Singapore allows 2025 carbon quotas to carry forward amidst supply crunch

Limited eligible credits keep firms within 5% offset cap.

Singapore will allow carbon tax-liable companies to carry forward unused International Carbon Credit (ICC) offset quotas from emissions year 2025 to 2026, as limited supply of eligible credits constrains access to the market.

The National Environment Agency and Ministry of Sustainability and the Environment said in a joint press release that companies can continue using eligible ICC to offset up to 5% of taxable emissions under Singapore’s ICC framework.

The government said the unused 2025 offset quota can be rolled over for one year into emissions year 2026.

A credit conversion factor will apply as Singapore’s carbon tax rises to $45 per tonne in 2026 from $25 per tonne in 2025.

Under the formula, unused 2025 offsets carried into 2026 will be multiplied by 25/45 and rounded down to the nearest whole number, according to the annex note.

The government said offsets rolled over from emissions year 2024 to 2025 will expire and cannot be carried forward again.

The rollover applies as a transitional measure, whilst supply builds in international carbon markets under Article 6 of the Paris Agreement.

The government said carbon credit projects take several years to generate credits, and recent developments linked to carbon credit integrity standards and evolving market rules have delayed supply.

Singapore has signed 11 implementation agreements and launched application calls for carbon credit projects in Bhutan, Ghana, Peru, Rwanda, and Thailand since late 2025, the joint press release said.

Singapore said it will continue working with implementation agreement partners to expand the supply of eligible ICC.