighted the growing role of carbon pricing as a key tool for tackling climate change across both regions.
Supported by the ASEAN EU–German Climate Action Programme, the event brought together senior officials from ASEAN Member States, the ASEAN Secretariat, the EU, and key international climate organisations. It serves as a platform for advancing regional carbon pricing cooperation, particularly through initiatives such as the ASEAN Common Carbon Framework.
Regional progress through carbon markets
Carbon pricing mechanisms, including emissions trading systems and carbon taxes, are gaining attention in Southeast Asia as effective policy instruments to reduce greenhouse gas emissions. With ASEAN countries continuing to develop domestic frameworks, regional collaboration is now viewed as essential to scale impact and harmonise standards.
The EU shared valuable lessons on designing and implementing market-based climate policies. Since its launch in 2005, the EU ETS has driven significant reductions in emissions while generating revenues to support climate action and the transition to clean energy.
ASEAN Member States are already taking steps in this direction. Singapore has implemented a carbon tax and is actively promoting regional cooperation. Malaysia and Indonesia also highlighted national progress, showing how EU partnerships are supporting the development of robust domestic systems. These efforts collectively contribute to the broader regional ambition of aligning policies and promoting fair, effective climate governance.
The ASEAN common carbon framework
A key topic at the event was the ASEAN Common Carbon Framework, which hopes to foster policy convergence and shared methodologies across Southeast Asia. By aligning carbon pricing initiatives, the framework aims to enhance transparency, facilitate cross-border investment, and ultimately facilitate the linking of carbon markets within the region.
Participants agreed that building regional capacity and fostering policy dialogue are essential to the success of this vision. The event emphasised how knowledge-sharing and peer learning among ASEAN members can help address implementation challenges, better policy coherence, and promote equitable economic transitions across different national contexts.
EU support for technical expertise and capacity building
To further assist ASEAN partners, the European Union reaffirmed its commitment to providing targeted support through technical expertise, policy advice, and dedicated resources. A new Task Force focused on international carbon pricing cooperation has been established by the EU to help countries develop and scale effective mechanisms for carbon pricing cooperation.
This initiative will include training, capacity-building workshops, and policy dialogues aimed at reinforcing domestic systems while promoting regional cooperation. ASEAN participants welcomed the EU’s support and expressed strong interest in expanding this collaboration both bilaterally and at the regional level.
The event concluded with a joint reaffirmation of the importance of international cooperation on carbon pricing, especially in the lead-up to COP30. Both ASEAN and EU representatives acknowledged the potential of carbon markets to accelerate climate ambition, foster economic resilience, and support just transitions.
