Singapore Negotiates Carbon Credits Deals With Several Countries At COP28

Singapore Negotiates Carbon Credits Deals With Several Countries At COP28 - Carbon Herald
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Singapore is close to finalizing carbon credits agreements with Bhutan and Paraguay, after signing memoranda of understanding (MOUs) with Rwanda and Fiji over the weekend, local daily The Straits Times reported.

The initiative would allow companies in Singapore to purchase carbon credits from projects in Bhutan and Paraguay, offsetting part of their carbon tax.

If the deal with Bhutan materializes, it will mark Singapore’s first agreement with a carbon-negative country, given that the Buddhist kingdom absorbs more carbon dioxide (CO2) than it produces due to its extensive forest coverage.

During the COP28 climate summit in Dubai, Keith Tan, Deputy Secretary at Singapore’s Ministry of Trade and Industry (MTI), met with Dasho Karma Tshering, Bhutan’s Secretary of the Ministry of Energy and Natural Resources, reaffirming both nations’ dedication to advancing global climate action.

Separately, Singapore and Paraguay are set to sign an agreement in early 2024, marking Paraguay’s first such agreement and Singapore’s first with a Latin American country.

Following discussions at COP28, Singapore’s Senior Minister, Teo Chee Hean, and Paraguay’s President, Santiago Peña, aim to conclude negotiations on the implementation agreement, facilitating bilateral carbon credit trade between the two countries.

Relevant: Singapore Releases New Eligibility Criteria For International Carbon Credits

As of January 2024, Singapore will increase its carbon tax from US$3.73 (S$5) to US$18.64 (S$25) per ton of CO2 equivalent (tCO2e).

Once the agreement with Paraguay is in place, Singaporean companies can purchase carbon credits from Paraguayan projects, covering up to 5% of their carbon tax obligations.

In a move to diversify its carbon credits portfolio, Singapore has signed at least a dozen MOUs with countries such as Chile, Colombia, and Mongolia, the most recent ones being with Rwanda and Fiji, concluded over the weekend at COP28.

The MOUs pave the way for potential implementation agreements, contingent upon the readiness of each country to initiate carbon trading with Singapore, The Straits Times explained.

Read more: Singapore And McKinsey Say Carbon Credits Can Phase Out Coal Power In Asia

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