Some ARR credits may now count towards Singapore’s carbon tax.
For now, this may only be VM0047 projects in Ghana. But, the pool of eligible reforestation projects could grow in the coming year.
Background:
Singapore has a carbon tax scheme covering about 70% of its emissions. Companies subject to the tax can satisfy up to 5% of their obligation using international carbon credits that meet specific criteria, including:
1. Location:
Projects have to be in a host country with which SG has a bilateral agreement. Currently 9 countries that have agreements with SG: Bhutan, Chile, Ghana, Papua New Guinea, Peru, Paraguay, Rwanda, Thailand, and Vietnam
2. Vintage:
Between 1 January 2021 and 31 December 2030.
3. Approved registry and methodology:
🔗 to list of approved methodologies by registry and country in comments; note that approved methodologies varies by host country.
Verra’s afforestation/reforestation methodology (VM0047) is not on the list of approved project methodologies that can satisfy the tax.
But, that just changed.
What’s new:
Earlier this month, the government of Singapore signed contracts for over 2 million carbon credits from four nature-based carbon projects to help the country meet its Paris Agreement NDC. The projects include:
- One VM0042 (soil carbon emission reductions and removals) project in Paraguay
- One VM0047 project (afforestation/reforestation methodology), in Ghana, and – 2 VM0048 (REDD+ methodology) projects, in Peru.
While VM0042 was already on the list of approved methodologies for generating credits that count toward the tax, VM0047 and VM0048 were not. This announcement likely means these methodologies will soon be whitelisted for the host countries where the projects are located (see sources 2 and 3 in comments).
Which methodologies count varies by country. For now, I’d only expect VM0047 credits from projects in Ghana (which also meet the Republic’s additional criteria) to count toward the tax. But this announcement opens the door for more VM0047 projects from other host countries counting towards Singapore’s carbon tax in the future. Stay tuned!
— Image from SG’s National Climate Change Secretariat