The new platform aims to connect buyers and sellers of high-quality carbon credits, positioning the city-state as a regional carbon trading hub.
Singapore has taken a bold step towards bolstering its position to become Asia’s carbon trading powerhouse with the Singapore Carbon Market Alliance (SCMA) launch.
Unveiled on July 31, 2024, the alliance, spearheaded by the Singapore Economic Development Board (EDB) and IETA, brings together industry giants, innovative startups, and government agencies in a collaborative effort to reshape the region’s approach to carbon credits.
The SCMA emerges at a critical juncture in the global fight against climate change. As businesses worldwide grapple with reducing their carbon footprints, the demand for reliable, high-quality carbon credits has surged. With its strategic location and robust financial infrastructure, Singapore is positioning itself at the forefront of this growing market.
“The Singapore Carbon Market Alliance will be a key platform for connection, knowledge-building and discussion around Article 6 credits,” said Jacqueline Poh, MD of EDB. “High-quality carbon credits can unlock climate financing and offer a complementary pathway for companies and countries, including Singapore, to meet climate goals.”
The alliance’s primary focus is on carbon credits, which are aligned with Article 6 of the Paris Agreement. This agreement allows countries to transfer carbon credits earned from emissions reduction to help meet their climate targets. Focusing on high-integrity credits ensures that carbon offsetting leads to genuine environmental benefits.
SCMA’s launch comes at an opportune time for Singapore-based companies. From 2024, these firms will be allowed to use international carbon credits to offset up to 5% of their taxable emissions, a policy change expected to drive significant demand for quality credits.
The alliance will serve multiple functions, including:
1. Building knowledge on enabling and accessing Article 6 carbon credits
2. Facilitating updates and exchanges on Singapore’s government requirements and initiatives in carbon credits
3. Connecting buyers and sellers of high-integrity credits
Industry leaders have welcomed the initiative. Gerald Ng, VP of Regulatory Affairs and Sustainability at Changi Airport Group, highlighted the SCMA’s value in building networks and knowledge for trusted carbon markets. Similarly, Frederick Teo, CEO of GenZero, emphasised the importance of cross-sharing insights to drive greater financing towards climate solutions.
The SCMA is not just about facilitating transactions; it’s about creating a robust ecosystem. “A robust carbon market, with appropriate guardrails and incentives, coupled with high-quality carbon credits will be key levers in bridging the financing gap and accelerating climate action,” Teo noted.
Global tech giant Google, a launch member of SCMA, commended the EDB for convening a forum that helps build and exchange industry knowledge on high-quality credits. Spencer Low, Head of Regional Sustainability at Google Asia Pacific, stated that this complements Google’s efforts to accelerate the transition to a net-zero future.
The alliance is expected to be crucial in hard-to-abate sectors where low-carbon technologies are still developing. Access to high-quality carbon credits offers these industries a vital pathway to meeting sustainability goals while technology catches up.
IETA President and CEO Dirk Forrister underscored Singapore’s potential in this arena: “Singapore’s position as a major global hub makes it an excellent candidate to drive forward the development of a truly international carbon market.”
The SCMA adds to Singapore’s growing portfolio of sustainability initiatives. The city-state is already home to more than 120 firms across the carbon management value chain, supporting Asian corporations and governments in their transition to a low-carbon future.
As climate change continues to be a pressing global issue, initiatives like the SCMA are crucial in mobilising private sector resources and expertise. By fostering a vibrant and high-integrity carbon market, Singapore is positioning itself as a regional leader in sustainability and contributing significantly to global climate action.
The launch of SCMA marks a new chapter in Singapore’s sustainability journey. It promises to accelerate the transition to a low-carbon economy for the city-state and the entire Asian region.
(Photo by Annie Spratt)
Want to learn more about topics like these? Sustainability Expo Asia offers a platform to delve deeper into sustainable business in the APAC region. Join sustainability professionals at Marina Bay Sands Singapore on 1-2 April 2025.
