COP30: Singapore, Malawi sign preliminary carbon credits deal

[SINGAPORE] Singapore and Malawi have inked a preliminary carbon credits deal on the sidelines of the annual United Nations Climate Change Conference (COP30) currently taking place in Belem, Brazil.

The memorandum of understanding (MOU), signed on Thursday (Nov 20) at the Singapore Pavilion at COP30, 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 mean that the emissions being offset are counted only once by the country that buys the credits, while the country that produces 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 agreement that sets out how carbon credits can be transferred from Malawi to Singapore in alignment with Article 6.

However, it is only when an implementation agreement has been signed that both countries can start trading carbon credits.

For now, the MOU will facilitate the exchange of best practices and knowledge on carbon credit mechanisms, as well as the identification of mutually beneficial carbon credit projects that will support both countries in achieving their climate targets, said the Ministry of Trade and Industry in a media release on Thursday.

Singapore has signed carbon credit transfer agreements with 10 countries so far. These are: Bhutan, Chile, Ghana, Mongolia, Paraguay, Papua New Guinea, Peru, Rwanda, Thailand and Vietnam.

The MOU was signed by Singapore Sustainability and the Environment Minister Grace Fu and Malawi Natural Resources, Energy and Mining Minister Jean Mathanga.

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Fu said that both countries’ collaboration on Article 6 will unlock opportunities and financing for key mitigation and adaptation measures, benefitting both global climate action and local sustainable development.

“I hope that our cooperation will demonstrate how high-quality carbon credits can credibly raise global climate ambition and bring about tangible benefits for local communities, such as environmental protection, improved access to energy, water and food security, and the creation of good jobs,” she said.

“These are especially important for countries like Singapore and Malawi (which), while geographically far apart, are both vulnerable to the effects of climate change.”