Cop: Singapore partners Fiji, Rwanda on carbon credits

Singapore has signed agreements with Fiji and Rwanda on the sidelines of the UN Cop 28 climate summit, to collaborate on creating carbon credit frameworks for the transfer of credits.

Singapore has signed similar but separate agreements with Fiji and Rwanda to co-operate on creating legally binding implementation agreements that set out a bilateral framework for the international transfer of correspondingly adjusted carbon credits. The agreements include the criteria and processes for trading carbon credits under Article 6 of the Paris agreement.

Once the implementation agreements are completed, companies in Singapore that are liable to be subjected to carbon tax can purchase carbon credit projects to offset up to 5pc of their taxable emissions.

A corresponding adjustment refers to the transfer of emissions reductions across countries' greenhouse gas inventories, in a manner that prevents the double-counting of emission reductions and removals towards buyer and host countries.

Singapore plans to raise its carbon tax to S$25/t ($19/t) in 2024-25 and then S$45/t in 2026-27 from the current rate of S$5/t. This will reach about $60/t by 2030, "making it one of the highest in Asia," said senior minister Teo Chee Hean at the Cop 28 summit.

The country in October set out the eligibility criteria for carbon credits to be used under its International Carbon Credit (ICC) framework. These include "realistic, defensible and conservative" estimates of emissions reductions compared with a plausible baseline scenario, and permanence, whereby the carbon credits must be derived from emissions reductions that are not reversible.

By Prethika Nair