Carbon credit search hots up with firms eyeing opportunities in Ghana

Some developers keen to sell credits to S'pore firms banking on cookstove and EV projects

- Cheryl Tan

Singapore's search for carbon credits is hotting up, with companies here eyeing opportunities in Ghana on the back of the hike in carbon taxes that took effect in 2024.

The African nation is one of only two countries where carbon taxliable companies in Singapore can currently source for carbon credits to reduce the amount of tax they have to pay. The other country is Papua New Guinea.

In July, the Ministry of Trade and Industry (MTI) led the first carbon credits business mission to Ghana with a delegation of 22 Singaporebased companies. They range from project developers to traders and financiers, said the ministry.

More than 30 Ghanaian project developers, which have existing carbon credit project proposals in Ghana, participated in a businessmatching session with the Singapore companies, MTI said in a statement on Aug 8.

In Ghana, projects that could supply carbon credits to the global market are in sectors such as energy, transport and forestry.

But The Straits Times understands that some project developers looking to sell credits to Singapore-based firms are banking on cookstove projects that can replace open-fire stoves with cleanerburning ones, and potentially the green mobility solution sector, such as electric vehicles (EVs).

For now, the bulk of reforestation projects in Ghana appear to be ineligible as a supplier of carbon credits to Singapore firms, amid an ongoing review of whether current methodologies are robust enough to ensure the quality of forestbased credits.

One carbon credit represents one tonne of planet-warming emissions that is either prevented from being released, such as when an open-fire cookstove is replaced with an electric one, or removed from the atmosphere, such as through a reforestation project.

By purchasing carbon credits to offset their own emissions, large emitters in Singapore can "shrink" their carbon footprint and reduce the amount of carbon tax they have to pay.