COP28: Singapore signs Article 6.2 carbon offset partnerships with Rwanda, Fiji

The government of Singapore signed Memoranda of Understanding (MOU) with Rwanda and Fiji on Dec. 2 and 3 at the UN Climate Change Conference in Dubai, expanding its network for acquiring international carbon credits aligned with Article 6 under the Paris Agreement's framework.

The MOUs lay the foundations for companies in Singapore to use carbon credits generated in Fiji and Rwanda to offset their carbon emissions, notably those covered by Singapore's increasingly stringent carbon tax regime.

Next year Singapore is to increase its carbon tax to S$25/mtCO2e ($18.75/mtCO2e) from S$5/mtCO2e ($3.75/mtCO2e). Industries exposed to the tax are allowed to buy high-quality international carbon credits to offset up to 5% of their tax-liable emissions. The premise is that these credits need to be aligned with Article 6 requirements.

Singapore requires all credits used to offset its carbon tax to be correspondingly adjusted, ensuring avoidance of double counting in project host countries and Singapore as the buyer country.

Singapore has signed similar Article 6 MOUs with over a dozen countries, including Bhutan, Cambodia, Colombia, Chile, Kenya, Morocco, Papua New Guinea, and Peru. Meanwhile the Singapore government has concluded substantive negotiations on Article 6 implementation details with Ghana and Vietnam.

Meanwhile Fiji had previously signed an Article 6 partnership agreement with Japan.

Platts, part of S&P Global Commodity Insights, assessed the price of nature-based avoidance carbon credits (current year) at $4/mtCO2e Dec. 1.