COP29: Singapore and Zambia ink carbon credit deal

Singapore and Zambia have inked a preliminary carbon credit deal on the sidelines of the annual United Nations climate change conference currently taking place in Baku, Azerbaijan.

The memorandum of understanding (MOU), signed on Tuesday (19 Nov) at the Singapore Pavilion at the COP29 summit, will pave the way for both countries to trade carbon credits aligned with Article 6 of the Paris Agreement.

These credits come with corresponding adjustments, which means that the emissions being offset are counted only once by the country that bought the credits, while 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.

Under the MOU, both countries will work towards a legally binding carbon credit transfer agreement aligned with Article 6.2 of the Paris Agreement, which governs bilateral trading of carbon credits.

It is only when an implementation agreement has been signed that both countries can start trading carbon credits. Singapore has signed implementation agreements with Papua New Guinea and Ghana thus far.

For now, the MOU between Singapore and Zambia will facilitate the exchange of best practices and knowledge on carbon credit mechanisms, said the Ministry of Trade and Industry (MTI) in a statement on the same day.

Both countries will also work together to identify potential carbon mitigation projects that are compliant with Article 6, and develop the necessary infrastructure and capabilities to enable these projects to generate such credits.

This can support both countries in achieving their respective national climate targets, while promoting sustainable development and upholding environmental integrity, said MTI.

Given that rules surrounding the global trading of carbon credits – covered under Article 6.4 of the Paris Agreement – had been adopted only on the first day of the COP29 talks, the city-state has been working with individual countries to come up with bilateral trading agreements over the last few years.

This is the first bilateral carbon credit deal Singapore has inked at COP29. The signing was witnessed by Sustainability and Environment Minister Grace Fu and her Zambian counterpart Mike Mposha.

She said at the signing: “We hope to conclude and sign (the Implementation Agreement) as soon as feasible, to bring concrete climate benefits. I hope that our cooperation will demonstrate how high-quality carbon credits can credibly raise global climate ambition, and bring about tangible benefits such as environmental protection, sustainable development, the creation of good jobs, and enhanced biodiversity.

“These are especially important for countries like Singapore and Zambia, who are vulnerable to the effects of climate change,” she added.

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