Singapore’s $1 Billion Carbon Credit Push: A New Path to Net Zero?
Singapore is actively developing its carbon market to become a global hub for carbon trading. A key step in this direction was the country’s first-ever carbon credit auction, which attracted over S$1.3 billion (around $1 billion) in bids.
A carbon credit is a certificate representing one tonne of carbon dioxide (CO2) removed from or prevented from entering the atmosphere. Companies and countries can buy these credits to offset their greenhouse gas emissions.
To support this, Singapore introduced a carbon tax in 2019. This tax encourages companies to lower their emissions by making pollution more expensive. The country also aims to be a global hub for carbon trading. It’s attracting investments and partnerships from various regions.
From Carbon Tax to Carbon Trade: Singapore’s Net-Zero Roadmap
Singapore has committed to cutting its greenhouse gas emissions to between 45 and 50 million tonnes by 2035, down from 60 million tonnes in 2030. This goal keeps the country on track for net-zero emissions by 2050.

The government previously estimated that to meet its national climate goal of 60 million tonnes by 2030, it would need to offset about 2.51 million tonnes of carbon dioxide equivalent yearly from 2021 to 2030.
Singapore submitted its 2035 climate target to the UN on February 10, meeting the official deadline. In 2022, the country emitted 58.59 million tonnes of CO2 equivalent, about 0.1% of global emissions. The government acknowledges challenges in cutting emissions due to limited alternative energy options and technological dependence.
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Singapore’s $1 Billion Carbon Credit Auction
In September 2024, Singapore made headlines with its first-ever carbon credit tender. The government aimed to buy at least 500,000 nature-based carbon credits, which would offset the same amount of CO2 emissions.
Nature-based credits come from projects that restore forests, protect ecosystems, or promote sustainable agriculture.
The tender attracted significant interest, with 17 submissions totaling over S$1.3 billion, about US$1 billion. The highest bid came from Trafigura, a global commodities trading company, at nearly S$300 million.
Other major bidders included Mercuria Asia Resources, DNZ ClimateTech (S$200,000), Temasek-backed GenZero (S$27.5 million), Shell (S$34 million), and PetroChina (S$21.8 million).
These bids show the growing demand for carbon credits as a tool to fight climate change. Globally, demand for these credits could grow 100x by 2050, per McKinsey & Company estimates. Companies and governments view carbon trading as a method to offset emissions. It also helps fund environmental projects.

Carbon Credits: The Green Currency of the Future?
Carbon credits help reduce emissions and support sustainability projects. Some key types of carbon credit projects include:
- Reforestation: Planting trees to absorb CO2 from the atmosphere.
- Forest Conservation: Protecting forests to prevent stored CO2 from being released.
- Sustainable Agriculture: Using farming methods that reduce emissions and improve soil health.
These projects aim to help the environment and may contribute to job creation, improved air quality, and biodiversity.
$5.6 Billion and Counting: Building a Carbon Trading Hub
Singapore is working to become a leading center for carbon trading. By developing strong partnerships and ensuring high standards, the country is attracting investments and driving innovation in sustainability.
The Economic Development Board estimates that this initiative could generate S$5.6 billion in economic value. This shows that carbon trading can serve as an environmental strategy and as a major economic opportunity.
To strengthen its carbon market, Singapore is partnering with other countries. Under Article 6 of the Paris Agreement, nations can trade carbon credits as long as they follow strict rules. These include:
- No Double Counting: Emission reductions must be counted by only one country.
- Environmental Integrity: Credits must represent real and measurable emission reductions.
- Sustainable Development: Projects must benefit local communities and ecosystems.
Singapore has signed agreements with Bhutan, Ghana, Papua New Guinea, and Peru to buy carbon credits. These deals help ensure that carbon trading meets high standards and delivers real environmental benefits.

These agreements aim to help carbon trading and create trustworthy carbon markets. These partnerships are key. They help ensure carbon credits are used well to reach global climate goals.
Singapore’s First Carbon Trade Deal with Peru
On April 1, 2025, Singapore signed a carbon trading agreement with Peru. This was its first such deal with a Latin American country. Peru’s vast Amazon forests play a key role in stabilizing the global climate, making it a valuable partner in carbon trading.
Under the agreement, Singapore can buy carbon credits from projects focused on rainforest restoration and conservation. These projects will cut emissions. They will also help local communities by creating jobs and improving access to clean water.
As part of the deal, Singapore will contribute 5% of the proceeds from purchased credits to help Peru fund climate adaptation measures. This reflects the Asian country’s commitment to sustainable development beyond its own borders.
What’s Next? Singapore’s Carbon Trading Future
Singapore’s carbon credit efforts are still in the early stages but show great potential. The government plans to launch another tender later this year to purchase more nature-based credits. It is also negotiating with over 15 other countries to establish new agreements.
These initiatives highlight Singapore’s commitment to achieving net-zero emissions by 2050. By leveraging international partnerships and carbon trading, the country is paving the way for a more sustainable future.
Carbon credits are an important part of global climate action. Singapore shows how these tools cut emissions and boost global sustainable development.
Through agreements with countries like Peru and its first carbon credit tender, Singapore is setting an example for responsible carbon trading. Challenges remain, like securing supply and protecting the environment, but the country’s proactive approach brings hope for real climate action.
As the world works toward net-zero emissions, Singapore’s experience provides valuable lessons on balancing environmental responsibility with economic growth.
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