AZEC International Conference to Develop Carbon Market (AZEC-DCM)

The Asia Zero Emission Community is a regional platform for advancing carbon across 11 partner countries: Australia, Brunei Darussalam, Cambodia, Indonesia, Japan, Lao PDR, Malaysia, the Philippines, Singapore, Thailand, and Viet Nam. Guided by AZEC's three core principles — decarbonisation, economic growth, and energy security — the initiative seeks to realise net-zero through multiple pathways by developing decarbonisation markets where business efforts toward emissions reduction are properly valued.

To support this goal, the AZEC International Conference to Develop Carbon Markets (AZEC-DCM) was launched as a policy coordination mechanism under the Action Plan for the Next Ten Years, endorsed at the 2nd AZEC Summit in October 2024. Building on prior discussions at the AZEC International Conference on the Joint Crediting Mechanism, the AZEC DCM dialogue focuses on:

• Visualising greenhouse gas (GHG) emissions across supply chains, and
• Developing high-integrity carbon markets.

The AZEC-DCM has convened twice: in May 2025 to discuss indicators and methodologies and in August 2025 to address carbon pricing and market integrity.

AZEC partner countries are deeply connected through historical economic cooperation and integrated supply chains. Expanding decarbonisation markets must therefore reinforce — rather than disrupt — these supply chains and enhance the competitiveness of regional industries.

At the same time, countries must remain responsive to global trends, including carbon border adjustment mechanisms (CBAMs) and growing demands for disclosures by financial institutions and corporations.

This report summarises the outcomes of the first two AZEC-DCM dialogues, outlines the current status of policy coordination, and identifies next steps to be presented at the 3rd AZEC Summit. It reaffirms countries' shared commitment to utilise the AZEC-DCM as a platform for continued collaboration.