More funding, talent development schemes to boost Singapore’s carbon services sector

At the GenZero Climate Summit Insights on 5 May, Manpower Minister and Second Minister for Trade and Industry Tan See Leng announced a slew of efforts to boost this sector, so that carbon trading remains a key tool to help Singapore grow its economy and reduce its greenhouse gas emissions.

For one thing, a recently formed grant by the Economic Development Board (EDB) has received an injection of S$20 million.

The Carbon Project Development Grant supports local companies in their early stages of developing high-quality carbon projects and credits.

The grant – which has an undisclosed total amount – will help recipient companies address critical funding gaps that early-stage carbon projects face, such as in carrying out feasibility studies and securing long-term buyers of their credits.

The S$20 million came from a new fund that seeks to attract financing from family offices and philanthropic foundations towards carbon projects. This new donor-advised fund was launched on 5 May by the EDB and Temasek Trust’s philanthropy advisory arm.
 

There are two main types of carbon credits – nature-based and technological, such as replacing firewood stoves with cleaner cookstoves. Nature-based credits could come from projects such as forest restoration and conservation.

Under the Paris Agreement, countries can buy carbon credits generated in other nations 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 a 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. The Republic has not yet purchased such offsets.

Despite the uncertain global outlook, the ongoing and urgent need to mitigate climate change will continue to drive growth opportunities in sustainability and the green economy, the EDB and Enterprise Singapore told The Straits Times.

The EDB on 5 May also announced the first three recipients of the Carbon Project Development Grant – global climate solutions provider 3Degrees, Singapore-based carbon project developer Climate Bridge International, and global environmental non-profit The Nature Conservancy. It did not reveal the grant amount each company will receive.

Dr Tan said a lack of sufficient financing has been a barrier to scaling up carbon markets.

“Project developers in carbon markets face high upfront costs, from conducting feasibility studies to project design and implementation. Investors remain cautious without clear investment pathways and long-time horizon to see returns... Grants and philanthropic capital can help to de-risk (carbon) projects,” he added at the summit, held at the Sands Expo and Convention Centre.
 

Carbon projects by Climate Bridge International will include nature projects, low-carbon transportation, and methane capture. Methane is a potent greenhouse gas with greater potential to warm the earth compared with carbon dioxide.

The local firm was launched in April through a joint venture with China’s carbon finance company, Climate Bridge.

EDB’s grant will help the new firm hire more local employees and fast-track feasibility studies, a key step before embarking on carbon projects, said Mr Alvin Lim, chief executive of Climate Bridge International.

The firm is led by Mr Lim and board chairman Tan Chin Hwee. They have employed two Singaporean project development specialists, and plan to hire more employees by end-2025.

The company’s carbon projects will be focused on countries that Singapore has existing carbon trading pacts with, as well as those in the early stages of such agreements, said Mr Lim.

Such countries include Ghana, Bhutan, Laos, and Malaysia.

Singapore’s carbon services sector has been envisioned to be a key driver of growth in the sustainability space.

Today, the Republic is home to more than 150 firms across the sector – double the number from 2021, said EDB and Enterprise Singapore in a joint response.

These include local and global players such as low-carbon advisers, project developers, carbon credit traders and exchanges, firms that conduct greenhouse gas emissions monitoring, reporting and verification, and climate-focused international organisations.
 

Based on an earlier study commissioned by Enterprise Singapore and EDB, Singapore’s presence as a carbon services and trading hub could create a projected gross value-add of between US$1.8 billion (S$2.3 billion) and US$5.6 billion, depending on climate change developments globally.

“As Singapore is an early adopter of carbon credit trading (under the United Nations), many companies see a growing economic opportunity that they can capture by establishing a presence here,” they added.

Despite the sector’s potential for growth, carbon markets continue to stall globally, observed Dr Tan. He highlighted three reasons for this: a lack of common policies and standards to define quality carbon credits, financing gaps, and constraints in talent.

To address some of these issues, he said Singapore will continue to invest in local talent development in this sector.

For instance, the National University of Singapore will launch a new professional certificate in carbon services and trading, he added. Nanyang Technological University also has a carbon markets academy, offering a nine-day programme that provides professionals with a foundation in carbon markets.

On 5 May, SkillsFuture Singapore released a national framework, outlining the career opportunities and skills needed in the carbon services sector. The framework also charts out how universities and institutes can design their training programmes in line with the evolving talent needs of this sector.

Climate Bridge International’s Mr Lim said: “A prolonged trade war may lead to de-globalisation and a shift in attitude away from investments in emission-reducing activities.” But he noted that Europe, China, and ASEAN have been stepping up their efforts in the carbon market.

Mr Izzat Hamzah, Asia-Pacific lead for trading and origination of environmental commodities at 3Degrees, said: “When the market is good, sustainability becomes top of mind for corporates. But when supply chains are disrupted, you’d see companies reprioritising towards optimising costs and ensuring operational reliability.”

His work involves advising corporates on their sustainability goals and helping companies procure renewable energy.

“The trade war doesn’t necessarily change a company’s green objectives – especially for firms that have made public commitments. But they become a bit more cost-sensitive,” he observed.
 

Source: The Straits Times © SPH Media Limited. Permission required for reproduction.