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Singapore Publishes Eligibility List For International Carbon Credits Under The Carbon Tax Regime

19 Dec 2023

This Eligibility List outlines the international carbon credits that companies may use to offset up to five per cent of their carbon tax liability.

Singapore, 19 December 2023 – The Ministry of Sustainability and the Environment (MSE) and the National Environment Agency (NEA) have published the Eligibility List under the International Carbon Credit (ICC) Framework, which will be effective from 1 January 2024.

2.             The ICC Framework will allow carbon tax-liable companies to use eligible ICCs to offset up to five per cent of their taxable emissions. It was introduced in November 2022, alongside the progressive increase in carbon tax rate under the Carbon Pricing (Amendment) Act 2022 from the current S$5 per tonne of emissions to S$25 per tonne in 2024 and 2025, and S$45 per tonne in 2026 and beyond.

3.             In October 2023, MSE and NEA set out the Eligibility Criteria under the ICC Framework. The Eligibility Criteria (see Annex A) requires ICCs to meet seven internationally recognised principles to demonstrate high environmental integrity and represent emissions reductions or removals that occur within the timeframe specified under Article 6 of the Paris Agreement.

Eligibility List under the ICC Framework

4.             Following the publication of the Eligibility Criteria, the Government has developed a list of eligible host countries, carbon crediting programmes and methodologies that adhere to the Eligibility Criteria. NEA, as the administrator of Singapore’s carbon tax regime, will review and update the Eligibility List from time to time. In particular, the Eligibility List will be reviewed annually to maintain relevance and uphold high environmental integrity standards, based on the latest science and evidence. This will include the addition or delisting of carbon crediting programmes and methodologies.

5.             The Eligibility List is in Table 1 below. Please see Annex B for an illustration of some carbon credit project types based on eligible methodologies.


Table 1: Eligibility List of ICCs

Host country

Carbon Crediting Programme

Methodologies

Papua New Guinea

Gold Standard for the Global Goals (GS4GG)

All active methodologies published before 31 March 2023 except:

• Those under the “Land Use and Forestry & Agriculture” category of GS4GG;

• Methodology For Animal Waste Management and Biogas Application V1.1;

• Methodology For Collection of Macroalgae to Avoid Emissions from Decomposition V1.0;

• Carbon Sequestration Through Accelerated Carbonation of Concrete Aggregate V1.0;

• Two And Three Wheeled Personal Transportation V1.0.

Verified Carbon Standard (VCS)

All active methodologies published before 31 March 2023 except (i) VM0044 Methodology for Biochar Utilization in Soil and Non-Soil Applications, v1.1; (ii) methodologies under the “Sectoral Scope 14” category of VCS, with these allowable exceptions:

• Scenario 2a and 3 of VCS Jurisdictional and Nested REDD+ (JNR) framework;

• VM0012 Improved Forest Management in Temperate and Boreal Forest, v1.2;

• VM0022 Quantifying N2O Emissions Reductions in Agricultural Crops through Nitrogen Fertilizer Rate Reduction, v1.1;

• VM0026 Methodology for Sustainable Grassland Management, v1.1;

• VMD0040 Leakage from Displacement of Grazing Activities, v.1.0;

• VM0032 Methodology for the Adoption of Sustainable Grasslands through Adjustment of Fire and Grazing, v1.0;

• VM0033 Methodology for Tidal Wetland and Seagrass Restoration, v2.1;

• VM0036 Methodology for Rewetting Drained Temperate Peatlands, v1.0;

• VM0041 Methodology for the Reduction of Enteric Methane Emissions from Ruminants through the Use of Feed Ingredients, v.2.0;

• VM0042 Methodology for Improved Agricultural Land Management, v2.0.

 

Where any VCS methodology is used, the project participant will be required to demonstrate the Sustainable Development contributions or co-benefits of the relevant mitigation activity by submitting to the Joint Committee of the respective Implementation Agreement its verification report under the Climate, Community and Biodiversity Standards (CCB Standards), the Sustainable Development Verified Impact Standard (SD VISta) or another standard recognised by VCS for such purpose.

American Carbon Registry (ACR)

All active methodologies published before 31 March 2023, except methodologies under “Sectoral Scope 3 (Land Use, Land Use Change and Forestry)” category of ACR.

Global Carbon Council (GCC)

All active methodologies published before 31 March 2023, except the following project types or methodologies:

• Nuclear energy;

• HFC-23 abatement;

• Reducing Emissions from Deforestation and Degradation (REDD);

• Afforestation & Reforestation (A&R);

• Carbon Capture & Storage (CCS);

• Activities in the GCC’s “Regional Positive List”;

• GCCM004 Methodology for Water Grid Connected Renewable Energy Based Desalination Plant, v1.0;

• GCCM005 Methodology for Desalinated Water Savings in Buildings, v1.0.


6.             The publication of the Eligibility List follows the signing of an Implementation Agreement with Papua New Guinea on carbon credits cooperation under Article 6 of the Paris Agreement. The carbon crediting programmes and methodologies that are eligible may be different for each host country, as host countries also have their own criteria. The Eligibility List for each host country would be agreed under the respective Implementation Agreement, which sets out the framework and processes for the generation and international transfer of carbon credits aligned with Article 6.

7.             The Eligibility List has been published on Singapore’s Carbon Markets Cooperation website, at www.carbonmarkets-cooperation.gov.sg.

Publication of ICC Guidance Document

8.             NEA has also published a Guidance Document for companies on the administrative processes under the ICC Framework. It covers the Eligibility Criteria of ICCs, steps on sourcing and procuring eligible ICCs, and steps on surrendering the ICCs to NEA. The Guidance Document can be found on the NEA website, at https://www.nea.gov.sg/our-services/climate-change-energy-efficiency/climate-change/carbon-tax.

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