Draft guide for firms eyeing carbon credits voluntarily to offset emissions

The authorities are urging companies to prioritise all possible ways to reduce their emissions before turning to carbon credits to offset their remaining carbon emissions.

- Shabana Begum

This is one of the key recommendations that the Government has sent to Singapore companies that are thinking of using carbon credits voluntarily to decarbonise and meet their respective net-zero targets.

The eight-page draft guide - prepared by the National Climate Change Secretariat, the Ministry of Trade and Industry and Enterprise Singapore - was made available online on June 20. Public feedback on the guide is welcomed until July 20.

One carbon credit represents one tonne of carbon dioxide that is either removed from the atmosphere, such as through carbon capture, or prevented from being released. There are two main types of carbon credits - nature-based ones like reforestation, and technological ones that include switching from pollutive firewood to cleaner cooking stoves.

In the draft, the authorities also emphasised that the credits that companies buy will not be counted into the country's climate targets. This is because companies will be buying credits from the voluntary carbon market (VCM).

Carbon credits can be bought and traded in the voluntary market or the compliance market - which is regulated by the authorities.