MAS launches $15m grant to help financial institutions take part in carbon markets

The Republic’s central bank is setting aside $15 million to equip financial institutions here with the resources they need to get involved in the country’s emerging carbon trading sector.

- Shabana Begum

Financial institutions include banks, financial advisory firms, insurance companies and investors.

In announcing the Financial Sector Carbon Market Development Grant on Oct 28, the Monetary Authority of Singapore (MAS), alongside three government entities, said the grant will help financial institutions cover some costs and build the foundation for their sustained involvement in the carbon market.

The grant will be in place until 2028.

The three entities are the Ministry of Trade and Industry (MTI), the National Climate Change Secretariat (NCCS) and Enterprise Singapore (EnterpriseSG).

The carbon market refers to the global trade in carbon credits. Emitters, including companies and countries, can buy credits from carbon projects around the world to offset their carbon footprint and meet their obligations under domestic laws or international treaties.

Singapore has identified this sector as a key driver of sustainable economic growth for the Republic.

The authorities said in a statement that financial institutions play a key enabling role in the carbon market, from structuring transactions and financing projects to assessing risks and trading credits.

But they may also face high upfront costs in developing needed expertise and managing the complexity and risks of early transactions, they added.