Singapore has taken a key step toward improving transparency in its voluntary carbon market (VCM) by issuing a draft framework that provides clearer guidance for businesses on how to responsibly purchase and use carbon credits.
The draft document, created through collaboration between the National Climate Change Secretariat, Ministry of Trade and Industry, and Enterprise Singapore, offers a set of quality criteria to help companies assess carbon credit standards. Input from the Singapore Sustainable Finance Association and market participants was also factored into the draft.
The framework references well-established international benchmarks, including Singapore’s own International Carbon Credit Framework, the Integrity Council for the Voluntary Carbon Market’s (ICVCM) Core Carbon Principles, and the UN’s aviation offset programme CORSIA. However, it does not include the Voluntary Carbon Markets Integrity Initiative (VCMI), a separate standard that has faced limited uptake so far.
‘One of the main challenges in the VCM is the lack of standardisation which has led to confusion around various industry-led standards’, authorities stated. ‘This has undermined market confidence and companies concerned about reputational risks are holding back from the VCM.’ They noted that industry consultations over the past year revealed a clear demand for stronger government guidance.
The draft also raises the possibility of introducing a ‘Claims Guidance Code’ in the future, mirroring efforts already underway in the European Union. Authorities are currently surveying businesses on this issue.
To support better decision-making, the draft highlights tools such as carbon ratings agencies and insurance services as optional resources for credit assessment. However, it stops short of requiring their use, citing high costs and the need for project-level due diligence.
The draft guidance is now open for public consultation, with feedback accepted until 20 July. Once finalised, it is expected to shape Singapore’s approach to credible carbon credit use for years to come.