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Singapore inks carbon trading agreement with Peru

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By illuminem briefings

· 3 min read


illuminem summarises for you the essential news of the day. Read the full piece on The Straits Times or enjoy below:

🗞️ Driving the news: Singapore has signed a carbon trading agreement with Peru, its fourth such pact and the first with a Latin American nation
This deal enables Singapore to purchase high-integrity carbon credits from Peru to help meet its climate goals under the Paris Agreement
It follows previous agreements with Bhutan, Ghana, and Papua New Guinea

🔭 The context: Under the agreement, carbon credits from Peru will be derived from projects such as forest conservation, watershed protection, and sustainable development
Singapore’s companies liable for carbon tax can offset up to 5% of their taxable emissions using credits from these partner countries
Peru, known for its biodiversity, aims to ensure that projects also benefit local communities and ecosystems

🌍 Why it matters for the planet: The deal supports climate action through market-based solutions while funding conservation in biodiverse regions like the Amazon and Andes
However, experts warn that nature-based carbon credits must be carefully managed to avoid unintended environmental harm or community displacement
Singapore’s voluntary 5% contribution from credit purchases will support Peru’s local climate resilience initiatives

⏭️ What's next: Singapore is reviewing proposals from carbon project developers to supply its first batch of nature-based credits, potentially from Peru
The Republic is also negotiating similar pacts with over 15 countries, including Colombia, Malaysia, and Cambodia, as it seeks to offset 2.51 million tonnes of annual emissions by 2030
Peru’s upcoming 2035 targets may affect the availability of credits for export

💬 One quote: “This agreement will strengthen collaboration between our two countries and support efforts to advance climate action while unlocking new opportunities in the carbon market,” — Grace Fu, Singapore’s Minister for Sustainability and the Environment

📈 One stat: Singapore’s 2030 target includes offsetting 2.51 million tonnes of emissions annually via carbon credits

Click for more news covering the latest on carbon market

 
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