Singapore inks carbon credit transfer agreement with Vietnam, second deal with Asean country
The city-state has also previously signed MOUs with Cambodia, Laos, the Philippines and Malaysia to collaborate on carbon credits
[SINGAPORE] The Republic has inked a carbon credit transfer agreement with Vietnam on Tuesday (Sep 16), marking the second such agreement with a South-east Asian country after Thailand.
This agreement sets out a framework for the generation and international transfer of carbon credits to Singapore from carbon mitigation projects in Vietnam, said the Ministry of Trade and Industry (MTI).
Besides Vietnam and Thailand, the city-state has signed such agreements with seven other countries – Paraguay, Papua New Guinea, Ghana, Bhutan, Peru, Chile and Rwanda.
Singapore has already signed memorandums of understanding (MOUs) with four South-east Asian countries – Cambodia, Laos, the Philippines and Malaysia – to collaborate on carbon credits. These MOUs are typically signed first before they progress to an eventual agreement.
Such international partnerships are aligned with Article 6 of the Paris Agreement, which governs rules on the bilateral and international transfer of carbon credits.
Under Article 6, Vietnam will have to increase its reported emissions by the amount of carbon credits it has transferred to Singapore, to avoid double counting. One carbon credit represents a reduction or removal of one tonne of carbon dioxide equivalent.
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Project developers can leverage this framework to develop high-quality carbon credit projects that are aligned with the Article 6 rulebook, said MTI.
More information on the process for authorisation of these carbon credit projects and eligible carbon crediting methodologies under the agreement will be published in the future.
Additional details
The Republic will also be channelling 5 per cent of proceeds from authorised carbon credits towards climate adaptation measures in Vietnam.
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Singapore is also committed to having 2 per cent of the correspondingly adjusted carbon credits authorised under this agreement cancelled at first issuance.
The carbon credits that are cancelled cannot be sold, traded or counted towards any country’s emission targets, and serves as a contribution towards a net reduction of global emissions, read the release.
The agreement was signed virtually between Singapore’s Sustainability and Environment Minister Grace Fu, who is also minister-in-charge of Trade Relations, as well as Vietnam’s Acting Minister of Agriculture and Environment Tran Duc Thang.
Fu said the agreement marks an important new area of cooperation between both countries and creates new opportunities in their transition to a low-carbon economy.
“I am confident that this agreement will catalyse the development of climate change mitigation activities that reduce emissions, foster more regional cooperation to address the pressing challenges of climate change, and open up additional pathways towards sustainable development,” she added.
Tran said that the agreement establishes a bilateral legal framework for Vietnamese organisations and enterprises to register greenhouse gas mitigation projects and generate carbon credits, which will be recognised and transferred to Singapore.
“This is a turning point that opens up new climate finance opportunities, encouraging investments in advanced technologies, emission reductions, clean energy transition, and sustainable smart agriculture, moving towards a circular economy,” he added.
“We also hope that Singaporean enterprises will actively cooperate and invest in projects in Vietnam to generate high-quality carbon credits that meet international standards.”
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