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Business Times
11-07-2025
- Business
- Business Times
Singapore mulls introducing carbon offsetting legislation for airlines
[BANGKOK] Singapore is looking to draft a carbon offsetting legislation for the aviation sector, and is studying whether to introduce penalties for airlines if they fail to comply with its requirements. While still in the works, the new legislation is likely to take reference from an existing one that mandates airlines to report their carbon emissions, said Ng Shao Hua, senior manager of global partnerships at Singapore's National Climate Change Secretariat on Wednesday (Jul 9). That carbon reporting legislation, which came into effect in 2023, has provisions to fine airline operators for failing to make these disclosures. Ng, who was speaking at the Asia Climate Summit organised by the International Emissions Trading Association, said: 'If you were to look at how we have framed our legislation on monitoring, reporting and verification (MRV) – where there are penalties, I think we are most likely to take reference from that.' He added that no timeline has been set for the Bill to be introduced and debated in Parliament. Ng was responding to a question during a panel discussion, on whether the Singapore authorities are looking to penalise airlines for not complying with carbon offsetting requirements in the future legislation. A NEWSLETTER FOR YOU Friday, 12.30 pm ESG Insights An exclusive weekly report on the latest environmental, social and governance issues. Sign Up Sign Up The carbon reporting legislation was developed in line with an international programme to cut emissions from the aviation sector, known as the Carbon Offsetting and Reduction Scheme for International Aviation (Corsia), which has required participating airlines to report their annual emissions since 2019. Besides disclosing their emissions, airlines which have signed up to Corsia are also obligated to purchase carbon offsets if their emissions go above 85 per cent of their 2019 levels. The International Civil Aviation Organization had developed the scheme in 2016 to stabilise the sector's net emissions. Under the scheme's initial phases, airlines have until 2026 to purchase carbon offsets voluntarily. From 2027, however, it would become mandatory to do so. Singapore is looking to start work on this carbon offsetting legislation, given that airlines would soon have to start buying carbon offsets to meet Corsia requirements. This is because – even though carbon offsetting obligations began in 2021 – many airlines have not crossed the 85 per cent threshold in the last few years with the imposition of international travel curbs during the Covid-19 pandemic. They are, however, expected to cross this limit with their 2024 emission levels, said Ng. Countries such as the United Kingdom and Canada, have already introduced penalty frameworks for airlines in their legislations. Ng had said that Singapore had decided to take a step-wise approach on legislations, starting first with MRV, and then moving on to carbon offsets. MRV requirements are low-cost and not difficult for airlines to meet, even voluntarily. However, Ng noted that getting airlines to buy carbon offsets might not be as easily accomplished without legislation in place. 'We do need that demand certainty and that will come from legislation. Because if countries are ready to put their foot forward to say: 'I will legislate this. I will be prepared to fine the airlines if they're not ready to comply, even though it's a voluntary scheme until 2026' – if there's a clear direction from governments, then I think that will be the game changer,' said Ng. 'So I think what is needed is how can we push more countries to come on board,' he added.
Business Times
11-07-2025
- Business
- Business Times
Singapore aims to ink carbon credits transfer agreement with first Asean country by end-2025
[BANGKOK] Singapore is aiming to finalise carbon credit negotiations and ink its first transfer agreement with an Asean country by the end of this year, said Benedict Chia, director-general for climate change at Singapore's National Climate Change Secretariat on Wednesday (Jul 9). 'We hope that within the next few months, within this year, we will have more Asean countries being able to collaborate with Singapore. We are in advanced discussions with a number of them, including Thailand. So hopefully things can progress,' said Chia, who was speaking at a panel during the Asia Climate Summit organised by the International Emissions Trading Association. Singapore has signed memorandums of understanding (MOUs) with five Asean countries – Vietnam, Cambodia, Laos, the Philippines and most recently Malaysia – to collaborate on carbon credits. However, none of these MOUs have resulted in the signing of a carbon credits transfer agreement yet. It is only when these agreements are signed can the city-state buy carbon credits from the host countries and use them to meet its climate targets, according to Article 6 of the Paris Agreement. They set out legally binding frameworks and processes for the generation and international transfer of carbon credits. A NEWSLETTER FOR YOU Friday, 12.30 pm ESG Insights An exclusive weekly report on the latest environmental, social and governance issues. Sign Up Sign Up Thus far, Singapore has only inked carbon credit transfer agreements with seven countries – Papua New Guinea, Ghana, Bhutan, Peru, Chile, Rwanda and Paraguay. Unified system for carbon credit trading While there are no government-to-government agreements yet between Asean countries, industry players in the region are looking to advance regional cooperation on carbon markets, with the establishment of the Asean Common Carbon Framework at the end of last year. The framework aims to create a unified system for carbon credit trading in South-east Asia, and steps have been taken to finalise governance structures, discuss methodologies and formulate an implementation road map. Five carbon market associations from Indonesia, Malaysia, Singapore and Thailand are participating in this initiative. When discussing with potential host countries to collaborate on carbon credits, Chia said that Singapore focuses on three factors: projects that are aligned with the national interest of the host country; the involvement of local partners and businesses; as well as ensuring the local communities benefit.
