[SINGAPORE] The Republic has inked a carbon credit transfer agreement with Thailand, the first with a South-east Asian country.
This agreement sets out a framework for the generation and international transfer of carbon credits to Singapore from carbon mitigation projects in Thailand, said the Ministry of Trade and Industry (MTI) in a media statement on Tuesday (Aug 19).
The city-state had signed such agreements with seven other countries – Paraguay, Papua New Guinea, Ghana, Bhutan, Peru, Chile and Rwanda.
The deal with Thailand comes slightly over a month after a Singapore official said that the city-state is aiming to finalise its first transfer agreement with a South-east Asian (SEA) country by the end of this year.
Singapore has already signed memorandums of understanding (MOUs) with five SEA countries – Vietnam, Cambodia, Laos, the Philippines and most recently Malaysia – to collaborate on carbon credits. These MOUs are typically signed first before they progress to an eventual agreement.
Such international partnerships are aligned with Article 6 of the Paris Agreement, which governs rules on the bilateral and international transfer of carbon credits.
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Under Article 6, Thailand will have to increase its reported emissions by the amount of carbon credits it has transferred to Singapore, to avoid double counting. One carbon credit represents a reduction, avoidance or removal of one tonne of carbon dioxide equivalent.
Project developers can leverage this framework to develop high-quality carbon credit projects that are aligned with the Article 6 rulebook, said MTI.
More information on the process for authorisation of these carbon credits projects and eligible carbon crediting methodologies under the agreement will be published in the future.
MTI also said that this collaboration between Singapore and Thailand will advance both countries’ climate ambitions by directing financing towards unlocking additional mitigation potential in Thailand.
The carbon mitigation projects authorised under this agreement will promote sustainable development and deliver tangible benefits to local communities, such as the creation of jobs, improved waste management, enhanced energy efficiency and reduction of environmental pollution.
The agreement was signed by Singapore’s Minister-in-charge of Energy and Science & Technology Tan See Leng and Thailand’s Minister of Natural Resources and Environment Chalermchai Sri-on on the sidelines of the Singapore Regional Business Forum in Bangkok.
Dr Tan, who is also manpower minister, said that Singapore and Thailand have a longstanding partnership in trade, investment and sustainable development.
“This year marks the 60th anniversary of our diplomatic relations, and it is especially meaningful that climate action is becoming an increasingly important pillar of our collaboration, reflecting our shared commitment to addressing global challenges,” he added.
He also said that he looks forward to this agreement serving as a pathfinder for the region, and demonstrate how South-east Asia can develop and scale high-quality carbon credit projects that will drive meaningful emissions reductions, while unlocking new opportunities in the carbon market for businesses.
Chalermchai said that this cooperation is a clear signal that Asean can drive high-quality, internationally aligned greenhouse-gas mitigation.
“We value Singapore’s partnership in unlocking climate finance and advancing credible carbon credit projects in Thailand – from forestry and clean energy to zero-emission transport – that deliver environmental, economic and social benefits for our people. Thailand is committed to becoming a hub for such projects and is ready to share our approach as a model for the region,” he said.
In his keynote speech during the forum, Dr Tan noted that the Asean region’s green economy could unlock annual revenues of up to US$300 billion.
This may come from tapping on South-east Asia’s rich natural assets to develop carbon markets, modernising domestic and regional electric grids, and accelerating the region’s electric vehicle ecosystem.
Dr Tan highlighted that Asean would also accelerate discussions on a region-wide power grid in an effort to achieve a more sustainable future for the region.
“This green transition is not only a tangible step towards combatting the effects of climate change, but also in creating new jobs and enhancing our collective regional energy security,” Dr Tan said.
“For us to unlock its full potential, all of us have to work together, both at the bilateral and also at the regional levels,” he added.
