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Introduction
1 The National Climate Change Secretariat (NCCS), the Ministry of Trade and Industry (MTI), and Enterprise Singapore (EnterpriseSG) jointly issued a draft guidance today on how companies can voluntarily use carbon credits as part of a credible decarbonisation plan. The public is invited to provide feedback on the draft guidance, and the public consultation period will be from 20 June 2025 to 20 July 2025. The draft guidance can be found in Annex A.
Background
2 A carbon credit is a certificate representing the reduction or removal of greenhouse gas emissions. Carbon markets, which facilitate the buying and selling of carbon credits, are a critical enabler for the global transition to net zero.They help to (i) channel capital to decarbonisation projects that would have otherwise not occurred, especially in emerging markets and developing economies; and (ii) provide companies a complementary tool to meet their decarbonisation targets in the face of hard-to-abate emissions. Entities may purchase carbon credits for compliance1 or voluntary purposes. Carbon credits used by companies to meet their voluntary climate commitments are traded on the voluntary carbon market (VCM).
3 However, the growth of carbon markets has been constrained by a few factors.One of the main challenges in the VCM is the lack of standardisation which has led to confusion around various industry-led standards. This has undermined market confidence and companies concerned about reputational risks are holding back from the VCM. From industry engagements over the past year, we have received feedback on the need for the government to provide guidance on the VCM, including how companies can use carbon credits as part of a credible decarbonisation plan and how to determine a high-quality carbon credit.
4 In response to this industry feedback, NCCS, MTI and EnterpriseSG have worked with the Singapore Sustainable Finance Association (SSFA) and industry partners across the carbon credit value chain to draft guidance for companies looking to purchase carbon credits.The guidance:
5 The draft guidance is part of the Singapore government’s broader strategy to promote a vibrant, high-integrity carbon market. Key initiatives include:
6 The industry has also been taking been taking steps to grow the carbon markets. For example, SSFA is surveying companies for a potential Claims Guidance Code to complement the Singapore Government’s VCM guidance, and is cooperating with regional carbon market associations under the ASEAN Common Carbon Framework to support high-quality credit supply and demand signals.
Invitation to Provide Feedback
7 NCCS, MTI and EnterpriseSG invite businesses and members of the public to provide feedback on the scope and content of the draft VCM guidance by 20 July 2025. Feedback can be submitted via https://www.go.gov.sg/vcmguidance.
8 Please note that all submissions received may be published and attributed to the respective respondents unless they expressly request the agencies (NCCS, MTI and EnterpriseSG) not to do so. As such, if respondents would like: (i) their whole submission, or part of it; or (ii) their identity; or both, to be kept confidential, please state so in the submission. In addition, the agencies (NCCS, MTI, and EnterpriseSG) reserve the right not to publish any submissions received where they consider it not in the public’s interest to do so, such as if the submission appears to be libellous or offensive.
1 Examples of compliance purposes include meeting regulatory requirements and national commitments under the United Nations Framework Convention on Climate Change.
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Annex A - Draft Voluntary Carbon Market Guidance |