S'pore Could Buy Its First Set Of Carbon Credits In 2025; MTI To Call For Proposals

Republic Has Inked Three Bilateral Pacts To Pave Way For Purchases

- Shabana Begum

The Republic could be buying its first set of carbon credits to offset its greenhouse gas emissions in 2025, with the Ministry of Trade and Industry (MTI) set to launch a request for proposals to procure eligible credits later in 2025.

Second Minister for Trade and Industry Tan See Leng gave this update in Parliament on March 6, during the debate on his ministry's budget.

Responding to Mr Edward Chia (Holland-Bukit Timah GRC) and Ms Tin Pei Ling (MacPherson), who asked for an update on Singapore's carbon market initiatives, Dr Tan pointed to how Singapore had on Feb 28 finalised a bilateral carbon trading agreement with Bhutan.

This is the third such deal that Singapore has - the other two were inked with Papua New Guinea and Ghana.

Such bilateral pacts - called implementation agreements - will pave the way for Singapore to eventually buy carbon credits from projects in the three countries to meet its climate targets under the Paris Agreement.

The framework that allows countries to cooperate with one another through the international carbon market was agreed upon in 2021. Singapore has yet to purchase any carbon credits to offset its emissions, although it has since then been actively laying the groundwork to enable it to do so.

Being alternative-energy disadvantaged, Singapore has limited options to decarbonise on its own. Buying credits from elsewhere, such as Ghana, Bhutan or Papua New Guinea, will offer Singapore alternative pathways to shrink its carbon footprint.

According to the emissions projections in a climate report that Singapore submitted to the UN in late 2024, the Republic will start to use carbon credits to offset its emissions this decade.