GenZero Launches Paper To Enhance Legal Clarity For Voluntary Carbon Credits In Singapore

GenZero Launches Paper To Enhance Legal Clarity For Voluntary Carbon Credits In Singapore - Carbon Herald

GenZero, a Temasek-owned investment platform company focused on accelerating decarbonization, has launched a legal paper jointly authored with leading law firm in Singapore, Allen & Gledhill LLP, calling for action on characterization of carbon credits. Titled “The Legal Character of Voluntary Carbon Credits: A Way Forward”, the paper examines the importance of clarifying the legal characterization of voluntary carbon credits (VCCs) and offers a possible one as intangible property in Singapore. It also calls for action by governments to articulate a position.

The paper shares views that VCCs may be characterized as “intangible property”. This is not only supportable by existing legal principles in Singapore, but is also beneficial as it provides market participants with a sound commercial basis to transact and manage risk, especially in the context of:

  • Buying and Selling VCCs: Which will enable market participants to confidently claim title to VCCs which they purchase.
  • VCCs as Collateral for a Loan: Which will provide certainty to financial institutions on how they can take VCCs as collateral that can be enforceable.
  • Trusts, Property, and Insolvency: Which will give clarity to the priority of claims over VCCs in the event of the owner becoming insolvent. The ability to create trusts over VCCs will also enable project development and create a more liquid carbon market.

Further, the paper highlights the pathfinder role that Singapore can play in articulating a position as there is a strong tendency for the ecosystem to converge around jurisdictions where there is a relatively high degree of clarity.

Relevant: Bayer, GenZero And Shell Partner On Reducing Methane Emissions In Rice Cultivation

Sim Ting, General Counsel at GenZero, said: “We are pleased to have partnered with Allen & Gledhill on this paper which is aimed at providing a view on the legal characterization of VCCs. Gaps within the voluntary carbon market limit the ability for market participants to fully leverage carbon markets and unlock its potential for carbon finance. We believe that legal clarity on VCCs will be welcomed by all in the carbon ecosystem, from the financial institutions and investors to the corporates and end-users. Together, we hope that this paper will help galvanize action and cement Singapore’s leadership as a carbon hub that is at the forefront of scaling carbon markets.”

Adrian Ang, Partner and Co-Head of ESG & Public Policy at Allen & Gledhill, said: “We are honoured to partner with GenZero on this paper, which will hopefully inform and start relevant discussions on key ESG topics such as how we can characterize VCCs. With ESG issues continuing to grow in prominence globally and governments looking to implement new regulations to ensure sustainable business practices, it is important that our Firm plays its part in supporting our clients through providing relevant input into vital conversations such as these. We hope to continue contributing to the development of Singapore as a key hub for ESG and will endeavour to continue working with like-minded clients such as GenZero towards this goal.”

Relevant: GenZero Launches With $3.6 Billion Investment From Temasek

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