Singapore developing classification system to boost quality of carbon credits

Singapore — Singapore is developing a classification system and framing guidelines to boost the quality and credibility of carbon credits, in line with its target to become a global carbon trading and services hub, Tan See Leng, the second minister for trade and industry, said May 11.

These actions will help strengthen the confidence of carbon market participants, at a time when the industry has become key to the long-term decarbonization plans of both governments and corporates, but also suffers from the lack of transparency and reliability.

Singapore's robust legislative, commodity trading and financial services foundation has put it in a very good position to grow an internationally trusted carbon services and trading ecosystem in Asia, Tan said in his reply to parliamentary questions..

"The main risk for buyers in voluntary carbon credit market has been on the integrity and quality of such carbon credits," he said, adding that this can be mitigated with measures like firm guidelines for carbon credit quality and associated technologies.

Singapore is working to establish a marketplace and exchange for carbon credit transactions. Alongside carbon trading, the ecosystem is expected to include a wide range of services like project development, financing, measurement, reporting and verification services.

The present-day carbon trading ecosystem in Asia primarily comprises the trading of voluntary carbon credits to meet voluntary corporate-level emission targets.

Singapore unveiled its Green Plan 2030 earlier in the year that is expected to strengthen the city state's commitments under the UN's 2030 Sustainable Development Agenda and Paris Agreement.

One of the pillars of the Green Plan is 'Energy Reset' -- to use cleaner energy and higher energy efficiency to lower the carbon footprint, including the International Civil Aviation Organization's aspirational goals of 2% annual fuel efficiency improvement from now to 2050 and carbon neutral growth from 2020 as well as the International Maritime Organizations' target to reduce greenhouse gas emissions from international shipping by at least 50% by 2050 compared with 2008 levels.

Singapore's 2030 targets also include increasing solar energy, building 200 MW of energy storage systems beyond 2025, developing technology that meets heat-rate/emissions standards and reduces carbon emissions, as well as diversified electricity supply.