Singapore banks building up capabilities in carbon markets despite low demand and greenwashing concerns

SINGAPORE banks are setting up carbon trading desks and building up capabilities in carbon credits, despite the small size of the voluntary market, which has also been plagued by greenwashing scandals.

But banks and market watchers told The Business Times that the carbon market will eventually grow in importance to support the decarbonisation needs of Singapore and the wider South-east Asian region.

Demand for carbon credits to offset companies’ residual emissions is expected to increase, said Benedict Tan, head of global markets trading at OCBC. And the demand would not just be from companies looking to voluntarily offset their emissions, but also driven by compliance requirements set up by governments taking steps to fulfil their national climate targets, he added.