SINGAPORE – While climate action has slowed down globally, Singapore is committed to making progress. Deputy Prime Minister Gan Kim Yong recently updated Parliament on the nation’s efforts to tackle emissions despite local challenges.
Singapore plans to utilize carbon credits, which allow businesses here to finance emissions reductions abroad. By collaborating with Thailand, the country will call for proposals on carbon projects starting March 31. This initiative aims to offset Singapore’s limited options for carbon reduction at home.
Carbon trading lets Singaporean businesses buy credits that represent one tonne of emissions reduced or prevented elsewhere. Such projects may include forest conservation, reforestation, and improved livestock management to lower methane emissions. This partnership with Thailand is one of five agreements Singapore has formed with other international partners like Ghana and Peru, highlighting a broad commitment to climate collaboration.
The push for carbon credits aligns with Singapore’s goal of using high-quality credits to offset around 2.5 million tonnes of emissions annually from 2021 to 2030. This target is part of Singapore’s commitment under the Paris Agreement, despite contributing only 0.1% of the world’s emissions.
Gan remarked that global climate efforts face political challenges, yet Singapore remains realistic about the future. He emphasized that delaying action is only going to make the eventual transition more difficult and costly. Given the limited renewable energy sources available in Singapore, the journey to lower emissions will be more complex.
In light of recent events, such as the U.S. withdrawal from the Paris Agreement and the 2025 UN climate summit failing to reach consensus on phasing out fossil fuels, Gan stated that companies are reconsidering their sustainability targets.
Singapore is enhancing its carbon tax regime to support its climate ambitions. The tax currently stands at $45 per tonne and impacts around 50 facilities, predominantly in the manufacturing and energy sectors. These facilities account for about 70% of Singapore’s total emissions. Some firms receive allowances to maintain competitiveness, especially those that export and face overseas competition.
The conversation about sustainability is not limited to large companies. The government is setting up platforms for small and medium-sized businesses to help them adopt greener practices. The Singapore Business Federation has proposed forming a Carbon Transition Council to help guide these businesses, a proposal currently under review.
As the effects of climate change become more apparent, tackling emissions alone is not enough. Singapore’s upcoming national adaptation plan, set to be released in 2027, will provide a roadmap to protect its infrastructure, public health, and natural resources from climate impacts.
Overall, while the path ahead is challenging, Singapore is determined to play its part on the global stage, adapting its strategies to meet future climate goals.
For more on Singapore’s climate actions, check reports from the Ministry of Sustainability and the Environment here.
