Singapore’s National Environment Agency (NEA) has signed separate memorandums of understanding (MOU) with Gold Standard and Verra, two of the world’s largest international carbon offset standard programs, as reported by Strait Times on August 30. The MOUs support businesses in Singapore in using eligible carbon credits certified by Verra and Gold Standard to meet a portion of their compliance obligations under Singapore’s carbon tax regulations. Singapore Deputy Prime Minister Lawrence Wong announced in February that, from 2024, enterprises that must pay a carbon tax in Singapore can purchase high-quality international carbon credits and submit them to the Singapore government to offset up to 5% of taxable emissions.

Singapore imposes carbon taxes on all facilities producing 25,000 tons or more of greenhouse gas emissions a year. The tax price was set at SGD5 (USD3.6) per ton from 2019 to 2023 and will be lifted to SGD25 (USD18) from 2024 to 2025 before eventually reaching SGD50 (USD36) to SGD80 (USD57) by 2030. Considering the growing carbon prices, it could be cheaper for enterprises to offset part of their tax liabilities with international carbon credits. However, this method could also be used as a loophole if companies avoid their carbon taxes by turning to unqualified carbon offset programs that exaggerate their green initiatives. To address these concerns, Gold Standard, Verra, and the NEA will ensure the integrity, credibility, and transparency of the carbon credits.

Sources:

https://www.straitstimes.com/singapore/environment/carbon-credits-used-to-offset-carbon-tax-bill-in-singapore-must-meet-certain-criteria-nea

https://govinsider.asia/climate/singapore-environment-agency-inks-deals-with-two-carbon-offset-programmes/psyfa

https://verra.org/singapore-and-verra-sign-mou-to-support-national-carbon-tax/hefngae