Singapore Seeks to Become Global Hub for Carbon Trading

To scale up carbon trading in the city, Singapore plans to work with Climate Impact X, a collaboration between the Singapore Exchange, DBS, Standard Chartered and Temasek.

Singapore is reportedly planning to scale up efforts to develop an international carbon trading marketplace and a services ecosystem to support decarbonisation.

According to Minister for Manpower Dr Tan See Leng, who is also Second Minister for Trade and Industry, Singapore is looking to increase trading of voluntary carbon credits in the city-state.

Speaking at the Asia-Pacific Petroleum Conference on Monday, Dr Tan said the government plans to work with players such as Climate Impact X (CIX) to scale up carbon trading.

CIX is a collaboration between the Singapore Exchange (SGX), DBS, Standard Chartered and Temasek which seeks to connect an ecosystem of partners to enhance the transparency, integrity and quality of carbon credits, leveraging satellite monitoring, machine-learning and blockchain to do so.

In May, CIX announced plans to develop a digital global exchange and marketplace for carbon credits, catering primarily to large-scale buyers, including multinational corporations and institutional investors.

The initiative is expected to increase transparency over the risks and effectiveness of carbon projects, as well as improve price transparency, which will help to address challenges suppliers face in developing new carbon reduction projects, including liquidity issues.

“As a leading commodity trading and financial hub, Singapore is well placed to further our efforts in decarbonisation and sustainability,” Dr Tan said, noting that many global players in carbon services have established offices in the city-state, help to catalyse the development of a larger ecosystem.

“We are building up capabilities along the value chain by actively anchoring key activities such as project development, financing and certification here in Singapore,” Dr Tan said.

Singapore is also working with international partners such as the World Bank and the International Emissions Trading Association to advance the Climate Warehouse initiative, a global market infrastructure that seeks to enhance the transparency and environmental integrity of carbon credit transactions.

According to Dr Tan, the government is exploring the possibility of anchoring the Climate Warehouse in Singapore. Interested players would be encouraged to join the ecosystem, receiving assistance in areas such as digitalisation and innovation.

In December, the Monetary Authority of Singapore’s (MAS) Managing Director Ravi Menon indicated that work was underway to start laying the foundations for the development of a market ecosystem in Singapore for voluntary carbon credits.

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