3-pronged approach to reduce Singapore's exposure to carbon trading risks: Tan See Leng

BUSINESSES engaged in trading carbon credits can look forward to more regulative efforts by the government in future, including taxonomy and guidelines on the quality of carbon credits, Second Minister for Trade and Industry Tan See Leng said in Parliament on Tuesday.

The government is also exploring the use of technology to improve the verification of the credits and establish a marketplace to improve transparency in carbon credit transactions.

In view of Singapore's import of the first carbon-neutral liquified natural gas cargo, East Coast GRC MP Cheryl Chan asked how the government would monitor the carbon credits used to offset the greenhouse gas emissions of each cargo.

While voluntary offsetting activities are not regulated by the government, Dr Tan said the ministry is currently working with the industry, international and local experts, as well as environmental groups to develop a taxonomy and guidelines on the quality of carbon credits.

"The guidelines can then be adopted by companies undertaking commercial agreements in carbon offset activities," he added.

To meet the nation's goals for a net zero carbon target, Minister for Sustainability and the Environment Grace Fu said in a separate parliamentary reply that Singapore will explore ways to be more energy efficient and reduce energy use; invest in low-carbon technologies and foster international collaboration in well-functioning carbon markets and regional electricity grids.

As announced earlier under the Singapore Green Plan 2030, Singapore aims to be a leading carbon services and trading hub, as we seek to create new business opportunities and jobs in the green sector for Singaporeans, said Dr Tan.

"Singapore's robust legislative, commodities trading and financial services foundation put the country in a good position to grow an internationally trusted carbon services and trading ecosystem in Asia," he said.