Singapore’s National Environment Agency (NEA) has signed two memorandums of understanding (MOUs) with international carbon offset managers Gold Standard and Verra.
The agreements will enable Singapore-based companies to use eligible carbon credits to fulfil a portion of their compliance obligations under the country’s carbon tax regime. They are part of Singapore’s efforts to help operationalize Article 6 of the Paris Agreement on the trading of carbon credits.
As announced in Singapore’s Budget 2022, companies regulated under the Carbon Pricing Act will be allowed to use high-quality international carbon credits to offset up to 5% of their taxable emissions from 2024.
The MOUs will facilitate efforts by Singapore-based companies in exercising this option. Companies can acquire eligible high-quality carbon credits issued by Gold Standard and Verra, and surrender them to the Singapore government, subject to the carbon credits meeting the prescribed criteria.
Gold Standard and Verra operate two of the largest international offset programmes whose carbon credits and methodologies have been widely accepted by various carbon-offsetting schemes, including the Carbon Offsetting and Reduction Scheme for International Aviation (Corsia) developed by the International Civil Aviation Organization.
The two firms have instituted robust approaches and procedures to safeguard the environmental integrity of the carbon credits they issue, ensuring that carbon credits are real and verifiable and that projects make measurable contributions to sustainable development.
Commenting on the agreements, NEA's deputy CEO and director-general of environmental protection, Ananda Ram Bhaskar, says: “High-quality carbon credits will play an increasingly important role in reducing the cost of carbon mitigation compliance and helping companies meet their climate change goals. Singapore’s collaboration with Gold Standard and Verra/Verified Carbon Standard, two credible international offset programmes, will hopefully contribute to the mobilization of the supply of high-quality carbon credits internationally.”
Gold Standard CEO Margaret Kim adds: “Following COP26 we are entering a new era. Agreements like this will make it easier for companies and countries to meet their compliance obligations, enabling them to maximize their positive impact on climate security and broader sustainable development goals. We are delighted to partner with the NEA, which is leading the way in making it simpler for companies to reduce their carbon footprint.”