Speech by SMS Low Yen Ling at the Launch of Singapore Carbon Market Alliance (SCMA)

Ms Jacqueline Poh, EDB, Managing Director,

Dirk Forrister, President and CEO of IETA

Distinguished guests, colleagues,

Ladies and gentlemen,

Introduction

1. A very good afternoon.  I am delighted to be with you in the presence of distinguished sustainability leaders gathered here. I trust you have had a fruitful time at the Bloomberg Sustainable Business Summit.

2. Today, we are united by a shared commitment to accelerate global climate action. We will mark the launch of the Singapore Carbon Market Alliance (SCMA). Jointly established by the Economic Development Board (EDB) and IETA, the Alliance aims to scale up the availability and trade of high-quality carbon credits in alignment with Article 6 of the Paris Agreement.

Carbon Credits as a Transitional Pathway to Net Zero

3. The Alliance is a timely development that will speed up national and global momentum for climate action.

4. Despite our constraints as a small island-nation and lack of alternative energy resources, Singapore has committed to achieve net-zero emissions by 2050. We have taken several steps towards this ambitious goal.

i. In 2019, we introduced a carbon tax for industrial facilities with direct emissions of at least 25 kilotonnes per annum to steer businesses towards greener practices. We were the first country in Southeast Asia to do so.

ii. We are also actively investing in the research and development of promising abatement technologies such as low-carbon hydrogen, as well as carbon capture and storage.

iii. While our priority is domestic decarbonisation, we recognise that such abatement technologies require time to mature, and hard-to-abate sectors may find it challenging to significantly cut emissions in the near to medium term. As part of Singapore’s holistic decarbonisation approach, we allow the use of high-integrity carbon credits to offset a proportion of companies’ carbon tax. From this year, carbon tax-liable companies can offset up to 5 per cent of their taxable emissions with high-quality international carbon credits that meet our published Environmental Integrity criteria.

5. Our commitment to Article 6 of the Paris Agreement underscores Singapore’s support for unlocking additional carbon mitigation potential in other parts of the world. This not only helps Singapore achieve our climate goals, but also advances sustainable development across the globe.

i. Currently, we are pursuing Article 6.2 partnerships with more than 20 countries. Thus far, we have signed Implementation Agreements with two countries, Papua New Guinea and Ghana. Our Minister of State for Trade and Industry, Mr Alvin Tan recently led a business delegation to Ghana to facilitate the development of carbon mitigation projects between our two countries.

ii. We have also signed MOUs with 14 countries, in regions such as in Latin America, Asia and Africa. Under these MOUs, we will work towards Implementation Agreements to identify potential Article 6-compliant mitigation activities. This positions us to cooperate bilaterally on carbon credits aligned with Article 6 of the Paris Agreement.

6. I would also like to highlight that the carbon market is an important mechanism for supporting voluntary climate goals.  While regulatory requirements set a baseline, voluntary credits enable companies to go above and beyond compliance.  When paired with a credible decarbonisation strategy, these voluntary carbon credits allow businesses to demonstrate leadership and commitment and drive sustainability both within and beyond their value chain.

7. Despite their potential, carbon markets are not easy to navigate. As it is early days, both the compliance and voluntary markets are still evolving. The universe of rules, standards and methodologies can be complex and challenging.

i. Recent controversies in carbon markets have heightened concern and scrutiny on the use of credits.

ii. Rather than feeling discouraged, this is the time to channel our collective will to overcome these teething difficulties and advance the carbon markets.

Growing Singapore’s Carbon Services and Trading Ecosystem

8. Singapore is committed to contributing to the growth of the carbon markets by convening constructive actors and trusted expertise. This includes carbon services and trading firms specialising in low-carbon advisory, project development, financing, and verification, which help companies navigate the complex landscape of carbon markets and support the design and delivery of high-quality carbon projects.

i. Today, we are home to more than 120 carbon services and trading firms. Many of these are global leading organisations that play a key role in driving environmental impact and supporting companies in achieving their climate goals. I am glad to see several of you here today, and commend you for your passion and commitment in driving sustainable change.

Catalysing Carbon Markets through SCMA

9. The SCMA will be a significant convening platform for Singapore’s carbon services and trading ecosystem. It will bring together businesses with strong climate commitment, trusted carbon services firms, and Government agencies to share expertise and networks, starting with the Article 6-compliant carbon credits. My colleague Jacqueline will share more about the Alliance.

10. I look forward to the role SCMA will play in building knowledge and strengthening partnerships to support vibrant and high-integrity carbon markets here and beyond.

Conclusion

11. Congratulations to the EDB and IETA on the launch of the Alliance. Let us continue to boldly seize the opportunities to build high-integrity carbon markets together for a low-carbon future for all.  Thank you.