S'pore inks carbon trading pact with Peru

Deal with biodiversity-rich Latin American nation is the fourth that S'pore has signed

- Shabana Begum

Singapore on April 1 finalised a carbon trading agreement with Peru, in a move that will pave the way for the Republic to buy carbon credits from the biodiversity-rich nation.

This is the fourth such deal that Singapore has, and the first one inked with a Latin American nation. The country also has similar pacts with Bhutan, Ghana and Papua New Guinea.

Under the Paris Agreement, countries can buy carbon credits generated in other jurisdictions to meet domestic climate targets.

One carbon credit represents one tonne of carbon dioxide that is either removed from the atmosphere, such as through a restoration project, or prevented from being released, such as when a forest is saved from the axe. Buyers of carbon credits can include countries or companies.

Singapore has indicated that it plans to use such credits to meet its climate change targets, although it has not yet purchased any offsets.

Credits used to offset national emissions can be purchased only from carbon projects in countries that Singapore has bilateral pacts with.

At the same time, carbon tax-liable companies here can also buy carbon credits from projects in these partner countries to offset up to 5 per cent of their taxable emissions.

The pact between Singapore and Peru was signed virtually by Minister for Sustainability and the Environment Grace Fu and Peruvian Environment Minister Juan Carlos Castro Vargas.