Singapore and Papua New Guinea to Collaborate on Carbon Credits

Singapore and Papua New Guinea (PNG) have signed an Implementation Agreement on carbon credits cooperation under Article 6 of the Paris Agreement.

The agreement was signed on the sidelines of COP28 in Dubai and follows a Memorandum of Understanding (MU) between the countries inked on the sidelines of COP27 last year.

The agreement will advance both countries’ climate ambition and help to channel financing towards additional mitigation efforts through carbon credit projects which would otherwise not be possible.

The carbon credit projects authorised under the Implementation Agreement will also promote sustainable development and generate benefits for local communities, such as the creation of jobs, access to clean water, improved energy security, and reduction of environmental pollution.

As part of Singapore’s Article 6 cooperation, project developers will be required to cancel 2% of the carbon credits authorised under the Implementation Agreement at first issuance to ensure additional contribution to the overall mitigation of global emissions.

They will also be required to make a contribution equivalent to a 5% share of proceeds or authorised carbon credits towards climate adaptation in Papua New Guinea. This will help Papua New Guinea prepare for and adjust to the impacts of climate change.

Trading these credits through Singapore will help to unlock new business opportunities in areas such as carbon services and sustainability solutions, strengthening Singapore’s position as a carbon services and trading hub.

Singapore’s Minister for Sustainability and the Environment Grace Fu said: “High-integrity carbon markets can contribute to much-needed climate action globally. As an alternative energy-disadvantaged country, effective international cooperation, such as through carbon markets, will also help us to achieve our climate ambitions. We are delighted to sign our first Implementation Agreement with Papua New Guinea, a fellow Alliance of Small Island States (AOSIS) member. We look forward to working with Papua New Guinea to advance climate action together.”