Singapore has signed two separate Implementation Agreements on carbon credits collaboration under Article 6 of the Paris Agreement (“Article 6“), respectively with Bhutan on 28 February 2025 and Peru on 1 April 2025. Each Implementation Agreement provides a legally binding bilateral framework for the international transfer of correspondingly adjusted high-integrity carbon credits aligned to Article 6, set out to prevent double counting of emissions reductions or removals across both parties’ greenhouse gas inventories.
Project developers can leverage the framework to develop high-quality carbon credit projects that are aligned with the Article 6 rulebook. More information on the process for authorisation and eligible carbon crediting methodologies under the Implementation Agreements will be made available in due course.
Use of Correspondingly Adjusted Carbon Credits
- Offset up to 5% of a company’s taxable emissions under Singapore’s International Carbon Credit (“ICC“) framework from 1 January 2024, subject to eligibility.
- Comply with binding mandates like Nationally Determined Contributions (NDCs) and other international mitigation purposes, e.g., the requirements under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).
Commitments Expected of Authorised Projects
- Channel the value equivalent to 5% share of proceeds from authorised carbon credits towards climate adaptation measures in Peru and Bhutan, respectively.
- Have 2% of the authorised carbon credits cancelled at first issuance. These cancelled carbon credits cannot be sold, traded, or counted towards any country’s emission targets.
The Implementation Agreement with Peru is Singapore’s first with a Latin American country, and the Implementation Agreement with Bhutan is Singapore’s first with a carbon-negative country. The Implementation Agreements are set to expand the scope of tradable carbon credits for Singapore companies.
Project developers and companies impacted by the ICC framework may reach out to our team on questions regarding this development.
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