EU–ASEAN Joint Side Event on Carbon Pricing and Markets
On the sidelines of the first ASEAN-EU Ministerial Dialogue on Environment and Climate Change, on 4 September 2025, the EU and ASEAN held a high-level side event to strengthen cooperation on carbon pricing and market mechanisms as effective tools for climate action. Carbon pricing and market mechanisms stand at the forefront of regional climate cooperation, exemplified by continued progress on the ASEAN Common Carbon Framework. The meeting gathered high-level representatives from ASEAN Member States, the ASEAN Secretariat, the European Union and key partner organisations involved in climate and environmental cooperation. It was supported by the ASEAN EU–German Climate Action Programme.
The European Commissioner for Climate, Net-Zero and Clean Growth, Wopke Hoekstra, welcomed ASEAN countries’ significant progress in developing domestic carbon pricing systems. He emphasized that well-designed carbon pricing creates incentives to cut emissions, drive innovation, attract investments in clean technologies, and generate revenues to support a just transition. Commissioner Hoekstra underlined the EU’s experience with its Emissions Trading System, which has reduced emissions by approximately 50% since 2005 while generating significant revenues. He stressed that the EU stands ready to share its expertise with key interested partners in the region.
Minister Fu, Singapore’s Minister for Sustainability and the Environment emphasised the benefits of ASEAN-wide cooperation on carbon pricing and markets, noting that ongoing initiatives like the ASEAN Common Carbon Framework can promote the convergence of policies and methodologies, leveraging capacity-building efforts, and exchanging best practices across South-East Asia. By facilitating regular exchanges among member states, ASEAN countries can collectively enhance the effectiveness of their carbon pricing schemes, delivering environmental benefits alongside fair competition and ensuring equitable economic transitions for the region, thereby promoting economic equity among ASEAN members. Minister Fu also called for even deeper future ASEAN-level activities to further institutionalize and scale these benefits.
Interventions from Malaysia’s representative and Indonesia’s Deputy Minister for Climate Change and Carbon Governance, Ary Sudijanto, offered insights from their national contexts. They demonstrated how bilateral cooperation with the EU can complement regional efforts in supporting the design and implementation of robust domestic carbon pricing systems.
The event concluded in a renewed commitment by both ASEAN and EU partners to strengthen cooperation on carbon pricing and markets, underlining the importance of promoting effective carbon pricing policies on the international stage, including at COP30. Southeast Asian partners signaled strong interest in deepening cooperation with the EU both regionally and nationally, and the EU will continue to engage with partners to provide technical expertise and support.
Commissioner Hoekstra said: Carbon pricing is key to achieving our climate goals. It creates clear incentives to cut emissions, drive innovation and attract investment in clean technologies, which in turn promote competitiveness. To support other countries in their carbon pricing efforts, we have established a dedicated Task Force focused on providing technical assistance and fostering collaboration.
