Singapore close to unveiling carbon credits whitelist: sources

THE SINGAPORE government is planning the imminent release of a list of acceptable carbon credits that companies may use to partially offset their taxable emissions, The Business Times has learnt.

The whitelist is expected to highlight eligible host countries, crediting programmes and methodologies. As previously announced, Singapore’s carbon tax will increase to S$25 per tonne in 2024 from S$5 currently. Companies will be able to use credits on the whitelist from 2024 to offset up to 5 per cent of their taxable emissions.

In response to BT’s queries, a spokesperson from the Ministry of Sustainability and the Environment (MSE) said it is “on track” to publish the list by the end of this year, with the introduction of the International Carbon Credits Framework.

The framework will then allow carbon-tax liable companies to offset up to 5 per cent of their taxable emissions from Jan 1, 2024, he confirmed.

Minister for Sustainability and the Environment Grace Fu previously said that the framework applies only to the companies that are directly emitting at least 25,000 tonnes of greenhouse gases annually, and are therefore subject to the carbon tax. It does not apply to the voluntary carbon markets and companies that do not have to pay the carbon tax.

Fu also said that the whitelist will “minimally reference” the Carbon Offsetting and Reduction Scheme for International Aviation (Corsia) standards, given that the carbon market is nascent and growing. The Corsia standards have been applied to international aviation since 2019, when all airlines were required to report their carbon emissions on an annual basis.

On Friday (Sep 22), the MSE spokesperson reiterated that international carbon credits eligible for carbon tax offset will need to be of high environmental integrity and compliant with Article 6 of the Paris Agreement. The Article sets out how countries can trade emission reductions and removals with one another through bilateral or multilateral agreements to avoid double counting.

To that end, Singapore has pursued collaborations on carbon credits through memoranda of understanding (MOUs) or letters of intent with 13 countries: Bhutan, Cambodia, Chile, Colombia, Dominican Republic, Ghana, Kenya, Mongolia, Morocco, Papua New Guinea, Peru, Sri Lanka and Vietnam.

Singapore’s whitelist will come amid heightened controversy about carbon credits, especially in the voluntary markets. The latest was a report by The Guardian newspaper asserting that a majority of the 50 most popular emission offset projects are “likely junk or worthless”.

It echoed findings presented in a January article in The Guardian on forest conservation carbon credits, which Fu in February said the government would take into account in finalising the whitelist’s criteria.

Information provider Quantum Commodity Intelligence (QC Intel) on Thursday, citing unnamed sources, reported that several countries are ready to announce whitelists of sectors that will be eligible for credit export. Its sources said Ghana, Morocco, Kenya, Senegal and Chile appear to be the most engaged with the process, with some announcements expected before or at the 28th United Nations Climate Change Conference, which begins Nov 30 in Dubai.

QC Intel also reported that Singapore is “in the final stages of finalising its guidance about which projects it will import under Article 6”.