World Bank and Singapore-backed CAD Trust integrates Bhutan as its first national registry

The world’s first “carbon-neutral country” stands as a significant “carbon bank”, says CAD Trust.

Edit: An earlier version of this story referred to Bhutan as “the world’s first carbon-negative country”. CAD Trust’s public relations agency have requested a change to their announcement, now refering to Bhutan as “the world’s first carbon-neutral country”.

Bhutan has been announced as the first national registry to fully integrate with the Climate Action Data Trust (CAD Trust) Metadata Layer.

Unveiled at COP28 on Dec 4, the move positions Bhutan as a regional leader in climate action, aligning with the goals of Article 6 of the Paris Agreement.

CAD Trust is a decentralised, blockchain-based platform launched by the World Bank, the International Emissions Trading Association (IETA) and the Singapore government in December 2022.

As an independent entity headquartered here, CAD Trust links, aggregates and harmonises all carbon credit data from project registries to facilitate transparent reporting. It is designed to foster transparent accounting in carbon markets, in line with Article 6 of the Paris Agreement, which emphasises international cooperation in climate goals through market-based mechanisms.

Bhutan’s forests cover more than 72% of its territory. The world’s first “carbon-neutral country” stands as a significant “carbon bank”, says CAD Trust.

“By integrating with CAD Trust, Bhutan guarantees the efficiency and transparency of its climate mitigation efforts, in line with Article 6 implementation. The connection uses cutting-edge digital infrastructure to uphold the integrity of carbon credit data and prevent double-counting — a key tenet of Article 6.”

Double-counting refers to a situation where two parties claim the same carbon removal or emission reduction, even though no additional carbon benefit is produced.

Bhutan’s integration was directed by its Ministry of Energy and Natural Resources (MOENR). Technical support was provided by experts from Druk Holding and Investments, the commercial arm of the Royal Government of Bhutan.

Karma Tshering, Secretary of MOENR, says: “We are proud to be the world’s first carbon-neutral country. By entering the CAD Trust, we are leading by example in protecting the global ecosystem, buttressing Bhutan’s unique status. The Ministry of Energy and Natural Resources has taken the lead for the development of the carbon markets in Bhutan and has selected Druk Holding and Investments to pave the way for Bhutan to join the CAD Trust. We look forward to working closely with the World Bank and other global stakeholders on such a worthy project.”

Druk Holding and Investments was established in 2007 to hold and manage the existing and future investments of the Royal Government of Bhutan. As the largest and only government-owned holding company in Bhutan, it holds shares of 21 different domestic companies operating in the manufacturing, energy, natural resources, financial, communication, aviation, trading and real estate sectors.

Yuvaraj Dinesh Babu, executive director, CAD Trust, says Bhutan has taken a leadership position by integrating its national registry with CAD Trust. “By doing this, Bhutan is demonstrating its ambition to contribution significantly to global climate change mitigation efforts, and has applied maximum transparency and efficiency to the way its domestic market operates and how carbon market participants interact with it. We expect many others to follow its example in the coming months as Article 6 markets become ingrained in the fabric of global emission reduction and removal priorities.”

CAD Trust says Bhutan’s move marks the beginning of its expanding network. It aims to connect with other national and independent carbon market standards “over the coming weeks and months”.

In June, CAD Trust launched its 20-member user forum, which acts as a “market sounding board” for technical, policy and business questions.

Among the 20 chosen members are Saurabh Joshi, director of strategic projects at Climate Impact X; and Anshari Rahman, director of policy and analytics at Temasek subsidiary GenZero.

These carbon market stakeholders provide input to the CAD Trust Council. The Council, in turn, advises the board of directors.

As at its launch in December 2022, the Council consisted of national representatives from Bhutan, Chile, Japan, Senegal, Singapore and the UK, along with registry representatives Verra, Gold Standard, American Carbon Registry and Global Carbon Council, among others.

Follow The Edge Singapore’s coverage of COP28 here.

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