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[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).

It hopes 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.

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 that 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 the 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 the carbon emissions being reduced or removed, thereby helping to grow the 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 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.