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Colombia and Peru, two of Latin America's largest carbon market players, are both entering a pivotal political transition, one that raises fresh questions about the future of Article 6 engagement, domestic carbon pricing, and indigenous rights governance. In Colombia, president-elect de la Espriella brings a pro-market agenda that could unlock the country's significant but largely dormant Article 6 potential, while in Peru, incoming president Fujimori inherits a more mature bilateral framework whose continuity remains to be confirmed.
These transitions come alongside other Article 6 developments this month: the EU Parliament's ENVI committee voted to nearly triple the scope of CBAM to 457 product codes while removing Article 6 credits as eligible deductions, a significant development for carbon-intensive exporters worldwide. On the bilateral front, Singapore added Indonesia to its growing network of carbon credit partnerships, targeting one of the world's largest NBS supply pools, while Guyana and Malawi submitted NDCs with explicit Article 6 commitments, bringing the global NDC 3.0 total to 144 parties.
New Governments in Colombia and Peru: What It Means for the Carbon Market
Two of Latin America's most important carbon market players are undergoing leadership transitions. In Colombia, president-elect Abelardo de la Espriella (far right) -elected with nearly 50% of the vote- takes office on August 7, 2026, replacing Gustavo Petro (left). In Peru, Keiko Fujimori, also elected with just over 50% of the vote, will be sworn in on July 28, 2026, succeeding the current left-wing president, José María Balcázar. Both transitions open questions about the future of these countries in international carbon markets.
In Colombia, the shift has been generally well received among carbon market stakeholders. Unlike Petro's more reluctant stance toward voluntary carbon markets, de la Espriella's environmental agenda explicitly supports Colombia's participation in the VCM, Article 6 and CORSIA, as well as CBAM preparedness. He has also signalled his intent to restore the carbon tax non-causation offset threshold back to 100% - up from the 50% cap introduced by Petro. However, his environmental programme makes no mention of an ETS (locally known as Programa Nacional de Cupos Transables de Emisión or PNCTE) that Petro pushed but never fully operationalised. He also plans to reincentivise oil production - a sign that contradicts robust climate ambitions. In Colombia however, unlike other governments in the region that have leaned to the right, such as Milei in Argentina or Trump in the United States, the president-elect does not have an anti-climate agenda, but rather sees carbon markets as engines of the economy, similar to Kast in Chile.
In Peru, no equivalent technical document articulates Fujimori's carbon market agenda. However, the institutional foundation her government inherits is clearer. Peru's NDC 3.0 explicitly positions Article 6 as a key financing tool, committing to the use of at least 9 million tCO₂e of ITMOs by 2035. Peru has active bilateral agreements with Switzerland and Singapore, and the Tuki Wasi Programme is expected to transfer over 700,000 ITMOs to Switzerland through 2030. Colombia, by contrast, has only one MOU with Singapore signed in 2022 that has not progressed since.
Why this matters
Both countries are relevant players in the carbon market. Colombian projects registered retirements over 346 million credits between 2021 and 2025 -among the highest volumes globally- the vast majority from REDD+ forestry projects, with nearly 90 million cancelled directly toward the carbon tax non-causation mechanism (Figures 1 and 2). According to GGGI's modelling, Colombia could supply over 100 million ITMOs per year under Article 6 -a scale that would make it a key supplier for both CORSIA and bilateral agreements. However, some design questions will determine whether that potential translates into durable market development. Reinstating 100% offsetting under the carbon tax runs counter to international best practices, which typically caps offset use at 5-20% to ensure real internal abatement. Additionally, it remains to be seen how the new government navigates Ruling T-248/2024 and Decree 488/2025 - which affirmed indigenous communities' right of "cultural objection" over REDD+ projects on their lands.
Retirements from Colombian projects by Sector in the last 5 Years. Forestry and Land Use in green. Source: AlliedOffsets.
Credits cancelled towards Colombia's Carbon Tax by Registry. Source: AlliedOffsets.
Peru, meanwhile, is positioning itself as a leading VCM and Article 6 host country. AlliedOffsets projects robust credit issuance growth from existing and pipeline projects over the next 15 years (Figure 3), underpinned by 32 approved methodologies in its RENAMI registry across Verra, Gold Standard, Cercarbono, and ART-TREES. The near-term risk is inertia: Peru has no domestic compliance market, and Fujimori's hostility to new taxes and economic regulation makes domestic carbon pricing advances unlikely, meaning the country's carbon market development will remain supply-driven and dependent on international buyer demand through bilateral channels.
Forecasted issuance of credits from existing, future and pipeline projects in Peru, based on current assumptions of demand and supply. Source: AlliedOffsets.
Taken together, both transitions reflect a broader regional pattern: carbon markets in Latin America are increasingly framed as economic development tools rather than climate instruments, a framing that can unlock political space but also makes long-term coherence harder to sustain. Both governments will operate in contexts of deep political polarization, and carbon policy will inevitably be evaluated through a fiscal and investment lens.
Related Developments:
- Singapore Airlines retire 100,000 credits towards their CORSIA Phase 1 commitments, through Climate Impact X
On the 3rd of July, Singapore Airlines brought credit retirements under CORSIA Phase 1 to 250,000 units, with retirements of vintage 2024 credits from project VCS4151. Source: Quantum.
- Guyana and Malawi Submit NDCs with Explicit Carbon Market Commitments
Guyana and Malawi have both submitted their NDC 3.0s, joining Algeria, Cameroon, the Dominican Republic, and Timor-Leste in a recent wave of submissions that brings the global total to 144 out of 197 parties - excluding the United States, which has withdrawn from the Paris Agreement. Both new NDCs plan to participate in international carbon markets as suppliers to CORSIA and Article 6.
- EU Lawmakers Vote to Expand List of Products Under CBAM Carbon Import Tax
The European Parliament's ENVI committee has voted to extend the Carbon Border Adjustment Mechanism to 457 products while strengthening anti-circumvention measures. The committee deleted the Article 27a temporary suspension mechanism and removed the reference to Article 6 carbon credits as eligible CBAM deductions. The full Parliament vote is scheduled for September, after which trilogue negotiations with the Council begin. Source: Carbon Pulse - Singapore and Indonesia sign MoU on carbon credits collaboration under Article 6
The two countries have signed a Memorandum of Understanding on carbon credits collaboration, committing to identify high-integrity projects and work toward a legally binding Implementation Agreement covering forest protection, mangrove restoration and clean technology deployment. As two of ASEAN's largest economies, formalizing this relationship could unlock a new supply corridor for Singapore's framework.