Singapore-based companies will be able to use eligible Gold Standard and Verra carbon credits to meet part of their carbon tax obligations in Singapore and provide a boost for international cooperation in the Paris Agreement era.
Gold Standard and Verra are building momentum for voluntary carbon market credits to be used in compliance markets.
Singapore has followed Sweden in exploring how voluntary credits can work in meeting compliance targets.
As the markets co-mingle, voluntary carbon markets will need to be more transparent, credible and aligned with Article 6 of the Paris Agreement.
The National Environment Agency of Singapore (NEA) and Gold Standard have signed an agreement that enables Singapore-based companies to use eligible Gold Standard credits to fulfil a portion of their compliance obligations under the Singapore carbon tax regime. Verra has also signed an MoU for the use of its credits but details were not disclosed.
The eligibility requirements include the need for corresponding adjustments, and further details on these requirements will be made available by the Singapore Government.
Implementation of Article 6 allowed use of voluntary credits in compliance markets should accelerate market growth
This is a significant partnership of its kind in the Paris Agreement era, with a national government allowing its companies to use credits from independent crediting programmes towards a compliance obligation, which will be accounted for under Article 6 of the Paris Agreement.
Article 6, details of which were finally agreed at COP26 in Glasgow in 2021 allows governments to use market and non-market-based approaches to transfer mitigation outcomes, in turn helping them achieve their Nationally Determined Contributions (NDCs).
Margaret Kim, chief executive of Gold Standard, said: “Following COP 26 we are entering a new era. Agreements like this will make it easier for companies and countries to meet their compliance obligations, enabling them to maximise their positive impact on climate security and broader sustainable development goals.”
Robust registry procedures will be fundamental to success
In the Memorandum of Understanding both parties emphasise the need for robust procedures to manage the transfer of information on the retirement and use of credits between the Gold Standard registry and the national registry of Singapore, to ensure transparency, integrity, and alignment with Article 6 rules.
Making use of Gold Standard principles will allow the delivery of quantified, verified contributions to the Sustainable Development Goals, delivering tangible benefits where projects take place.
The announcement follows a July 2021 partnership that Gold Standard announced with the Government of Sweden, pioneering innovative approaches to enable Sweden to acquire high-quality mitigation outcomes under Article 6, certified by Gold Standard.
Guidance for Singapore-based companies intending to buy Gold Standard credits for compliance, and further information on the operationalisation of the partnership, will be made available by Gold Standard in due course.