SINGAPORE \u2013 A global body that sets standards to ensure carbon credits are of high quality is setting up its first physical office in Singapore, in a sign of the pull of the Republic\u2019s emerging carbon services sector.<\/p>\n
The Integrity Council for the Voluntary Carbon Market (ICVCM) will help raise the standards of a novel type of credits that can come from retiring young coal-fired power plants in South-east Asia, a key pathway to reducing the region\u2019s emissions. <\/p>\n
These carbon offsets are known as transition credits, which Singapore is pioneering. The emissions prevented from being released as the coal plants are closed early are monetised as credits. The sale of these credits could spur the phase-out of South-east Asia\u2019s reliance on dirty coal. <\/p>\n
The region alone has about 2,000 coal plants that are less than 15 years old on average. As they have a lifespan of 40 to 50 years, it makes little financial sense to shut them down ahead of time. <\/p>\n
Transition credits would thus serve as a financial tool to compensate coal plant owners and investors, while funding renewable energy projects. <\/p>\n
\u201cWe just can\u2019t imagine meeting the climate goals of the Paris Agreement, if all the young coal-fired power plants in the region continue to operate to the end of their (lifespan). And so we have to find financial incentives… And carbon credits are part of that,\u201d said Ms Amy Merrill, chief executive of the integrity council. <\/p>\n
She spoke to The Straits Times on the sidelines of the annual Singapore Carbon Market and Investor Forum at the Parkroyal\u00a0Collection Pickering in Chinatown. <\/p>\n
Formed in 2021, the ICVCM has always been a virtual global entity. Its office in Singapore \u2013 in partnership with the Economic Development Board \u2013 will be its first brick-and-mortar base, and will have two employees at the start. <\/p>\n
Speaking at the forum, Singapore\u2019s Ambassador for Climate Action Ravi\u00a0Menon said: \u201cICVCM\u2019s decision to build a presence in Singapore, through its Asia-Pacific Hub, is a vote of confidence in Singapore\u2019s growing position as a trusted carbon services hub.\u201d <\/p>\n
There are currently more than 100 carbon services and trading firms here.\u00a0<\/p>\n
Over the last six months, the ICVCM has been reviewing and comparing existing initiatives seeking to generate transition credits. It has also engaged the Monetary Authority of Singapore (MAS), which has led a programme since 2023 to develop transition credits and build up buyers\u2019 confidence in this new area. <\/p>\n
Under the programme, pilot projects are under way to retire two coal plants in the Philippines. <\/p>\n
By early 2026, ICVCM will publish a report to set out recommendations to guide the creation of these novel credits and ensure that they represent actual emission cuts. <\/p>\n
The report is expected to address issues such as quantifying how much carbon emissions are truly avoided by retiring coal plants early, and ensuring that the unused coal is not burnt elsewhere. The countries\u2019 power lines and grids will also need to be upgraded to be able to transmit electricity from renewables. <\/p>\n
A proper transition credit project and its financing will also have to account for workers who may be at risk of losing their jobs when the coal plants close, added Ms Merrill, highlighting the importance of ensuring that carbon projects do not sideline communities and livelihoods, which would affect the quality of carbon credits. <\/p>\n
In the carbon market, the ICVCM is known for issuing labels, or \u201cstamps of approval\u201d, on carbon credits that meet quality standards and represent actual emission cuts. <\/p>\n
A label reassures credit buyers and investors that the offsets are credible, especially in the unregulated voluntary carbon market. Labelled credits are also often 25 per cent more expensive than other credits in the market, given their better quality and demand. <\/p>\n
The Singapore office will focus on Asean and also look into raising the standards of nature-based carbon projects that conserve peatlands and make agriculture more sustainable, said Ms Merrill. <\/p>\n
There are two types of carbon markets \u2013 the compliance market, which is regulated by governments, and the unregulated voluntary market. Carbon tax-paying firms in Singapore must buy from the compliance market if they want to offset their emissions, for instance. <\/p>\n
Credits from the voluntary market, however, can be questionable as to their\u00a0credibility and quality.\u00a0This\u00a0has led to criticisms about greenwashing.<\/p>\n
To address them, Singapore, Kenya and the UK\u00a0formed a government alliance in June to help raise the standards of the voluntary market. This coalition, also supported by the ICVCM, will soon issue a set of principles to guide businesses\u00a0in their use of carbon credits. <\/p>\n
At a forum dialogue with Ms Merrill, Singapore\u2019s director-general for climate change, Mr\u00a0Benedict\u00a0Chia, noted that the compliance and voluntary markets seem to be converging, which is a positive development. <\/p>\n
\u201cAs part of the Paris Agreement, these lines are getting increasingly blurred. It then means there are more pathways and options. We can think about greater harmonisation of the markets. The standards required for both (markets) should be broadly similar,\u201d he said. <\/p>\n
A converged market provides carbon project developers multiple routes to scale their projects and sell their credits to a larger pool of buyers, added Ms Merrill.<\/p>\n
\u201cYou need scale and depth for the market, so that it is efficient to invest in it, so that the money flows. That also means money flowing into communities… you need to achieve the volume you need to make a difference in the climate debate,\u201d she said. <\/p>\n","protected":false},"excerpt":{"rendered":"SINGAPORE \u2013 A global body that sets standards to ensure carbon credits are of high quality is setting…\n","protected":false},"author":2,"featured_media":79414,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[242,85,46,141],"class_list":["post-79413","post","type-post","status-publish","format-standard","has-post-thumbnail","category-environment","tag-environment","tag-il","tag-israel","tag-science"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/79413","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=79413"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/79413\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/79414"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=79413"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=79413"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=79413"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}