Singapore inks carbon trading agreement with Peru

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🗞️ 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

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