ANN/THE STRAIT TIMES – Singapore inked its first agreement with Papua New Guinea allowing companies in the Republic to purchase carbon credits from projects to offset part of the carbon tax liability.
Singapore’s Minister for Sustainability and the Environment Grace Fu, who signed the agreement with Papua New Guinea’s Minister for Environment, Conservation and Climate Change Simo Kilepa. She said the agreement was significant as both countries are from the Alliance of Small Island States, or Aosis.
The agreement, signed at the 2023 United Nations Climate Change Conference (COP28) climate conference, requires project developers to cancel two per cent of the authorised carbon credits to go towards the mitigation of global emissions, and five per cent of the share of proceeds of authorised carbon credits to go towards climate adaptation in Papua New Guinea, said Fu.
“This ensures that we can advance both mitigation and adaptation actions required to deliver the Paris Agreement goals,” she added.
The carbon crediting projects under the agreement will also bring sustainable development benefits to local communities, including the creation of sustainable jobs, improved energy security and reduced pollution.
From 2024, Singapore’s carbon tax will increase from USD5 per tonne currently to USD25 per tonne. If the carbon projects meet Singapore’s seven eligibility criteria – which include real and permanent emissions reductions – companies in the Republic will be able to purchase these credits to offset up to five per cent of their taxable emissions.
