In the world's first carbon offset sale under a new system created by the UN Climate Accord or Paris Agreement, Energy Absolute, a Thai green energy provider, has reached an agreement to sell carbon offset credits to Switzerland's KliK Foundation.

KliK Foundation, which represents fuel importers, said that in December 2023, it had completed the first purchase of 1,916 carbon offset credits from Energy Absolute’s Bangkok E-Bus Programme, under the bilateral climate agreement between Switzerland and Thailand, in accordance with Article 6 of the Paris Agreement. Energy Absolute is earning the offset credits by launching a fleet of up to 4,000 electric buses in Bangkok.

According to the S&P Global website, analysts expect this deal will kickstart more country-company level collaboration in emissions trading, as private sector activity on this type of transaction has been slow to take off because of technical and jurisdictional issues.

The Paris Agreement lets governments and companies offset some of their greenhouse gas emissions by paying for steps to cut climate pollutants elsewhere. Those offsets are packaged as credits, each equivalent to reducing one metric ton of carbon dioxide emissions.

"We are pioneers," Chatrapon Sripratum, an Energy Absolute Executive overseeing the project, told Reuters. "This market will really boom in the future."

However, not every aspect of the deal is clear because climate negotiators are still working out some of the finer details of the trading mechanism at their meetings, most recently at COP28 in Dubai. So, it is possible that the agreement may be adjusted at a later date depending upon changes in the rules.

"There's no clear rule saying how this needs to be done, and in that sense, being the first might be an advantage in the long run, but, at first, it's really hard work and also a lot of cost," KliK Managing Director Marco Berg said.

Photo courtesy of https://www.nationthailand.com/special-edition/ev/40025519