Singapore’s EDB and IETA Launch Singapore Carbon Market Alliance

Singapore’s Economic Development Board (EDB) and IETA, formerly known as the International Emissions Trading Association, have launched the Singapore Carbon Market Alliance (SCMA), which is aimed at helping local companies access Article 6 carbon credits, EDB said.

Unlike the international voluntary carbon market (VCM) credits, which are mainly traded in the private sector, Article 6 carbon credits are backed by governments through bilateral and multilateral trading agreements.

In Singapore, companies can use Article 6-aligned carbon credits to offset up to 5% of their liable emissions under the city-state’s carbon tax scheme. Additionally, Article 6 credits will be used to meet Singapore’s climate targets, known as nationally determined contributions under the UN framework.

As a city-state, Singapore’s annual emission volume was relatively small, at 53.7 million mtCO2e as of 2021. Its carbon intensity, defined as CO2 emissions per dollar of gross domestic product, ranked 136th among 155 countries in 2021, based on the latest available data from the National Climate Change Secretariat, according to a report from S&P Global.

Despite the limited domestic demand for carbon offsetting, establishing the SCMA is an important step toward nurturing an Article 6 market in Singapore. Currently, the Article 6 market is still nascent, with very limited credit supplies and trading activity globally.

The SCMA is a by-invitation-only alliance designed to connect international carbon project developers, carbon credit suppliers and Singapore-based companies committed to climate goals and interested in purchasing Article 6 carbon credits, according to the report.

“Through workshops and networking sessions, the SCMA will build members’ knowledge on enabling and accessing high-quality credits. It will also facilitate exchanges between industry and the government on Singapore’s requirements and initiatives in carbon credits, the report, quoting EDB, said.

Alliance Details

The SCMA has already gathered 39 members and notable among them include GenZero, the decarbonisation investment platform under Singapore’s state investment company Temasek; project developers like New Forests; exchanges such as Climate Impact X and ACX; rating agencies like BeZero; intermediaries including ACT, Pollination and South Pole; as well as potential carbon credit buyers in emission-intensive sectors such as Chevron, Shell, Vitol, Trafigura, Sembcrop and Changi Airport Group.

IETA will support the SCMA as a convener and call for its members — which include key carbon project developers and carbon credit buyers — to actively participate in the alliance and the Article 6 market.

Additionally, through the ICROA Accreditation Programme, IETA will provide the SCMA with best practice guidance for carbon credit sellers and project developers.

The SCMA supports Singapore’s efforts to become a carbon services and trading hub in Asia, EDB said, adding that the city-state has already accommodated more than 120 companies across the carbon management value chain.