The 2015 Paris Agreement allows for governments and companies to 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 (CO2) emissions.
Some environmentalists, however, criticize carbon offsets, saying they allow pollution to continue when the focus should be on eradicating it.
Switzerland's KliK Foundation, which represents fuel importers, said on Monday that it had completed the first purchase of 1,916 carbon credits from Thailand's Energy Absolute in December.
"We are pioneers," Chatrapon Sripratum, an Energy Absolute executive overseeing the project, told Reuters. "This market will really boom in the future."
Energy Absolute is generating the credits by launching a fleet of up to 4,000 electric buses in Bangkok, rather than using petrol-fueled vehicles.
Sripratum said the sales price was more than $30 per credit, declining to give the exact value of the deal.
Climate negotiators took years to agree the rules for offsets, with many of the details still being worked out at annual U.N. climate negotiations, most recently at COP28 in Dubai.
This means that Energy Absolute and KliK - and regulators in both countries who must authorise the deal under the Paris Agreement - can influence a nascent market if the final U.N. rules follow their lead. But it also poses the risk that they will need to retroactively revise their transaction.
"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.
The Swiss government forced KliK's hand by obligating fuel importers to offset a steadily rising percentage of their emissions, either domestically or internationally through Paris Agreement compliant credits.
KliK has agreed to buy offsets for up to 1.5 million metric tons of carbon dioxide emissions through 2030 from Energy Absolute, representing just a portion of the 20 million credits it foresees needing to buy by decade's end, Berg said.
That compares to the roughly 40 million metric tons of CO2 that Switzerland expects to offset abroad through 2030 to meet its climate targets, the Swiss Federal Office for the Environment told Reuters.
