SINGAPORE – Singapore’s low carbon, state-backed investment firm GenZero will collaborate with Rwanda on projects to generate carbon credits to offset emissions, it said on Thursday.
Countries such as Australia and Britain have ruled out the use of offsets, which have been widely criticised, to meet their net zero targets, but Singapore is relying on them because the city state lacks the space to build large-scale renewable projects.
The deal, signed by GenZero, the Rwanda Green Fund and carbon certification body Gold Standard that pledges to ensure project integrity, falls under Article 6 of the Paris Agreement on climate change.
Organizations
The clause sets out ways for countries to meet climate targets by investing in low-carbon projects in other nations, either through bilateral arrangements or a yet-to-be finalised U.N. trading scheme.
“We will review potential projects with the Rwandan Green Fund and the Rwanda Environment Management Authority over the coming months, to determine their eligibility and suitability to be included in the collaboration,” Frederick Teo, chief executive of GenZero, an arm of the state investment fund Temasek, said.
“Projects can be nature-based solutions such as nature restoration, or technology-based solutions such as improved waste management.”
Ongoing negotiations
Though Article 6 negotiations are ongoing, Singapore has signed memoranda of understanding with Laos and the Philippines as well as legally binding “implementation agreements” with Ghana and Papua New Guinea.
Negotiations have also been completed on pacts with Bhutan, Paraguay and Vietnam, Ravi Menon, Singapore’s Ambassador for Climate Action, told a conference last week.
Singapore firms can offset up to 5% of taxable carbon emissions by buying credits through Article 6 deals.
Article 6 will be a priority during COP29 climate talks in Azerbaijan in November after negotiations on a final text broke down in Dubai last year.
Parties have struggled to reach consensus on how a U.N.-run carbon market should operate and some worry that bilateral agreements could impact national sovereignty.
