Carbon Credit Accord Connects Singapore Firms and Mongolian Projects

Highlights

• Singapore finalises 10th carbon credit agreement, now partnering with Mongolia.
• Carbon credits help offset emissions and fund sustainable projects in Mongolia.
• Agreement includes double counting safeguards and cancellation of some credits to reduce global emissions.

Singapore has signed a carbon credit agreement with Mongolia, a country known for its vast temperate grasslands.

This is the 10th such pact Singapore has concluded since late 2023. The agreement helps the Singapore Government and firms liable for the carbon tax to buy eligible carbon credits from Mongolia to offset a portion of their carbon emissions.

The deal was signed on October 6 by Singapore’s Minister for Sustainability and the Environment, Grace Fu, and Mongolia’s Minister of Environment and Climate Change, Batbaatar Bat.

Read More: Carbon Credits Aren’t Enough: Ultima Markets’ Sustainable Vision

Deputy Prime Minister Gan Kim Yong and Mongolia’s First Deputy Prime Minister Uchral Nyam-Osor also signed the agreement. The occasion coincided with the 55th anniversary of diplomatic relations between Singapore and Mongolia.

An implementation agreement sets out a legally binding framework for the international transfer of carbon credits. These credits correspond to one tonne of carbon dioxide removed from the atmosphere or prevented from being released.

In Singapore, firms can use purchased credits to offset up to 5 per cent of their carbon tax obligations. The government intends to use high-quality carbon credits to offset around 2.5 million tonnes of emissions annually from 2021 to 2030.

The pact includes safeguards against double counting, where both countries might claim the same emission reductions. Under the framework, Mongolia adjusts its national inventory to account for credits sold to Singapore. A small portion of credits, 2 per cent, will be cancelled at issuance, meaning they cannot be traded or counted towards emission targets.

Also Read: Singapore to Offset Emissions with Rwanda Carbon Credits Deal

Singapore will channel a share of proceeds, equivalent to 5 per cent of sales, to projects in Mongolia that support climate adaptation. These projects aim to improve access to clean water, create jobs, reduce pollution, and build energy security.

The deal forms part of Singapore’s wider engagement with nine other countries, including Bhutan, Chile, Ghana, and Vietnam, for carbon credit transactions under the Paris Agreement.

Ends/

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Source: The Straits Times