Singapore to procure 2.175 mil mtCO2e of nature-based carbon credits under Article 6

Singapore will procure 2.17 million mtCO2e of nature-based carbon credits from four projects in Peru, Ghana and Paraguay, marking its first major contract for international mitigation outcomes under Article 6.2 of the Paris Agreement, the government said Sept. 16.

The credits will be sourced from two REDD+ projects in Peru, a grassland restoration project in Paraguay, and a reforestation initiative in Ghana. The contract is valued at around $55.6 million, and deliveries are scheduled between 2026 and 2030, according to a joint statement from the National Climate Change Secretariat and the Ministry of Trade and Industry.

The credits will help meet Singapore's 2030 Nationally Determined Contribution, which includes a target to reduce emissions to around 60 million mtCO2e after peaking earlier in the decade.

Platts assessed its Nature-Based Avoidance, Southeast Asia current year price at $9.15/mtCO2e on Sept. 15. Similarly, the Platts Nature-Based Avoidance, South America current year price was last assessed at $6.60/mtCO2e, and the Platts Natural Carbon Capture current year price was at $13.46/mtCO2e.

Bilateral pathway

The procurement follows a request-for-proposal (RFP) launched in September 2024 and reflects Singapore's approach to accessing carbon credits through bilateral Article 6.2 agreements rather than relying solely on the voluntary carbon market. The projects selected must be authorised by the host countries and meet Singapore's environmental integrity standards, including additionality, permanence, and social co-benefits, the statement said.

All four projects are registered under Verra, using VM0047 (Afforestation/Reforestation), VM0048 (REDD+), and VM0042 (Improved Agricultural Land Management) methodologies, which are eligible under Singapore's Article 6 framework. The credits will be correspondingly adjusted under the host countries' national inventories to prevent double-counting.

Singapore has bilateral implementation agreements with nine countries currently—Bhutan, Chile, Ghana, Papua New Guinea, Peru, Paraguay, Rwanda, Thailand, and Vietnam. The agreements require that 5% of the share of proceeds from the credits be channeled into adaptation finance for the host countries, in line with Article 6.2 guidance.

Market implications

The deal is among the first government-level transactions for carbon credits under Article 6.2 to move beyond pilot status and toward contracted delivery.

In recent months, market participants have voiced growing optimism about the new methodologies within the nature-based solutions category, and substantial interest from buyers for these credits. Nature-based solutions, in particular, are increasingly viewed by multiple jurisdictions as a national resource, offering significant potential in the emerging compliance-grade market for Article 6 credits.

The selected projects include:

• Kowen Antami REDD+ and Together for Forests REDD+ in Peru, focusing on forest protection and sustainable land management;
• Boomitra Grassland Restoration Project in Paraguay, which aims to improve soil organic carbon through rotational grazing;
• Kwahu Landscape Restoration Project in Ghana, which involves reforestation of degraded lands and agroforestry on former cocoa farms.

Carbon tax offsets and future RFPs

The credits may also support Singapore's domestic carbon pricing regime.

Since 2024, taxable facilities have been allowed to offset up to 5% of their emissions using eligible international carbon credits, provided the credits meet quality criteria and come with corresponding adjustments.

Singapore plans to issue a second RFP for Article 6-aligned credits later this year.

While market liquidity for Article 6.2 credits remains limited, government-backed transactions are helping to define integrity benchmarks for bilateral carbon trades as more countries finalize their eligibility lists and implementation agreements.