Singapore has announced a major milestone in its national climate strategy with the signing of agreements to acquire more than 2 million tonnes of nature-based carbon credits. The deals, facilitated by the Ministry of Trade and Industry (MTI) and the National Climate Change Secretariat (NCCS), cover four projects based in Peru, Ghana, and Paraguay. These credits are expected to support Singapore’s efforts to meet its Nationally Determined Contribution (NDC) under the Paris Agreement and progress towards its 2050 net zero emissions target.

Why Singapore Is Turning to International Carbon Markets?

While Singapore has already implemented domestic measures such as a carbon tax, solar energy expansion, and carbon capture investments, its geography presents significant constraints. As a small and densely populated island city-state with scarce natural resources, there are limits to how far domestic decarbonization efforts can go. To overcome these limitations, Singapore is leveraging Article 6 of the Paris Agreement, which enables international cooperation through carbon credit trading. The government described this pathway as both viable and effective, especially for countries with limited capacity for local emissions removal.

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Aligning with Global Agreements on Article 6.2

The announcement builds on progress made during the COP29 UN Climate Conference in 2024, where countries reached a consensus on the implementation of Article 6.2 of the Paris Agreement. This provision outlines how countries can authorize, transfer, and track carbon credits between national registries, enabling country-to-country carbon market activity. By participating in this framework, Singapore not only aligns itself with international norms but also helps to set a precedent for high-integrity credit transactions that support real, measurable environmental benefits.

Four Projects Selected Through Global Tender Process

The carbon credits were procured through a competitive Request for Proposals (RFP) process launched by Singapore in September 2024. The RFP sought projects that met rigorous standards for environmental integrity, including requirements around permanence, additionality, and co-benefits for local communities. Following the evaluation, four projects were selected, delivering a combined total of 2.175 million tonnes of emissions reductions between 2026 and 2030. The deals are valued at approximately S$76 million, or around USD 60 million.

Project Details: Forests, Grasslands, and Restoration

Among the selected initiatives are two REDD+ forest protection projects in Peru—Kowen Antami and Together for Forests, which are designed to curb deforestation. In Paraguay, the Boomitra Grassland Restoration Project aims to improve carbon sequestration through regenerative grazing techniques. In Ghana, the Kwahu Landscape Restoration Project will focus on reforestation and revegetation of degraded land. Collectively, these projects are expected to preserve and regenerate vital natural carbon sinks, while delivering biodiversity protection, cleaner water sources, and sustainable livelihoods for local communities.

Broader Role of Carbon Credits in Global Sustainability Finance

The Singapore government emphasized that carbon credits serve a dual function. Not only do they offer a flexible tool for climate mitigation in resource-constrained nations, but they also provide a financial channel to reward developing countries for conservation and land restoration. The funds generated through these credit agreements help preserve ecosystems and protect biodiversity, while offering tangible economic benefits to host communities through sustainable land use.

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Next Steps: A New RFP Set for Later This Year

The MTI and NCCS have confirmed that a second RFP process will be launched before the end of 2025 to identify additional Article 6-compliant projects. With these efforts, Singapore continues to demonstrate a proactive approach to climate finance and international collaboration, reinforcing its role as a regional leader in sustainability strategy and carbon market development.

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