Carbon Trading Grows: Singapore Signs Sixth Carbon Deal with Rwanda

Singapore has added Rwanda to its growing list of international carbon trading partners, following the signing of a new agreement on 6 May 2025. The deal allows Singapore to buy verified carbon credits from Rwanda as part of its commitment under the Paris Agreement, which sets the framework for global emissions reduction through cooperative mechanisms.

The agreement was signed in Singapore by Minister Grace Fu, head of the Ministry for Sustainability and the Environment, and Rwanda’s Minister of Environment, Dr Valentine Uwamariya, who visited the city-state to formalise the pact. It represents Singapore’s sixth carbon trading deal since late 2023, following previous agreements with Ghana, Bhutan, Peru, Chile, and Papua New Guinea.

Each carbon credit represents one tonne of CO₂ either removed from the atmosphere or prevented from being emitted. These credits will support Singapore’s national target to offset approximately 2.5 million tonnes of emissions per year between 2021 and 2030. Both government bodies and companies subject to Singapore’s carbon tax can use these credits to offset up to 5% of their emissions obligations.

Dr Uwamariya emphasised that the agreement is designed to ‘promote credible carbon markets and sustainable development.’ Minister Fu also pointed out that the deal reflects broader collaboration between the two countries, particularly in digital and financial technology.

The cooperation falls under Article 6 of the Paris Agreement, which enables countries to trade carbon reductions and enhance global climate ambition. While Singapore is actively negotiating with over 15 other nations—including Malaysia, the Philippines, and Sri Lanka—it has yet to secure a deal with any Southeast Asian country. Experts suggest this is due to African nations like Rwanda taking early steps to build out their carbon frameworks, often with the help of international partners.

As more countries establish robust carbon credit systems, such agreements are expected to accelerate investments into sustainable projects—especially nature-based solutions—and raise standards for carbon trading worldwide.