Oral Reply to Parliamentary Question on Carbon Offsetting Projects by Ms Grace Fu, Minister for Sustainability and the Environment

Oral Reply to Parliamentary Question on Carbon Offsetting Projects by Ms Grace Fu, Minister for Sustainability and the Environment

Mr Saktiandi Supaat: To ask the Minister for Sustainability and the Environment (a) whether the Government is considering or implementing regulatory sandboxes for small-scale carbon offsetting projects to identify and resolve the gaps including those around verification standards and the interface with the mainstream financial system; and (b) whether she can provide an update on the efforts to develop Singapore into a hub for carbon trading.

Answer:

1 Since 2021, the Government has been implementing regulatory sandboxes for carbon credits projects to support the development of regulatory processes and infrastructure that are integral to carbon markets and the broader green finance ecosystem. We conduct such sandboxes in collaboration with like-minded countries and/or private sector partners in accordance with Article 6 of the Paris Agreement on international carbon credits.

2 Singapore is catalysing the development of credible carbon markets. Singapore actively co-facilitated Article 6 negotiations at COP26 and COP27, and participates in platforms such as the Voluntary Carbon Markets Integrity Initiative to drive the harmonisation of rules and standards. We supported the World Bank and the International Emissions Trading Association to anchor the Climate Action Data Trust in Singapore, which connects registries to promote transparency and market confidence.

3 We are actively fostering international partnerships and have signed Memoranda of Understanding with more than 10 countries to facilitate access to high-quality international carbon credits, or ICC. Concurrently, we are working on the establishment of an ICC registry, and consulting various stakeholders on our environmental integrity criteria and whitelist of ICC that carbon tax liable companies may use to offset up to 5% of their carbon tax liability.

4 Taken together, we are building our reputation as a trusted carbon services and trading hub with over 100 ecosystem players now based in Singapore, and are working with industry to enable further growth.