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THE Singapore Economic Development Board (EDB) and IETA on Wednesday (Jul 31) launched the Singapore Carbon Market Alliance (SCMA). It is the first platform aimed at helping companies obtain access to high quality Article 6 carbon credits.

SCMA is a by-invitation-only alliance that connects international developers and suppliers of carbon credits with Singapore-based corporates with strong climate commitment and interest in purchasing Article 6 carbon credits.

“Through workshops and networking sessions, SCMA will build members’ knowledge on enabling and accessing high-quality carbon credits,” said EDB and IETA. IETA is formerly known as the International Emissions Trading Association.

SCMA also aims to facilitate exchanges between government and industry on Singapore’s requirements and carbon credit initiatives.

In a speech during the platform’s launch at the Bloomberg Sustainable Business Summit, Senior Minister of State for Trade and Industry Low Yen Ling said the carbon market is an “important mechanism for supporting voluntary climate goals”, but are not easy to navigate, and compliance and voluntary markets are still evolving.

She added that Singapore has more than 120 carbon services and trading firms, and the Republic is “committed to contributing to the growth of the carbon markets by convening constructive actors and trusted expertise”.

These include carbon services and trading firms that specialise in low-carbon advisory, project development, financing, and verification. They can help companies navigate the complex landscape of carbon markets and support the design and delivery of high-quality carbon projects, said Low.

“The SCMA will be a significant convening platform for Singapore’s carbon services and trading ecosystem. It will bring together businesses with strong climate commitment, trusted carbon services firms, and government agencies to share expertise and networks, starting with the Article 6-compliant carbon credits,” she said.

Article 6 carbon credits refer to those aligned with Article 6 of the Paris Agreement, a legally binding international treaty on climate change, which sets out how countries can pursue voluntary cooperation to reach their climate targets.

Under Article 6, countries are able to transfer carbon credits earned from the reduction of greenhouse gas emissions to help one or more countries meet their climate targets.

These credits under SCMA can therefore help companies meet their corporate climate goals and be used towards Singapore’s nationally determined contributions under the Paris Agreement.

EDB managing director Jacqueline Poh said: “High-quality carbon credits can unlock climate financing and offer a complementary pathway for companies and countries, including Singapore, to meet climate goals.”

The launch of SCMA comes amid growing demand for high-quality carbon credits, as Singapore moves towards a low carbon-economy, said EDB and IETA. From 2024, companies in Singapore will be allowed to use international carbon credits to offset up to 5 per cent of their taxable emissions.

SCMA member companies include chemical manufacturer Evonik Methionine SEA, Temasek-owned investment platform GenZero, technology company Google Asia Pacific and environmental organisation The Nature Conservancy.

Commenting on the launch, GenZero chief executive Frederick Teo said: “A robust carbon market, with appropriate guardrails and incentives, coupled with high-quality carbon credits will be key levers in bridging the financing gap and accelerating climate action.”