Singapore Law Watch
11-07-2025
- Business
- Singapore Law Watch
Singapore mulls introducing carbon offsetting legislation for airlines
Singapore mulls introducing carbon offsetting legislation for airlines Source: Business Times Article Date: 11 Jul 2025 Author: Janice Lim No time frame has been set yet for the draft law, but it will take a leaf from an existing legislation that mandates carbon emissions reporting. Singapore is looking to draft a carbon offsetting legislation for the aviation sector, and is studying whether to introduce penalties for airlines if they fail to comply with its requirements. While still in the works, the new legislation is likely to take reference from an existing one that mandates airlines to report their carbon emissions, said Ng Shao Hua, senior manager of global partnerships at Singapore's National Climate Change Secretariat on Wednesday (Jul 9). That carbon reporting legislation, which came into effect in 2023, has provisions to fine airline operators for failing to make these disclosures. Ng, who was speaking at the Asia Climate Summit organised by the International Emissions Trading Association, said: 'If you were to look at how we have framed our legislation on monitoring, reporting and verification (MRV) – where there are penalties, I think we are most likely to take reference from that.' He added that no timeline has been set for the Bill to be introduced and debated in Parliament. Ng was responding to a question during a panel discussion, on whether the Singapore authorities are looking to penalise airlines for not complying with carbon offsetting requirements in the future legislation. The carbon reporting legislation was developed in line with an international programme to cut emissions from the aviation sector, known as the Carbon Offsetting and Reduction Scheme for International Aviation (Corsia), which has required participating airlines to report their annual emissions since 2019. Besides disclosing their emissions, airlines which have signed up to Corsia are also obligated to purchase carbon offsets if their emissions go above 85 per cent of their 2019 levels. The International Civil Aviation Organization had developed the scheme in 2016 to stabilise the sector's net emissions. Under the scheme's initial phases, airlines have until 2026 to purchase carbon offsets voluntarily. From 2027, however, it would become mandatory to do so. Singapore is looking to start work on this carbon offsetting legislation, given that airlines would soon have to start buying carbon offsets to meet Corsia requirements. This is because – even though carbon offsetting obligations began in 2021 – many airlines have not crossed the 85 per cent threshold in the last few years with the imposition of international travel curbs during the Covid-19 pandemic. They are, however, expected to cross this limit with their 2024 emission levels, said Ng. Countries such as the United Kingdom and Canada, have already introduced penalty frameworks for airlines in their legislations. Ng had said that Singapore had decided to take a step-wise approach on legislations, starting first with MRV, and then moving on to carbon offsets. MRV requirements are low-cost and not difficult for airlines to meet, even voluntarily. However, Ng noted that getting airlines to buy carbon offsets might not be as easily accomplished without legislation in place. 'We do need that demand certainty and that will come from legislation. Because if countries are ready to put their foot forward to say: 'I will legislate this. I will be prepared to fine the airlines if they're not ready to comply, even though it's a voluntary scheme until 2026' – if there's a clear direction from governments, then I think that will be the game changer,' said Ng. 'So I think what is needed is how can we push more countries to come on board,' he added. Source: The Business Times © SPH Media Limited. Permission required for reproduction. Print
Business Times
24-06-2025
- Business
- Business Times
Singapore forms government coalition with UK, Kenya to grow carbon markets
[SINGAPORE] Singapore, the United Kingdom and Kenya have formed a government-led coalition aimed at growing carbon markets. One of the first tasks the coalition has set out to accomplish is to issue a set of shared principles on how corporates can voluntarily use carbon credits, so that there is consistency across jurisdictions, said a joint press statement on Tuesday (Jun 24). They hope to finalise these guidelines by the time the next United Nations' annual climate change conference – COP30 – is held in Belem, Brazil, in November this year. This is in response to calls from businesses for greater clarity from governments on the use of carbon credits as part of corporate decarbonisation plans. 'The shared principles will give businesses the confidence and incentives they need to invest in a proven but underused climate financing tool and continue to strengthen and scale carbon markets. The coalition will work closely with businesses, so that policies and incentives better respond to business needs,' read the statement. The coalition – which was formed at the sidelines of the London Climate Action Week – will be co-chaired by Singapore's Ambassador for Climate Action Ravi Menon, Kenya's Special Climate Envoy Ali Mohamed, as well as UK's Special Representative for Climate Rachel Kyte. A NEWSLETTER FOR YOU Friday, 12.30 pm ESG Insights An exclusive weekly report on the latest environmental, social and governance issues. Sign Up Sign Up The coalition has France and Panama as its first members, and is looking to expand its membership over the coming months to include countries that are sources of demand for carbon credits, as well as countries which are sources of supply of credits. Speaking at the coalition's launch in London, Menon said that the team has been reaching out to several countries in the last few weeks and that they expect to have a 'good-sized coalition' by COP30. Peru has also endorsed the coalition's mission by recognising the critical role of carbon markets and corporate use of carbon credits in delivering climate-positive growth globally. The coalition said that the set of shared principles will better reflect the true value of carbon emissions being reduced or removed, thereby helping to grow demand for high-integrity carbon credits, and increase the flow of climate finance to emerging markets and developing economies. 'This will boost investment in climate-positive businesses, sustainable development and projects such as sustainable agriculture, clean energy, as well as nature conservation and restoration,' noted the statement. Menon added that that the shared principles are to ensure consistency but not uniformity, as individual countries may still choose to issue more detailed guidance that suits their national circumstances even as it ensures there is alignment to international standards. On Jun 20, the city-state's National Climate Change Secretariat, the Ministry of Trade and Industry, and Enterprise Singapore jointly issued a draft guidance on how companies can voluntarily use carbon credits as part of a credible decarbonisation plan, and has invited the public to provide feedback. Menon also said that the coalition will collaborate with industry, standard setters, and international organisations to ensure that its work is relevant and credible. The International Chamber of Commerce and the World Business Council for Sustainable Development will be partners to the coalition. The Integrity Council for the Voluntary Carbon Market – an independent governance body that sets standards on the supply of credits – is also working with the team to support alignment between the demand and supply sides of the market.
