Singapore is making a substantial investment in its environmental future, allocating $76.4 million to acquire more than two million tonnes of nature-based carbon credits. These credits originate from vital projects in Ghana, Paraguay, and Peru, as recently reported by The Straits Times.
The National Climate Change Secretariat (NCCS) and the Ministry of Trade and Industry (MTI) have confirmed that these initiatives are designed to protect existing forests in Peru, restore degraded pastureland in Ghana, and enhance carbon storage within Paraguay’s grasslands. This groundbreaking deal represents Singapore’s first acquisition of carbon credits under formal global climate agreements.
In total, Singapore is set to acquire 2.175 million tonnes of these crucial credits. This amount is equivalent to offsetting nearly 4% of the country’s total greenhouse gas emissions recorded in 2022. Understanding the impact, a single carbon credit symbolizes one tonne of carbon dioxide that has either been prevented from entering the atmosphere (e.g., through halting deforestation) or actively removed from it (through restoration efforts).
Among the key projects are two initiatives in Peru: the Kowen Antami Redd+ Project and the Together for Forests Redd+ Project. These projects are primarily focused on safeguarding biodiversity-rich areas such as Yanachaga Chemillen National Park, San Matias-San Carlos Protection Forest, and other critical regions within Madre de Dios province. Redd+ projects, which stands for ‘Reducing Emissions from Deforestation and Forest Degradation,’ are specifically designed to curb emissions resulting from activities like logging, wildfires, and agricultural expansion.
The carbon credits for this significant deal will be supplied by three distinct entities: GenZero, a company backed by Temasek; Mercuria Asia Resources, a prominent commodities trader; and Boomitra, a US-based developer specializing in carbon projects. Singapore’s procurement portal, GeBiz, indicates that Mercuria will be responsible for delivering the credits stemming from the two Peruvian projects.
The tender process for these nature-based credits concluded in February. Singapore plans to strategically utilize these offsets between 2026 and 2030, aligning with its national climate targets. The nation had previously projected a need for approximately 2.51 million tonnes of high-quality carbon credits annually throughout this decade. For context, by 2030, Singapore anticipates total emissions to reach around 62.51 million tonnes, which it aims to reduce to 60 million tonnes through the application of such credits.
This initiative is facilitated by the Paris Agreement, which allows participating nations to procure carbon credits from other jurisdictions to help meet their domestic climate commitments. Singapore has been proactive in this area, having established carbon trading arrangements with nine countries to date: Ghana, Peru, Paraguay, Papua New Guinea, Bhutan, Chile, Rwanda, Thailand, and most recently, Vietnam.