SINGAPORE, May 29, 2024 – In a significant step towards enhancing global climate action, Singapore and Ghana have signed an Implementation Agreement on carbon credits cooperation under Article 6 of the Paris Agreement. The virtual signing ceremony took place on 27 May 2024, with Singapore’s Minister for Sustainability and the Environment and Minister-in-charge of Trade Relations, Grace Fu, and Ghana’s Minister of Environment, Science, Technology and Innovation, Ophelia Hayford, officiating the event.
Following the signing, both countries will proceed with the ratification process and begin operationalizing the Agreement. This legally binding framework establishes the procedures for the generation and international transfer of carbon credits between Singapore and Ghana, in alignment with Article 6 of the Paris Agreement.
This collaboration aims to bolster both nations’ climate ambitions while directing funds towards additional mitigation efforts. Projects authorized under this Implementation Agreement will focus on promoting sustainable development and providing significant benefits to local communities. These benefits include job creation, improved access to clean water, enhanced energy security, and a reduction in environmental pollution.
Key provisions of the Agreement require project developers to contribute 5% of proceeds from authorized carbon credits towards climate adaptation in Ghana. This initiative will help Ghana prepare for and adapt to the impacts of climate change. Additionally, 2% of authorized carbon credits will be canceled at the first issuance to ensure an extra contribution to the overall reduction of global emissions.
Under Singapore’s International Carbon Credit (ICC) framework, eligible ICCs generated through this Agreement can be used by Singapore-based companies to offset up to 5% of their taxable emissions.
Minister Grace Fu emphasized the importance of the partnership, stating, “Singapore and Ghana share many mutual interests in the sustainability sphere. The conclusion of the Implementation Agreement is testament to our shared commitment to advance global climate action through high-integrity carbon markets. The carbon credit projects implemented under this Agreement will generate climate benefits as well as economic benefits. Singapore will continue our efforts to work with like-minded partners like Ghana to co-create opportunities for a sustainable future.”
This Agreement marks Singapore’s second Implementation Agreement, following a similar accord with Papua New Guinea in December 2023.
Implementation Agreement Factsheet
- Legally-Binding Framework: The Agreement establishes a bilateral framework for the international transfer of correspondingly adjusted, high-integrity carbon credits, consistent with Article 6 of the Paris Agreement. It includes procedures for authorizing carbon credit projects and making corresponding adjustments for implemented mitigation outcomes. Detailed processes will be available on carbonmarkets-cooperation.gov.sg in due course.
- Usage of Carbon Credits: Authorized correspondingly adjusted carbon credits may be used for various purposes, including:
- Offsetting up to 5% of a company’s taxable emissions under Singapore’s ICC framework from 1 Jan 2024, subject to eligibility.
- Compliance with binding mandates such as Nationally Determined Contributions (NDCs) and other international mitigation efforts, like the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).
- Additional Mitigation Contribution: Singapore has committed to canceling 2% of the authorized correspondingly adjusted carbon credits at first issuance. These credits cannot be sold, traded, or counted towards any country’s emission targets, contributing instead to a net reduction in global emissions.
- Adaptation Financing: Singapore will channel the value from 5% of the authorized correspondingly adjusted carbon credits towards adaptation measures in Ghana, including heat resilience and coastal protection initiatives.
Singapore is also engaged in substantive negotiations for similar agreements with Bhutan, Paraguay, and Vietnam. Additionally, it has signed MOUs and Letters of Intent on carbon credits collaboration with countries such as Cambodia, Chile, Colombia, Dominican Republic, Fiji, Kenya, Mongolia, Morocco, Peru, Rwanda, Senegal, and Sri Lanka, aiming to establish similar Implementation Agreements in the near future.