Straits Times
20-06-2025
- Business
- Straits Times
S'pore publishes guide for firms planning to use carbon credits to cut emissions voluntarily
Firms are urged to prioritise all possible ways to reduce their emissions before turning to carbon credits. ST PHOTO: LIM YAOHUI SINGAPORE - The authorities are urging companies to prioritise all possible ways to reduce their emissions before turning to carbon credits to offset their remaining carbon emissions. This is one of the key recommendations that the Government has sent to Singapore companies that are thinking of using carbon credits voluntarily to decarbonise and meet their respective net-zero targets. The eight-page draft guide – prepared by the National Climate Change Secretariat, the Ministry of Trade and Industry and Enterprise Singapore – was made available online on June 20. Public feedback on the guide is welcomed until July 20. One carbon credit represents one tonne of carbon dioxide that is either removed from the atmosphere, such as through carbon capture, or prevented from being released. There are two main types of carbon credits – nature-based ones like reforestation, and technological ones that include switching from pollutive firewood to cleaner cooking stoves. In the draft, the authorities also emphasised that the credits that companies buy will not be counted into the country's climate targets. This is because companies will be buying credits from the voluntary carbon market (VCM). Carbon credits can be bought and traded in the voluntary market or the compliance market – which is regulated by the authorities. For example, carbon tax-paying firms are subject to compliance because they are allowed to use eligible credits to offset up to 5 per cent of their taxable emissions each year. These credits will be counted under Singapore's emission reductions, and they can only be bought from carbon projects hosted by countries that Singapore has bilateral agreements with. The seven countries include Paraguay, Bhutan and Ghana. Whereas, credits from the voluntary market are not legally required or regulated to be used to offset carbon emissions, and this has led to criticisms about the effectiveness and quality of such credits. In 2023, The Guardian reported that more than 90 per cent of rainforest credits did not represent genuine carbon reductions. The Singapore Government is therefore putting out this guidance document to help raise the standards of the VCM. The authorities have received feedback from the industry on the need for the Government to provide guidance on the voluntary market and how companies can use carbon credits as part of a credible decarbonisation plan. 'The growth of carbon markets has been constrained by a few factors. One of the main challenges in the VCM is the lack of standardisation which has led to confusion around various industry-led standards. This has undermined market confidence, and companies concerned about reputational risks are holding back from the VCM,' said the three government bodies in a joint statement. To address these, the eight-pager defines what a high-quality carbon credit should be, emphasising that there should be no double counting of credits or fraud, where one credit is claimed by more than one firm. Firms should buy credits that have been registered with a reputable registry that keeps count of the trading, and claim each credit only once. The authorities also encouraged companies to transparently disclose their use of credits and make known the amount and type of credits they bought, why they chose to use credits, project location, and which registry they used. Mr Rueban Manokara, global lead of the carbon finance and markets task force at conservation group World Wide Fund for Nature, said of the draft: 'By offering clarity on what that high integrity means, including highlighting that credits are not a substitute for real emissions cuts... it may give companies more confidence to include carbon credits as part of their climate action.' He noted that the guide could go further in recognising how high-integrity credits can help firms raise their climate ambition, invest in nature-based solutions, and deliver greater impact. Associate Professor Daniel Lee, director of the Carbon Markets Academy of Singapore at Nanyang Technological University, said the document underscores the Government's support for the role of the voluntary carbon market in helping firms decarbonise. 'Such clarity is important because there are many conflicting opinions out there on the role of carbon credits, including views that suggest carbon credits are simply greenwashing,' he added. The draft guidance can be found on NCCS' website. Feedback can be submitted via Find out more about climate change and how it could affect you on the ST microsite here.
