Singapore inks carbon credit transfer deal with Paraguay
[SINGAPORE] Singapore has inked a carbon credit transfer agreement with Paraguay, the seventh country to sign such an agreement with the Republic, after Papua New Guinea, Ghana, Bhutan, Peru, Chile and Rwanda.
The partnership sets out a framework for the generation and international transfer of carbon credits between Singapore and the South American nation, said the Ministry of Trade and Industry (MTI) in a press release on Friday (May 23).
The agreement is aligned with Article 6 of the Paris Agreement, which governs rules on the bilateral and international transfer of carbon credits. Under Article 6, Paraguay 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 utilise this framework to develop high-quality carbon credit projects that are aligned with Article 6, said MTI.
It added that information on the process for authorisation of these carbon credits projects and eligible carbon crediting methodologies will be published in time.
MTI said that this collaboration will advance both countries' climate ambitions by directing financing that could support climate mitigation efforts in Paraguay.
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The carbon mitigation projects authorised under the agreement will promote sustainable development and deliver tangible benefits to local communities, such as creation of jobs and reduction of environmental pollution, the press release indicated.
Singapore has been accelerating its pace in securing these carbon credits deals over the last two months.
After the first agreement was signed with Papua New Guinea in December 2023 at the United Nations climate change conference in Dubai, the deal with Ghana came about six months later. The one with Bhutan was finalised about nine months after that, in February this year.
The agreements with Peru, Chile, Rwanda and Paraguay all took place in the span of the last two months.
The agreement with Paraguay was signed by Singapore's Minister for Sustainability and the Environment and Minister-in-Charge of Trade Relations, Grace Fu, as well Paraguay's Minister of Environment and Sustainable Development, Rolando de Barros Barreto.
Fu said that both countries are committed to fostering sustainable development and economic cooperation, and this agreement marks a milestone in Singapore and Paraguay's partnership.
'I look forward to seeing companies leverage this agreement to develop tangible projects that drive real emissions reductions,' she added.
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