ACS 2025: Voluntary-Compliance Divide Narrows, but Barriers Remain
Voluntary and compliance carbon markets are showing signs of convergence, but policy gaps, energy constraints and fragmented rules still hinder broader uptake, said government and private-sector representatives at a panel on Thursday during the Asia Climate Summit in Bangkok.
“The lines between the voluntary space and compliance space are blurred,” said Benedict Chia, director general of Singapore’s National Climate Change Secretariat. He noted that voluntary standards are increasingly referenced in compliance settings, creating more cross-intersections between systems.
Charis Yeap, Southeast Asia regional lead for green finance and carbon pricing mechanisms at the U.K. Foreign, Commonwealth & Development Office, described the trend as a shift toward “carbon markets without the voluntary,” reflecting how the distinction between market types is becoming less relevant in practice.
Panelists pointed to efforts such as the ASEAN Common Carbon Framework, which aims to align standards and improve compatibility across jurisdictions. The framework is designed to reference international methodologies while supporting both compliance and voluntary credit use.
Chia also emphasized the importance of consistency — rather than uniformity — in rulemaking, noting that differences across countries are necessary to reflect national circumstances.
From a corporate perspective, Spencer Low, head of regional sustainability at Google, said Asia remains a difficult region for scaling carbon-free energy due to infrastructure and policy constraints. “We need more firm, dispatchable clean power, and the ability to scale that is still very limited,” he said.
Low explained that Google relies on long-term offtake agreements or direct project investments for renewable energy procurement, and uses bundled certificates to account for Scope 2 emissions. The company expects to address approximately 4 million metric tons of residual emissions by 2030 through the use of carbon removal credits.
“Corporations must start by decarbonizing operations — that’s job number one,” Low added. He said that credible frameworks are necessary to guide corporate investments into removal solutions that meet integrity standards and future eligibility.
Beyond corporate buyers, panelists also highlighted the risks in scaling the market.
Nadiya Nair, strategy and development lead at ACT Commodities, said that a lack of harmonization continues to delay capital flows into climate mitigation efforts.
Bilal Hussain, chief executive officer of carbon credit insurer Artio, pointed out that technology risk remains the biggest barrier for insurers, particularly when novel solutions lack historical performance data. He underscored the need for pilot-stage coalitions in building confidence before technologies can be underwritten or adopted at scale by institutional finance.
Organized by the IETA, the Asia Climate Summit 2024 was held on July 8-10.
–Reporting by Lujia Wang, lwang@opisnet.com; Editing by Mei-Hwen Wong, mwong@opisnet.com