Singapore Signs Article 6 Carbon Credit Deal with Mongolia

Singapore has entered a new partnership with Mongolia to generate carbon units under Article 6 of the Paris Agreement, marking the city-state’s tenth agreement of its kind. This latest deal strengthens Singapore’s growing network of carbon trading partners, which already includes Papua New Guinea, Ghana, Bhutan, Chile, Peru, Rwanda, Paraguay, Thailand, and Vietnam.

The largest boreal taiga forest in Mongolia features rolling hills and newly planted saplings. AI generated picture.

Under the agreement, Singapore will allocate the equivalent of 5% of the proceeds from authorised carbon credits to support environmental adaptation projects in Mongolia, according to the Ministry of Trade and Industry (MTI). In addition, 2% of the resulting Internationally Transferrable Mitigation Outcomes (ITMOs) will be cancelled after the first issuance to directly contribute to reducing global emissions.

To avoid double counting, the agreement includes a system of “corresponding adjustments,” requiring Mongolia to reflect transferred emission reductions in its national greenhouse gas inventory. The cancelled ITMOs will not be traded or used toward any country’s targets, but will instead, as MTI noted, ‘serve as a contribution towards a net reduction of global emissions.’ Details on eligible carbon crediting methodologies and project authorisation procedures ‘will be published in due course’, the ministry added.

Mongolia has also been expanding its carbon market ties, having previously signed bilateral carbon trading agreements with Japan and South Korea.

Singapore is pursuing similar cooperation with the Philippines, following a memorandum of understanding signed in August 2024. Recently, the Makati Business Club, the Philippine-Singapore Business Council, and the Singapore Embassy hosted a forum in Manila to discuss the next steps in developing the country’s carbon market.

‘The Forum recognised that sustaining Philippine-Singapore collaboration and translating commitments into concrete projects would require consistent and multi-stakeholder effort, even after the Implementation Agreement is in place’, the MBC said in a statement.

The new deal with Mongolia follows Singapore’s recent purchase of 2.175 million nature-based carbon credits worth $59.45 million from projects in Ghana, Peru, and Paraguay. While Mongolia has finalised its agreement, the Philippines has moved faster in implementing carbon initiatives through its Joint Crediting Mechanism with Japan.