Town-state has already inked definitive cooperation offers with two nations – Papua New Guinea and Ghana – beneath Article 6, a piece within the Paris Settlement which lays out the principles for nations to satisfy their nationwide local weather targets by buying and selling carbon credit. It has additionally signed Memorandums of Understanding with 14 nations and is in in talks with over 20 nations to signal extra of such agreements.
However to this point, the host nations have but to ship any eligible credit.
“We’ve signed these agreements. However as but, there are not any credit. So we have to work collectively on this,” mentioned Jacqueline Poh, managing director of the Financial Improvement Board (EDB), a authorities physique beneath the nation’s commerce and business ministry, on the launch of the Singapore Carbon Market Alliance (SCMA) on Wednesday.
“The SCMA goals to function the platform for service suppliers, patrons and authorities companies to attach, share and collaborate. It’s the first platform in Singapore targeted on catalysing Article 6 credit,” mentioned Poh.
Final month, Singapore despatched a delegation to Ghana to generate a pipeline of carbon tasks between the 2 nations. Extra of such “carbon credit score mission journeys” might be anticipated sooner or later, she mentioned.
SCMA can even maintain discussions round “promising lessons of credit in Southeast Asia” like blue carbon and transition credit. The latter refers to a novel class of carbon credit to speed up the phase-out of coal, which the Financial Authority of Singapore (MAS) launched a separate world coalition for final 12 months, alongside two pilot tasks within the Philippines.
Poh clarified that “the alliance just isn’t a market,” including that there is no such thing as a level being so very far downstream within the carbon market and solely reaching finish patrons, when there is no such thing as a one offering upstream options on the undertaking growth aspect.
IETA, previously often called the Worldwide Emissions Buying and selling Affiliation, will present steering for sellers and undertaking builders in SCMA to get their carbon credit endorsed by the Worldwide Carbon Discount and Offset Alliance (ICROA) accreditation programme which it administers.
Over 50 members have joined the physique, together with oil and gasoline main Shell and the world’s two largest oil merchants Vitol and Trafigura.
From 2024, giant emitters in Singapore can be allowed to offset as much as 5 per cent of their carbon tax obligations, which was raised to S$25 (US$19) per tonne this 12 months. However Reuters reported final month that the federal government has provided refiners and petrochemical corporations as much as 76 per cent carbon tax rebates from 2024 to 2025.
It stays unclear what different sectors can be receiving rebates and the way these allowances would possibly have an effect on demand for offsets by carbon tax-liable corporations.
Tie-ups with regional carbon market associations
Earlier this month, Malaysia additionally fashioned a brand new carbon market affiliation, which incorporates state-owned oil firm Petronas and nationwide bourse Bursa Trade, to help its carbon market growth.
The Malaysia Carbon Market Affiliation has advised Eco-Enterprise that the nation is in talks with its Thai and Indonesian counterparts to arrange an Asean affiliation for carbon markets, forward of the nation assuming chairmanship of the intergovernmental group in 2025.
“I haven’t examined the potential of whether or not an Asean affiliation can be useful, or whether or not there’s sufficient overlap with the Singapore programme… however it’s one thing that we are able to take a look at extra strategically,” mentioned Dirk Forrister, president and chief government of IETA.
“The precedence on the outset is actually stimulating that exercise. If there’s success with the primary 20 companion nations, then there’s an enormous world on the market of potential companions for attending to internet zero.”
When requested about Malaysia’s latest proposal for an Asean customary for carbon tasks, Forrister advised Eco-Enterprise that whereas there’s probably a job for regional requirements, the “use of acquainted requirements might speed up funding, versus creating a brand new one that folks have to evolve to.”
“My present view is that now we have top quality requirements which are all being upgraded proper now, which are utilized globally. There is Verified Carbon Commonplace, Gold Commonplace, American Carbon Registry and International Carbon Council. These are all authorised to be used within the worldwide aviation programme CORSIA,” he mentioned.
“However on the similar time, going again to Colombia, there’s an area customary that some individuals use on forestry. But when they’ve worldwide aspirations, they have a tendency to go to Verra or Gold Commonplace, as a result of that approach your credit score may be good each domestically and internationally. That worldwide fungibility, particularly for gamers in Singapore, can be a excessive premium product.”
