Chile Inks Carbon Trading Pact With Singapore

It becomes the fifth country that can sell carbon credits to the Republic

- Shabana Begum

Chile has become the fifth country that can sell carbon credits to Singapore, after both nations inked a carbon trading agreement on April 7.

Singapore has similar pacts with Papua New Guinea, Ghana, Bhutan and, most recently, Peru – signed on April 1 – to eventually offset some of its national greenhouse gas emissions.

Under the Paris Agreement, countries can buy carbon credits generated in other nations or regions to meet domestic climate targets. Singapore had earlier estimated that it would use high-quality carbon credits to offset about 2.5 million tonnes of emissions per year from 2021 to 2030.

Credits used to offset national emissions can be purchased only from carbon projects in countries that have bilateral pacts with Singapore, formally known as implementation agreements. Buyers of carbon credits can include countries or companies, but the Republic has not yet purchased such offsets.

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

One carbon credit represents one tonne of carbon dioxide that is either removed from the atmosphere or prevented from being released, such as when a forest is saved from logging.