Forest Carbon Projects Not Eligible for Offsets in Singapore

26 Dec, 2023

Forest Carbon Projects Not Eligible for Offsets in Singapore

Singapore's recent decision regarding carbon credits reveals a strategic approach to managing its carbon tax and offsetting mechanisms. Particularly, the exclusion of REDD+ projects from Papua New Guinea unless adopting a broader jurisdictional approach signifies Singapore's commitment to stringent criteria for carbon credit approval.

REDD+ initiatives focus on reducing emissions from deforestation and forest degradation while incorporating additional activities related to conservation, sustainable forest management, and carbon stock preservation. However, concerns regarding the environmental effectiveness of credits issued by Verra through the Voluntary Carbon Standard (VCS) prompted Singaporean authorities to take a cautious stance.

The Ministry of Sustainability and the Environment (MSE) and the National Environment Agency (NEA) jointly released guidelines outlining carbon crediting programs and methodologies. Notably, each host country's selected methodologies may vary based on mutual implementation agreements.

Singapore has engaged in negotiations for carbon credits with several nations, finalizing agreements with Papua New Guinea as part of the inaugural Article 6 arrangement at COP28. Article 6, a pivotal component of the Paris Agreement, aims to prevent the duplication of emission reductions in carbon trading activities.

The eligibility list allows major emitters to offset a portion of their carbon tax liabilities, which are set to increase from the current S$5 (US$4) per tonne to S$25 (US$19) per tonne in the upcoming year and further to S$45 (US$34) per tonne starting in 2026. NEA plans annual reviews of the list, ensuring alignment with the latest scientific evidence and global standards.

Singapore's selection principles emphasize stringent criteria, demanding that credits avoid double counting, represent additional emissions reductions, are verifiable, permanent, and do not cause harm or escalate emissions elsewhere. The exclusion of specific REDD+ methodologies underscores the country's inclination towards a jurisdictional approach, aiming to enhance the credibility and transparency of forest carbon offsetting.

This move aligns with Verra's pivot towards a jurisdictional approach, evident in the introduction of a comprehensive REDD+ methodology consolidating existing methodologies. Singapore's decision could impact ongoing projects under VCS methodologies, with Verra expecting all current projects to transition to the new framework by 2025.

The shift towards this new methodology marks a significant change, leading to the deactivation or updating of existing methodologies under VCS. The country's approach underscores its commitment to ensuring the integrity and effectiveness of international carbon credits while emphasizing transparency, accountability, and environmental impact assessment in carbon offsetting practices.