The Singapore Economic Development Board (EDB) and IETA have launched the Singapore Carbon Market Alliance (SCMA), the first platform in Singapore aimed at helping companies obtain access to high-quality, Article 6-aligned carbon credits.
SCMA is a by-invitation-only alliance that will connect developers and suppliers of carbon credits with Singapore-based corporates that are keen to purchase such carbon credits.
Article 6 of the Paris Agreement sets out how countries can pursue voluntary cooperation to reach their climate targets. SCMA says these credits can help companies meet their corporate climate goals. They can also be used towards Singapore’s Nationally Determined Contributions (NDCs).
The initiative was launched on July 31 by Low Yen Ling, Senior Minister of State, Ministry of Trade and Industry, at the Bloomberg Sustainable Business Summit.
SCMA’s more than 50 member companies include chemicals company Evonik Methionine SEA, tech giant Google Asia Pacific and non-profit The Nature Conservancy. Members also include Singaporean firms Sembcorp Industries, Changi Airport Group and GenZero, Temasek’s decarbonisation-focused investment subsidiary.
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SCMA will hold workshops and networking sessions for its members to better understand the carbon credit ecosystem. It will also facilitate exchanges between the industry and the Singapore government on national requirements and initiatives, say EDB and IETA, formerly known as the International Emissions Trading Association.
The launch of SMCA comes amid growing demand for high-quality carbon credits here, say the two parties. From this year, companies in Singapore will be allowed to use international carbon credits to offset up to 5% of their taxable emissions.
SCMA is the first platform in Singapore focused on catalysing Article 6 credits, says Jacqueline Poh, managing director at EDB. The alliance is not a marketplace, she adds. “When we set up those marketplaces in a public-private partnership a few years ago, we realised that they are very far downstream, and there’s no point being very far downstream if there’s nothing providing the solutions that are upstream.”
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DBS Bank, Singapore Exchange S68 (SGX), Standard Chartered and Temasek joined hands to launch Climate Impact X (CIX) in December 2021. CIX launched its voluntary carbon exchange in June 2023.
In December 2022, the Singapore government launched the carbon credits metadata platform Climate Action Data Trust (CAD Trust) together with IETA and the World Bank.
In April, EDB supported the launch of the Asia Centre of Carbon Excellence (ACCE) in Singapore by Swiss carbon finance consultancy South Pole and GenZero. GenZero is a minority shareholder in South Pole.
Poh hopes SCMA will serve as a convening platform for carbon credit buyers and sellers, solving “upstream” obstacles before firms decide to transact in the carbon markets. “This is where we need to be at this point in time,” she adds. “We’re facilitating a space and platform to foster knowledge and meaningful connections between the different stakeholders here.”
According to Poh, EDB will announce more initiatives around the carbon markets in the coming months, with Climate Week NYC 2024 in New York this September and COP29 in Azerbaijan this November.
IETA says its role as a convenor for the international business sector in carbon markets will encourage positive and active participation from key carbon credit project developers and buyers.
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Through the International Carbon Reduction and Offset Alliance (ICROA) Accreditation Programme, IETA will also provide the SCMA with best practice guidance for sellers and project developers to participate in the scheme.
IETA President and CEO Dirk Forrister says: “IETA fully supports Singapore’s efforts to develop a regional market for the trade in high-quality carbon credits. Achieving the Paris Agreement goals requires international collaboration and Singapore’s position as a major global hub makes it an excellent candidate to drive forward the development of a truly international carbon market.”
Singapore as a carbon hub
Singapore is home to more than 120 firms across the carbon management value chain, says Low in her opening remarks. “Many of these firms are, in fact, global organisations that play a key role in driving environmental impact and supporting companies in achieving climate goals.”
Recent controversies in the carbon markets have “unfortunately” heightened concern and scrutiny on the use of credits, adds Low. “But having said that, I feel rather than being discouraged, we should see it as glass half-full and not glass half-empty. Do not wait for things to be cleared up. Because that might take some time, I think we all need to now roll up our sleeves and get involved.”
Singapore is committed to contributing to the growth of the carbon markets “by convening constructive actors and trusted expertise”, she adds. “This includes carbon services and trading firms specialising in low-carbon advisory, project development, financing, as well as verification.”
Singapore is pursuing Article 6.2 partnerships with more than 20 countries, says Low. Article 6.2 allows countries to exchange mitigation outcomes bilaterally and to report their trade, and use them towards their NDCs. This means Singapore can one day exchange carbon credits and even renewable power directly with other countries through bilateral agreements.
Singapore has signed implementation agreements with Papua New Guinea and Ghana to cooperate on carbon credits. The republic has also signed memoranda of understanding with 14 countries across Latin America, Asia and Africa.
Photos: EDB
