Carbon credit global watchdog sets up first physical office here

It will raise standards of novel type of credits from retiring young coal-fired plants in region

- Shabana Begum Correspondent

A global body that sets standards to ensure carbon credits are of high quality is setting up its first physical office in Singapore, in a sign of the pull of the Republic’s emerging carbon services sector.

The Integrity Council for the Voluntary Carbon Market (ICVCM) will help raise the standards of a novel type of credits that can come from retiring young coal-fired power plants in Southeast Asia, a key pathway to reducing the region’s emissions.

These carbon offsets are known as transition credits, which Singapore is pioneering. The emissions prevented from being released as the coal plants are closed early are monetised as credits. The sale of these credits could spur the phaseout of Southeast Asia’s reliance on dirty coal.

The region alone has about 2,000 coal plants that are less than 15 years old on average. As they have a lifespan of 40 to 50 years, it makes little financial sense to shut them down ahead of time.

Transition credits would thus serve as a financial tool to compensate coal plant owners and investors, while funding renewable energy projects.

“We just can’t imagine meeting the climate goals of the Paris Agreement, if all the young coal-fired power plants in the region continue to operate to the end of their (lifespan). And so we have to find financial incentives... And carbon credits are part of that,” said Ms Amy Merrill, chief executive of the integrity council.

She spoke to The Straits Times on the sidelines of the annual Singapore Carbon Market and Investor Forum at the Parkroyal Collection Pickering in Chinatown.