Southeast Asia’s carbon markets: Three ways companies can seize opportunities from Singapore

Southeast Asia (SEA) is set to play an important role in global carbon markets, being a rich source of renewable energy and natural carbon sinks across mangroves and peatlands, holding 20-25% of the global Natural Climate Solutions (NCS) supply. From providing financing for impactful climate projects to recognising the value of reforestation and greenhouse gas (GHG) reduction efforts in local ecosystems, carbon markets advance climate goals as part of an overall suite of efforts that include direct decarbonisation and the shift to more sustainable supply chains.

At the North America Climate Summit (NACS) in New York, sponsored by the EDB, panellists Dale Hardcastle, Global Head of Carbon Markets at Bain; Saima Qadir, Carbon Markets Director at Climate Impact X; David Prieto, Senior Director of Climate and Energy Advisory at ClimeCo; and moderator Jingxin Zheng from the EDB discussed the long-term value of Southeast Asia to global carbon markets and how carbon services firms can seize opportunities from Singapore.
 

1. Gain access to high-quality and affordable carbon credits from SEA

There is a need for high-integrity carbon credits originating from meaningful and scalable projects. Given the ecological, urban and agricultural composition of the region, SEA stands to provide a large volume of affordable but quality credits across segments such as plastic, blue carbon, agroforestry, climate-smart agriculture, biochar, waste, energy efficiency, and renewable energy.

Prieto added that SEA’s concentration of biodiversity hotspots as well as its growing manufacturing footprint make it an attractive location for ClimeCo to develop meaningful projects, whether in restoring mangroves, recycling ocean-bound plastics or supporting multinational corporations in decarbonizing their regional value chains.

2. Seize opportunities to develop SEA’s sophistication in carbon management

Notwithstanding the potential, all panellists acknowledged that there is much more to be done to realise opportunities in SEA. While the region had been on a slower trajectory than other regions to advance sustainability goals, it is rapidly catching up as more companies operating there commit to targets under the Science-Based Targets initiative (SBTi). However, there is a need to equip companies in the region with capabilities to undergo the transition to a net-zero future.

Qadir also discussed the need for additional methodologies, in addition to tidal wetland and seagrass restoration (mangroves), for other types of projects to develop carbon credits from rich blue carbon sources in the region. She shared opportunities for carbon services firms to build additional knowledge and market capacity, and set clear parameters on what constitutes quality.

3. Leverage Singapore as a regional node for expertise and innovation

Companies that are looking to tap opportunities to deliver carbon services in the region are finding Singapore to be a trusted location because of its connectivity, vibrant financial services ecosystem, reliable legal system, and progressiveness in advancing global and regional carbon markets. The city-state is already home to over 100 carbon services companies across areas such as project development, measurement, reporting and verification (MRV), standards, and carbon trading.

Hardcastle envisioned that Singapore, as a source of expertise, innovation and capital, could catalyse the growth of regional markets by enabling a whole new generation of developers with localised capabilities. Qadir added that companies based in Singapore can already take full advantage of its vibrant ecosystem, whether it's partnering with the Singapore government on bilateral mechanisms to recognise carbon credits between countries, or with other organisations such as Climate Impact X, which itself is the product of a shared vision between DBS, Standard Chartered, Singapore Exchange and Temasek. Singapore has the potential to become an aggregator of carbon credits in the region as well as linking with carbon markets in other regions to facilitate transactions to enable market growth. She put it best: “Singapore is doing some very cool stuff right now. Partnerships allow us to de-risk at scale and it is the availability of pooled resources and common vision that is allowing us to scale up”.

Join Singapore’s carbon services ecosystem and be part of Southeast Asia’s green growth story. Learn more here.