Singapore has released draft guidance to enhance the credibility of voluntary carbon credits, supporting businesses in achieving their ESG and carbon neutral strategy goals. Announced by the National Climate Change Secretariat (NCCS), Ministry of Trade and Industry (MTI), and Enterprise Singapore, the framework seeks to address industry concerns over inconsistent standards and greenwashing risks in voluntary carbon markets (VCM). 

“Carbon markets are a critical enabler for the global transition to net zero,” stated the agencies, highlighting the potential of high-quality carbon credits to fund climate projects, particularly in emerging economies. 

The draft guidance outlines four key principles: 

• Alignment with international frameworks, particularly Article 6 of the Paris Agreement. 

• Prioritization of feasible emissions reductions before utilizing carbon credits. 

• Emphasis on environmental integrity, ensuring credits are additional, verifiable, and free from double-counting. 

• Clarification that corresponding adjustments do not apply to voluntary credits not used for national targets.

Under Singapore’s evolving carbon neutral strategy, companies can offset up to 5% of taxable emissions using Article 6-compliant credits and are required to disclose credit usage in climate reports aligned with International Sustainability Standards Board (ISSB) guidelines. The government has also launched the Carbon Project Development Grant to increase high-quality credit supply. 

The Singapore Sustainable Finance Association (SSFA) is developing a complementary Claims Guidance Code, working alongside ASEAN bodies to harmonize standards and boost market confidence. 

By promoting transparency, including public disclosure of credit volumes, registries, and third-party validations, Singapore aims to solidify its position as a global hub for trusted carbon markets. The draft framework is open for public consultation until July 20, 2025. 

This initiative underscores Singapore’s commitment to integrating robust ESG frameworks and credible carbon neutral strategies into its financial and corporate sectors, driving global sustainability leadership. 

Sources: 

https://esgnews.com/singapore-releases-draft-guidance-to-strengthen-use-of-voluntary-carbon-credits/ 

https://www.esgtoday.com/singapore-releases-guidance-for-use-of-carbon-credits-to-meet-decarbonization-goals/