There will be a new grant scheme for carbon project developers setting up and financing early-stage carbon projects that generate credits which a country can buy to help it meet its climate targets.

To be eligible for the grant, applicants must be established carbon project developers that have had success in developing high-quality carbon projects, said Singapore’s Economic Development Board (EDB) on Tuesday (12 Nov).

These companies will be expected to anchor a project development team in Singapore to carry out the early-stage phases of the projects.

The credits generated from these projects must also meet the eligibility criteria detailed in Singapore’s carbon offsetting mechanism, the International Carbon Credit Framework.

Under this framework, high emitters can purchase eligible credits to offset up to 5 per cent of their taxable emissions.

The projects must also be in countries that have existing carbon credit collaborations with Singapore, and are aligned with Article 6 of the Paris Agreement. Article 6 governs the bilateral and international trading of carbon credits, and credits under this framework come with corresponding adjustments.

This means that the emissions being offset are counted only once by the country that bought the credits; the country that produced them gives up the right to use the credits to meet its own national climate targets.

This is to avoid the double-counting of underlying emissions reductions or removals when carbon credits are traded.

Those eligible will receive support for activities associated with originating and undertaking feasibility studies for the proposed carbon projects.

This includes performing carbon stock assessments, developing baseline and project scenarios, estimating greenhouse gas reductions, carbon data collection, local stakeholder engagement, and financial analysis, said EDB, which launched the scheme at the COP29 climate summit in Baku, Azerbaijan.

The agency added that it will take in industry feedback and evolving policy developments around carbon credits to refine the initiative down the line.

The grant, which is in its pilot phase, aims to address the lack of financing for projects that can generate Article 6-aligned carbon credits and spur their development and investment, said EDB.

“High-quality carbon credits that are aligned with Article 6 of the Paris Agreement are one of the viable decarbonisation pathways for hard-to-abate sectors in Singapore,” it noted. “However, the global supply of such credits is limited, with early-stage financing gaps being one of the bottlenecks surfaced by project developers and investors.”

It added: “Southeast Asia is a promising and significant source of carbon credits, and has a wealth of potentially investible projects ranging from forestry conservation and restoration to blue carbon removal.”

This new grant is designed to catalyse growth in Singapore’s carbon services and trading ecosystem, as well as develop a supply of high-quality carbon credits to support the city-state’s climate ambitions, said Jacqueline Poh, managing director of EDB.
 

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